Secretly Negotiated South African Climate Finance Deal a Gift to Private Investors while Choking Local Development

The Institute for Economic Justice argues that South Africa's JETP is a flawed climate finance model that relies heavily on loans rather than grants, benefiting private Independent Power Producers (IPPs) while leaving the state with the financial risk. The author contends that the deal lacks transparency, fails to adequately fund the localization of the renewable energy value chain, and provides insufficient social security for workers in the coal belt.

• 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 sector investment, which the author argues guarantees profits for the financial elite while the South African government assumes the risk.
• The reliance on Independent Power Producers (IPPs) is expected to increase energy costs and exacerbate energy poverty. This is due to lock-in agreements where Eskom must purchase electricity at set prices regardless of falling renewable energy costs, and a lack of investment commitments to support the Free Basic Electricity subsidy for poor households.
• The JET-IP provides insufficient funding for the localization of the renewable energy value chain. While the estimated investment needed to meet the Integrated Resource Plan is R418bn, the JET-IP allocates only R1.6bn (approximately 0.4% of the requirement), which the author claims undermines local content requirements and risks a social crisis.
• The negotiation process for the JETP and JET-IP lacked transparency and meaningful public engagement, violating the principle of procedural justice. Negotiations were conducted 'behind closed doors' with key information withheld from social partners and civil society.
• There is a lack of adequate social security and employment guarantees for workers and communities affected by the transition, specifically those in the coal-belt of Mpumalanga, despite guidelines from the International Labour Organisation (ILO).

APA

Institute for Economic Justice (2022). Secretly Negotiated South African Climate Finance Deal a Gift to Private Investors while Choking Local Development. https://iej.org.za/press-room/statements/statement-secretly-negotiated-south-african-climate-finance-deal-a-gift-to-private-investors-while-choking-local-development/

Chicago

Institute for Economic Justice. Secretly Negotiated South African Climate Finance Deal a Gift to Private Investors while Choking Local Development. 2022. https://iej.org.za/press-room/statements/statement-secretly-negotiated-south-african-climate-finance-deal-a-gift-to-private-investors-while-choking-local-development/.

Wikipedia

{{cite press release |author=Institute for Economic Justice |title=Secretly Negotiated South African Climate Finance Deal a Gift to Private Investors while Choking Local Development |date=10 November 2022 |url=https://iej.org.za/press-room/statements/statement-secretly-negotiated-south-african-climate-finance-deal-a-gift-to-private-investors-while-choking-local-development/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{instituteforeconomicjustice2022secretly, author = {{Institute for Economic Justice}}, 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/statements/statement-secretly-negotiated-south-african-climate-finance-deal-a-gift-to-private-investors-while-choking-local-development/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }