A Framework for Understanding the Just Energy Transition Partnership on South Africa’s Just Transition

The document critiques the South African JETP for prioritising blended finance and public-private partnerships (PPPs), which the authors argue shifts commercial risk to the state while privatising gains. It highlights how this model can increase energy poverty through higher tariffs and hinder local renewable energy manufacturing. The brief suggests alternatives such as regulating private finance, pursuing debt cancellation and climate reparations, and implementing allocative green credit policies.

• The USD 8.5 billion Just Energy Transition Partnership (JETP) is a financing deal between South Africa and the governments of France, Germany, the United Kingdom, the United States, and the European Union to support South Africa’s revised Nationally Determined Contribution (NCD).
• The JETP's reliance on blended finance and public-private partnerships (PPPs), specifically Independent Power Producers (IPPs), forces the state to 'de-risk' private investment, which the authors argue exposes the state to significant debt and commercial risk.
• Independent Power Producers (IPPs) are more dependent on state guarantees than the state utility Eskom; the value of state-backed guarantees for IPPs is R38.47 billion per 1GW of installed capacity, compared to R7.95 billion per 1GW for Eskom.
• The use of long-term 'lock-in' contracts prevents the state and consumers from benefiting from the falling levelised cost of electricity (LCOE) for renewable energy, as Eskom remains bound to tariffs from earlier bidding rounds that are now higher than market rates.
• Private financing models for energy may exacerbate energy poverty for poor South African households and SMMEs by creating pressure to increase user fees and tariffs to guarantee revenue streams for private financiers.
• The focus on IPP financing may undermine the localisation of renewable energy manufacturing and decent work creation, as IPPs often resist local content requirements in favour of importing cheaper components to secure short-term profits.
• The authors propose three alternative financing pathways: regulating de-risked private finance through contract transparency and enforced localisation; pursuing debt cancellation (including 'odious debt' like the World Bank loan for the Medupi plant) and climate reparations; and implementing allocative green credit policies.
• Allocative green credit policies, inspired by 'East Asian tigers', would integrate monetary, fiscal, and industrial policies to direct finance toward sustainable productive investments and local manufacturing rather than prioritising private sector risk minimisation.

APA

Baloyi, B., & Krinsky, J. (2022). A Framework for Understanding the Just Energy Transition Partnership on South Africa’s Just Transition. Institute for Economic Justice. https://iej.org.za/wp-content/uploads/2026/02/IEJ-policybrief-ClimateFinance1.pdf

Chicago

Baloyi, Basani, and Jezri Krinsky. A Framework for Understanding the Just Energy Transition Partnership on South Africa’s Just Transition. Institute for Economic Justice, 2022. https://iej.org.za/wp-content/uploads/2026/02/IEJ-policybrief-ClimateFinance1.pdf.

Wikipedia

{{cite report |last1=Baloyi |first1=Basani |last2=Krinsky |first2=Jezri |title=A Framework for Understanding the Just Energy Transition Partnership on South Africa’s Just Transition |publisher=Institute for Economic Justice |date=November 2022 |url=https://iej.org.za/wp-content/uploads/2026/02/IEJ-policybrief-ClimateFinance1.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{baloyi2022framework, author = {Baloyi, Basani and Krinsky, Jezri}, title = {{A Framework for Understanding the Just Energy Transition Partnership on South Africa’s Just Transition}}, institution = {Institute for Economic Justice}, year = {2022}, month = nov, url = {https://iej.org.za/wp-content/uploads/2026/02/IEJ-policybrief-ClimateFinance1.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }