Announced during COP27, the International Partners Group (IPG) – comprising the U.K., U.S. Germany, France and the European Union – has pledged to deliver an additional $562 million to South Africa’s Just Energy Transition Partnership (JETP) plan – following an initial $8.5 billion pledge made during COP26.
Both financial commitments are geared toward decarbonizing South Africa’s energy matrix and helping transition away from coal-fired power generation, on which the country is nearly 90% dependent. To meet its nationally determined contribution as set forth by the Paris Agreement, South Africa must reduce its emissions to below 360 million tons of carbon dioxide by 2030.
The landmark $8.5 billion deal attracted significant attention from global stakeholders in 2021, serving as the first initiative of its kind and a model for other developing countries looking to transition away from coal. A key component of South Africa’s JETP is ensuring a “just” transition and to preserve jobs and livelihoods. As a result, the energy transition deal is in part used to fund alternative employment in coal mining areas, accelerate deployment of renewable energy and stimulate green economy jobs.
That said, an estimated $11 billion in climate finance is needed for the country to fully transition to renewables and keep state-owned public utility Eskom financially solvent. South Africa President H.E. Cyril Ramaphosa has affirmed the need for more climate funding.