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

The Institute for Economic Justice (IEJ) criticizes the $8.5-billion Just Energy Transition Partnership (JETP) and its Investment Plan (JET-IP) as a market-centric deal that prioritizes private investor profits over South African local development. The IEJ argues that the deal's reliance on loans and private-sector 'de-risking' threatens to increase energy costs, maintain high state financial risk, and fail to provide adequate social security or local manufacturing support for workers in the coal belt.

• The JETP is characterized by a market-centric financing model where only 4% of the JET-IP consists of grants, with the remainder being loans and guarantees. This structure relies on 'blending' public and private finance to 'de-risk' private investment, which the IEJ claims guarantees profits for private investors 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 provision and exacerbate energy poverty. The IEJ notes that lock-in agreements ensure Eskom pays set prices regardless of falling renewable energy costs, and the JETP lacks commitments to support the Free Basic Electricity subsidy for poor households.
• The JET-IP is criticized for failing to support the localization of the renewable energy value chain, allocating only R1.6-billion for this purpose. The IEJ argues this is insufficient to absorb workers from the coal value chain, as most renewable energy jobs are in manufacturing rather than generation.
• The JETP process is described as lacking transparency and procedural justice, with negotiations conducted 'behind closed doors' and minimal engagement with civil society and organized labor. The IEJ highlights that the Presidential Climate Commission's executive director criticized the 'continuing government secrecy about the deal'.
• There is a reported lack of social security support for workers and communities in South Africa's coal belt, specifically in Mpumalanga, despite International Labour Organisation guidelines.

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} }