Secretly negotiated South African climate finance deal: a gift to private investors while choking local development

The Institute for Economic Justice criticizes the $8.5-billion Just Energy Transition Partnership (JETP) in South Africa, arguing that its reliance on loans and private-sector 'de-risking' rather than grants will increase energy costs and benefit foreign investors while neglecting local manufacturing and worker protections. The document further condemns the secretive nature of the negotiations, which it claims undermines procedural justice and excludes key stakeholders.

• The JETP financing structure is heavily skewed toward loans and guarantees rather than grants, with only 4% of the JET-IP consisting of grants. This model relies on 'blending' public and private finance to 'de-risk' private investment, which the author argues guarantees profits for private providers while the South African government assumes the risk.
• The reliance on independent power producers (IPPs) and 'cost-reflective tariffs' is expected to increase the cost of energy and exacerbate energy poverty. Long-term contracts lock the state into buying electricity at set prices regardless of falling renewable energy costs, potentially limiting the state's ability to provide electricity subsidies for poor households.
• The JET-IP fails to sufficiently support the localization of the renewable energy value chain, allocating only R1.6-billion for this purpose. This lack of investment in local manufacturing risks a 'colossal social crisis' by failing to absorb workers from the coal value chain into the clean energy system.
• The negotiation process for the JETP and JET-IP was characterized by secrecy and a lack of meaningful consultation with civil society and organized labor. This approach is described as undermining the principle of 'procedural justice' established in South Africa's Just Transition Framework.

APA

Baloyi, B., & Isaacs, G. (2022). Secretly negotiated South African climate finance deal: a gift to private investors while choking local development. Institute for Economic Justice. https://iej.org.za/press-room/in-the-media/secretly-negotiated-south-african-climate-finance-deal-a-gift-to-private-investors-while-choking-local-development/

Chicago

Baloyi, Basani, and Gilad Isaacs. Secretly negotiated South African climate finance deal: a gift to private investors while choking local development. Institute for Economic Justice, 2022. https://iej.org.za/press-room/in-the-media/secretly-negotiated-south-african-climate-finance-deal-a-gift-to-private-investors-while-choking-local-development/.

Wikipedia

{{cite press release |last1=Baloyi |first1=Basani |last2=Isaacs |first2=Gilad |title=Secretly negotiated South African climate finance deal: a gift to private investors while choking local development |publisher=Institute for Economic Justice |date=10 November 2022 |url=https://iej.org.za/press-room/in-the-media/secretly-negotiated-south-african-climate-finance-deal-a-gift-to-private-investors-while-choking-local-development/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{baloyi2022secretly, author = {Baloyi, Basani and Isaacs, Gilad}, title = {{Secretly negotiated South African climate finance deal: a gift to private investors while choking local development}}, publisher = {Institute for Economic Justice}, year = {2022}, month = nov, url = {https://iej.org.za/press-room/in-the-media/secretly-negotiated-south-african-climate-finance-deal-a-gift-to-private-investors-while-choking-local-development/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }