The International Partners Group (IPG), a grouping of rich nations that last year pledged US$8,5 billion to help South Africa finance its energy transition, has approved the country’s Just Energy Transition (JET) Investment Plan at COP27, currently taking place in Egypt.
Chaired by the UK, IPG comprises France, Germany, the UK, the US and the EU. The Partnership aims to help accelerate the decarbonisation of South Africa’s economy, to help it achieve the ambitious goals set out in the country’s updated Nationally Determined Contribution emissions goals.
South Africa’s Just Energy Transition (JET) Investment Plan was presented by President Cyril Ramaphosa at COP27 on the 7th of November during a gathering of the World Leaders Summit. The Plan covers three priority sectors – the energy sector as well as, electric vehicles and green hydrogen – for finance.
Under the plan, US$98 billion in investment will be required over five years to begin South Africa’s 20 year energy transition pathway. The investment will be required from both public and private sectors.
“We welcome the comprehensive JET Investment Plan, and fully support South Africa’s economy-wide energy transformation,” said U.S president, Joe Biden.
U.K’s newly appointed Prime Minister, Rishi Sunak added;”South Africa’s JET Investment Plan paves the way for a sustainable and fair transition away from coal and towards cleaner forms of energy, building the foundations for a strong green economy.”
The IPG has indicated that it will work with the South African government to facilitate more investment beyond the initial US$8,5 billion committed at COP26 last year.
The IPG’s initial $8.5 billion funding package includes:
- $2.6 billion through the Climate Investment Funds Accelerating Coal Transition Investment Plan
- $1 billion from France
- $1 billion from Germany
- $1.8 billion from the UK
- $1 billion from the US
- $1 billion from the EU
Some of this funding is already programmed while other parts of it have still to be finalised and programmed in line with the final Investment Plan. Work to programme the full $8.5 billion will continue in coming months.
In addition to the $8.5 billion, the World Bank Board has recently approved the Eskom Just Energy Transition project which is providing $0.5 billion of financing in support of South Africa’s Just Energy Transition.