Cabinet endorses Just Energy Transition Investment Plan ahead of COP27

20th October 2022 By: Terence Creamer - Creamer Media Editor

Cabinet endorses Just Energy Transition Investment Plan ahead of COP27

Cabinet has officially endorsed the Just Energy Transition Investment Plan (JET-IP) following a presentation it received at its latest meeting, held on Wednesday October 19.

“After welcoming a presentation on the [Just Energy Transition Partnership] JETP and the JET-IP, Cabinet endorsed the JET-IP and expressed its appreciation for the detailed work undertaken to develop it,” the Cabinet statement released on October 20 reads.

The statement notes that the JET-IP outlines the investments required to achieve the decarbonisation commitments made by government, while promoting sustainable development, and ensuring a just transition for affected workers and communities.

In a post-Cabinet briefing Minister in the Presidency Mondli Gungubele said that more details on the JET-IP - which is backed by France, Germany, the US, the UK and the European Union and which is expected to be formally endorsed at the COP27 climate negotiations in Egypt next month - would be provided during a briefing that will be hosted soon by the Inter-Ministerial Committee on Climate Change.

At COP26 in Scotland last year the JETP partners made an $8.5-billion offer to support South Africa’s transition away from coal and to support workers and communities that could be negatively affected by such a shift.

Following COP26, South Africa established a Presidential Climate Finance Task Team, headed Daniel Mminele, to finalise the JET-IP, which is expected to focus primarily on electricity sector projects, including much-needed investment into the grid, but also include funding support for the development of electric vehicle and green hydrogen industries.

This week, Eskom CEO André de Ruyter again stressed the need for the bulk of the funding to be directed the way of the electricity sector and questioned the desirability of diverting concessional funds to the other two sectors.

In the case of green hydrogen, he noted that surplus green electrons were a precondition for the industry’s development and that that precondition was currently absent in a context where Eskom was having to implement loadshedding to stabilise the grid.

De Ruyter also questioned whether concessional funding should flow to automotive companies and their shareholders.

Forestry, Fisheries and the Environment Minister Barbara Creecy noted that the $8.5-billion would translate to about R150-billion, which fell well short of the more than R1-trillion South Africa required over the period to transition to an energy system aligned with the decarbonisation pledge.

However, she expressed the hope that the funding would serve as a catalyst for further private investment in support of the transition and encourage stakeholders to comment on the JET-IP, which she said would be released for public consultation before year-end.