G20 partners rally to support South Africa's Just Energy Transition amid US withdrawal

Banele Ginindza

South Africa is seeing a "doubling down" of G20 partners, European countries, the Far East, and the Middle East who are eager to help fill the gap in funding of the Just Energy Transition (JET) left following the withdrawal of the partnership by the US recently.

America had pledged a total of $1.5 billion (R27bn) in grants and additional commitments from private American businesses, but that has recently been cancelled.

Speaking at a webinar, "Understanding green finance mechanisms and options for South Africa’s decarbonisation and just energy transition," Deputy Minister of Energy and Electricity Samantha Graham-Maré said that though the US is now trying to censure South Africa from the transitioning process, the country would, in all likelihood, have to follow in Brazil's steps and have consensus on the ministerial statement, which means that it will be reduced to some form of a communiqué that is issued at the end of the year.

Graham-Maré said, "We have received some incredible support from the rest of the G20 countries. There has been a doubling down and we have seen that with European countries, in particular. We are getting interest from the Far East and, even the Middle East, are intent on supporting us." Graham-Maré said South Africa was also getting support from other African countries.

She said South Africa was proceeding as though it had consensus, saying, "A week is a very long time in politics, a year even longer. You will never know what happens during the course of the year. We are optimistic the communique is a great outcome, but we have a number of objectives to try and achieve it," Graham-Maré said.

She said the US's technocrats had thus far participated in the G20 just energy transition work group hosted by South Africa, but it remained to be seen whether the political heads would be part of the Ministerial Statement, which was the statement of intent on which all countries sign off.

Senior Advisor and Africa Representative for the Climate Policy Initiative, Jonathan First, said the US withdrawing from the Renewable Power Group (RPG) was going to be significant, but that the bigger issue around funding was that there is not enough grant money in the stack.

"It's more the utilisation of the facility, the US figure of $1.5 billion, a lot of it was coming from Development Cooperation Strategy (DCS). There is a question mark on the DCS, it has not been curtailed the same way as USAID. The DCS will now be used to promote national interests, not necessarily reduce it, but re-oriented," he said.

He said other RPG members were concerned. The UK just announced that they will reduce the development aid budget.

"There is going to be pressure there, it will have an effect, but I dont think it is the big issue at the moment," First said.

Khwezikazi Windvoel, the finance manager for Climate Finance and Innovation at the Presidential Climate Commission (PCC), confirmed that there has been growing interest from various parties in providing support to South Africa.

"We recognise that every contribution helps, but a massive amount of investment is still required. It's hard to determine the exact impact of these contributions," he said. After South Africa received the initial JET package, the Windvoel, said the PCCt had noticed more RPG members stepping forward following the technical review of the JET Implementation Plan. The PCC pointed out that the grant funding portion of the finances was insufficient and there was a need to increase both the amount and quality of financial support to South Africa.

 Windvoel, said as a result, the PCC has seen more partners stepping up to address this funding shortfall.

"Beyond the original partners, additional donors, philanthropies, and grant providers have also joined the effort to bridge the gap. They are all dedicated to supporting this cause," he said.
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