The trade union movement is taking the pro-offered Just Transition Partnerships (JTPs) drive with a pinch of salt as it is likely to come at a cost of jobs and is disguised as a new form of “green structural adjustment” and is a “privatise to decarbonise” agenda.
Leaders from 17 trade union bodies, including eight national workers’ centres, along with two Global Union Federations, and four allied research centres altogether representing 15 countries hosted by the Trade Unions for Energy Democracy (TUED) were gathered in Johannesburg yesterday to chart a "public pathway" for the Just Energy Transition, criticising current offerings as they were “structural adjustment programmes” of a new type contingent upon various forms of privatisation.
The three-day meeting seeks to lay the foundations of a long term political agenda and strategy led by sub-Saharan Africa (SSA) trade unions dedicated to developing pro-public policy alternatives to the green structural adjustment proposals, such as the JETPs “being pushed by global neo-liberal actors including lending institutions such as International Monetary Fund (IMF) and the World Bank”.
Cosatu general secretary Solly Phetoe said: "The trade union movement is seized with the task of preventing an unjust transition to a low-carbon economy. An unjust transition represents a lost opportunity to democratise ownership within the energy sector.
“At present, the transition to renewable energy is being led by the private sector through the Renewable Energy Independent Power Producer Programme (REIPPP) While the REIPPP has included local content requirements, conditions for local development, and even local ownership, private renewable energy companies often eschew these conditions,“ Phetoe said.
He said although renewable energy had been touted as Africa’s best bet, the continent’s energy transition had faced many hurdles, including the capital-intensive nature of projects such as solar plants and natural gas, according to the International Energy Agency.
Local unions are not alone in their energy security concerns.
Unions in different JETP countries expressed concern regarding the lack of transparency and “behind closed doors” nature of the JETP negotiations.
They said JETPs were based on “blended finance”, which had a record of failure as it would not “unlock” investment from the private sector, but instead add to the debt burden of the recipient countries, further undermining public energy systems and contributed to a loss of energy sovereignty.
JETP countries receiving concessional loans would incur debt through the financing from abroad, but the private sector would not respond, unions said. And because the financing was tied to privatisation, it would weaken public utilities, making the energy transition even more difficult to achieve while at the same time increasing energy poverty, the movement said.
This is as news broke out on Tuesday that the local content requirement for Independent Power Producer (IPP) had been revoked by the IPP following a court order, which has forced the office to move back to a point system in the selection criteria, which puts local content in a 10% hurdle along with black ownership.
And according to the briefing yesterday, South Africa provided a graphic illustration of the problem.
Announced in October 2022, the South African government’s Just Energy Transition Investment Plan (JET IP) notes that the initial $8.5 billion (R162bn) in concessional JET IP financing “will be deployed as catalytic investments … the JET IP’s priority focus for investment in state-owned infrastructure is to upgrade the transmission grid and the distribution networks to enable them to take up the renewable energy that will be generated largely by the private sector in the coming five years. It is hoped that this “will leverage large-scale private investment in renewable energy, supporting both energy security and decarbonisation”.
However, labour said in other words, this would mean that South Africa would borrow money and incur more debt in order to upgrade infrastructure so that private IPPs and investors in the renewables sector could make money.
This was “green structural adjustment” reminiscent of the structural adjustment programmes (SAPs) the World Bank and the IMF imposed on the South in the 1980s and 1990s. In their original form, the SAPs used financing as a weapon to force through “market reforms” in the power sector, they said
A third problem, to be addressed in a future TUED briefing paper, the labour movement said, was that the JETPs did not significantly alter the global energy mix and was “barking up the wrong tree”.
Instead, labour proposed that real emissions reductions must be led by the rich countries who continue to produce and consume high volumes of fossil-based energy.This as the JETPs offered “concessional” loans (loans at below market-level interest rates) to “assist the transition” in return for commitments to support the private sector and further undermine public energy systems.
“The JETPs constitute the latest push to privatise and marketise public energy systems, create more room for North-based private sector multinationals (independent power producers) and, in ways that “de-risk” private investment by way of legally binding agreements that guarantee revenues and profits over a 20 to 25-year period.
“They mark the continuation of a policy that has been promoted for the past three decades, which is to increase private sector involvement while further undermining public energy utilities,” the movement said.
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