If the German delegation in Sharm el-Sheikh is proud of anything, it’s “Jatpi”. It’s already a household name in the halls of the World Climate Conference, the abbreviation JETP, which stands for Just Energy Transition Partnership. This is a partnership in which rich countries offer money, technology and knowledge to help emerging countries energy transition to help. The first JETP is now taking shape: France, Great Britain, the USA, the European Union and Germany are accompanying South Africa on its way away from coal.
Numbers make it clear how difficult that will be: 90 percent of the electricity in South Africa come from burning coal. 90,000 people are directly employed in the sector, and tens of thousands more are indirectly dependent on it. There are tangible financial interests, South Africa is one of the world’s largest coal exporters. Because the West wants to boycott Russian coal as a result of the war in Ukraine, demand has increased. And the price. Just last year, the state-owned company Eskom inaugurated one of the largest coal-fired power plants in the world in the north of the country.
“We are confident that we can achieve the goals,” says South Africa’s President
Nevertheless, the government in Pretoria agreed to the deal. “We are confident that we can achieve the goals,” said President Cyril Ramaphosa in his speech at the world climate conference on Tuesday. Coal mining has also been a problem in recent years. Many of the power plants are old and dilapidated, and Eskom has repeatedly had to be rescued financially by the state. There is often a power outage somewhere in the country, and the networks in particular are poorly developed. That’s where outside help comes in handy.
The donor countries will provide 8.5 billion US dollars over the next five years, one billion of which will come from Germany. A loan of 300 million euros was only signed by the Kreditanstalt für Wiederaufbau (KfW) on Monday. The Germans are working with South Africa to build solar and wind power plants, to make the power grids fit for renewable electricity, and generally to increase energy efficiency. More generally, the billions from JETP are intended to help South Africans move away from fossil fuels and promote electric vehicles and green hydrogen projects. The transition should be “fair”. Similar to the Lausitz or the Rheinisches Revier, regions and employees who are directly affected by the change are to be given special support. For example through retraining.
The South African government believes it will take 20 years to complete this process. And also mentions an amount that is necessary for this: almost 90 billion US dollars. The JETP can only be the initial spark in the hope that private investors will then also enter the country’s new energy business.
“The partnership will only work if it helps South Africa to also reduce its debt service,” said Saliem Fakir, executive director of the African Climate Foundation, a climate and development think tank in Cape Town. The funds would have to be made available accordingly. So far, the governing party ANC has backed the project, reports Fakir, although the coal industry is firmly anchored in the country. “The key is to get both industry and coal workers on board,” he believes. Because it is not yet foreseeable that permanent jobs here will later be replaced by jobs in the field of renewable energies.
To ensure that this happens, the government now wants to liberalize the electricity market in order to enable private investments in renewable energies at all. And in the field of green hydrogen, for which European industry is almost eagerly awaiting, South Africa is repeatedly mentioned as a possible supplier.
Both the donor countries and South Africa emphasized at the world climate conference that this partnership should be an example for many others. Jennifer Morgan, State Secretary at the Federal Foreign Office and German negotiator, speaks of a lighthouse project. There is hope that other emerging countries will agree to such a deal and that global greenhouse gas emissions can be substantially reduced as a result. Because the JETP could solve a knot around climate finance. Some want money, others ask: What for?
Negotiations are ongoing with Senegal, Indonesia, Vietnam and India
The industrialized countries are currently conducting concrete negotiations on further JETPs with Senegal, Indonesia, Vietnam and India. The three Asian countries in particular are still heavily dependent on coal, and their greenhouse gas emissions have risen sharply in recent years. “We need these emerging countries to achieve the 1.5-degree target,” said Jochen Flasbarth, State Secretary in the German Development Ministry, at a press conference in Sharm el-Sheikh on Tuesday. But they in turn need financial help with the transformation.
The German delegation brakes hopes, even during the climate conference further JETPs could be fixed. An agreement with Indonesia may be imminent, the country is hosting the G-20 summit next week and could announce a conclusion there itself. The other countries are apparently still unwilling to implement ambitious climate goals in return for the billions in aid.