Question NW267 to the President of the Republic
06 March 2024 - NW267
Singh, Mr N to ask the President of the Republic
Whether any progress has been made by the Presidential Climate Commission and his Office in (a) finalising the Just Energy Transition Partnership and (b) accessing the R163 billion funding from the partnering nations; if not, why not; if so, what are the relevant details; (2) whether, given the importance of a fair and just energy transition, his Office has taken any steps to address concerns raised by (a) the National Union of Mineworkers and (b) other stakeholders regarding (i) job losses and (ii) the impact of the transition on affected communities; if not, why not; if so, what are the full, relevant details? NW304E
Reply:
The Just Energy Transition Projects Management Unit (JET PMU) in the Presidency manages the JET Implementation Plan, which was approved by Cabinet in November 2023.
The Just Energy Transition Partnership between South Africa and the International Partners Group (IPG) was concluded with the signing of the Political Declaration at COP26 held in Glasgow in 2021. The original members of the IPG are the European Union, France, Germany, United Kingdom and United States. In 2023, Denmark and Netherlands joined the IPG.
Total international pledges to South Africa’s JET investment requirement of R1.5 trillion currently stand at US$11.6 billion (approximately R232 billion), made up as follows:
- US$ 756 million (approximately R15 billion) is in the form of grants, about half of which has been deployed to projects as listed on the Presidency’s State of the Nation Address website (https://www.stateofthenation.gov.za/priorities/growing-the-economy-and-jobs/just-transition-to-a-low-carbon-economy) and the remainder is in planning stages.
- US$ 450 million (approximately R9 billion) is in the form of highly concessional climate loans which are currently being programmed for investment in the repowering, repurposing and decommissioning of retiring coal power stations when they reach the end of economic and operational life.
- US$ 5,7 billion (approximately R114 billion) of the total pledges is in the form of concessional loans to the State.
Concessional loans under the JET Partnership which have been negotiated and accessed by the National Treasury to date are as follows:
- EUR 300 million (approximately R6.2 billion) concessional loan from KFW Development Bank in Germany, concluded in November 2022.
- EUR 300 million (approximately R6.2 billion) from AFD Development Bank in France, concluded in December 2022.
- EUR 500 million (approximately R10.3 billion) from KFW Development Bank, concluded in November 2023.
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- US$ 2.8 billion (approximately R56 billion) is in the form of commercial debt and equity, which has not yet been programmed.
A just transition is critical to South Africa’s decarbonisation journey. Government has consulted widely, including with affected labour unions, on the core provisions that are required to manage any anticipated economic shifts as a result of the energy transition.
The results of these consultations have been captured in the Just Transition Framework and the Just Energy Transition Investment Plan, amongst others.
Based on wide-ranging consultation, including with labour unions, the Presidential Climate Commission has developed proposals for employment-creation opportunities in Mpumalanga that can be realised before 2030. The proposals are being used by the Mpumalanga province and JETIP PMU to inform planning and implementation, including the rollout of social employment programmes in areas such as Komati power station.
The skilling, reskilling and upskilling of workers is essential to transition workers to new opportunities. The JET-IP is channelling funding into three Skills Development Zones (SDZs) around each core value chain, namely: renewable energy, green hydrogen and new energy vehicles. These bring together local partners to support localisation and local economic development.