Skip to main content
Read page text
page 6
6 African Business August/September 2023 Business Intelligence News South Africa’s “Just Energy Transition Partnership” deal, signed at the 2021 Cop26 climate conference, is proving controversial even within the countr y’s government. Ben Payton reports. South Africa’s electricit y minister Kgosientsho Ramokgopa has become the latest figure to criticise his own government’s Just Energy Transition Partnership. The so-called JETP deal, originally agreed at the Cop26 climate summit in Glasgow in 2021, commits South Africa to accelerating its phase-out of coal-fired power generation in return for funding from a group of leading economies. South Africa became the first country in the world to sign a JETP deal. It is in line to receive up to $8.5bn under the programme, which president Cyril Ramaphosa hopes will catalyse much greater levels of private investment into renewable energy generation. But JETP has never been universally popular among Ramaphosa’s colleagues. Gwede Mantashe, the powerful minister of mineral resources and energy, has implicitly criticised the deal on multiple occasions, arguing that coal must retain a role in the energy mix. Unions allied to the ruling African National Congress are also determined to preser ve hundreds of thousands of jobs in the coal industr y. Now, with the country enduring a nightmare year of “load-shedding” (power rationing), Ramokgopa has added his voice to the chorus of criticism. Speaking at an event organised by Standard Bank, the minister described the closure of Komati power plant, the first coal-fired power station to shut since the JETP programme was agreed, as “an injustice” perpetrated “in the name of the transition”. He claimed that the power plant closed last October “because someone gave us money and said decarbonise,” adding that alternative sources of energy that have been brought online fail to compensate for the loss of coal-fired generation at Komati. A just transition? While Ramokgopa spoke of Komati’s theoretical generating capacity of 1,000 MW, in fact only one of the 60-year-old plant’s nine units was operational at the time of its decommissioning, and this unit supplied just 1 2 1 M W. Even so, many parts of South African civil society agree that critics of JETP have a point. Nkateko Chauke, programme director at Oxfam South Africa, points out that almost all the $8.5bn funding promised under JETP is set to take the form of loans and loan guarantees: only 4% will be delivered as grants. “An energy transition framed through the current lens of the JETP is unlikely to be ‘just’,” she says. Chauke warns that private sector investment in electricit y generation through the JETP framework means that plan is “prioritising privatesector profit opportunities in infrastructure provisioning while the state assumes t h e r i s k ”. “A JETP must prioritise justice, both in how it is designed, and where the benefits flow,” agrees Richard Halsey, a policy advisor in the South African energy team at the International Institute for Sustainable Minister attacks South Africa’s climate fi n a n c e d e a l Development. Yet he disputes the implication that the JETP is being unjustly foisted upon South Africa. “The point of the JETP is not to meet some foreign agenda,” says Halsey. “From a climate change, environmental, human health, economic, and equity perspective, South Africa has no choice but to follow a just transition to a lower carbon e n e r g y s y s t e m .” Meanwhile, other African countries are considering their own JETP programmes. In June, Senegal became the second African countr y to agree a deal. Halsey describes this as “encouraging news”, adding that a JETP framework can provide “a real opportunity” for other African countries “to jumpstart their clean energy transitions”. He concedes, however, that “there are lots of lessons to be learned from the JETP process in South Africa.” He specifies the need for greater participation and transparency in the design of a JETP as key lessons that could help other African countries ensure that transition plans enjoy public and political support.
page 7
August/September 2023 African Business 7 Business Intelligence News Egypt and Ethiopia have agreed to urgent negotiations on their long-running dispute over the waters of the River Nile brought about by the filling of the Grand Ethiopian Renaissance Dam. David Thomas reports. There are renewed hopes of a diplomatic breakthrough between Ethiopia and Egypt in the long-running dispute over the future of a critical hydroelectric dam on the River Nile. The countries have been at loggerheads for years over the Grand Ethiopian Renaissance Dam (GERD), which Ethiopia says is vital for its power generation needs but Egypt fears could limit its access to Nile waters and cripple its w a t e r s e c u r i t y. Renewed talks promised However, in July Ethiopian prime minister Abiy Ahmed met Egypt’s President Abdel Fattah al-Sisi on the sidelines of a meeting to discuss the civil conflict in Sudan, which also has concerns over the dam, and the two leaders agreed to resume negotiations and to “make all necessary efforts to finish it within four months”. In a joint statement, the governments agreed to “initiating urgent negotiations to finalise the agreement between Egypt, Ethiopia and Sudan to fill the Renaissance Dam and put the rules for its o p e r a t i o n [s i c]”. The statement added that during the period of the negotiations, “Ethiopia made clear its commitment, during the filling of the dam during the hydrological year 20232024, not to cause significant harm to Egypt and Sudan in order to provide the water needs of both countries.” It is yet to be confirmed where the negotiations will be held, and which countries, if any, will mediate the discussions. Previous USbrokered talks on the dam came to nothing in 2020. Despite opposition from Egypt and Sudan, Ethiopia has continued to fill the dam during recent rainy seasons. But in a social media post following the announcement of the new talks, Abiy attempted to reassure Egypt that the dam will not affect its water security. “Our development needs in both the upstream and downstream countries are increasing due to population growth,” said Abiy. “This calls for Egypt and Ethiopia to work together to achieve sustainable development and establish a genuine partnership that fulfils the aspirations of our people for sustainable development and a decent life.” Many problems still to be resolved Analysts said that the talks were a positive step forward but that sticky points will need to be ironed out. Tirusew Asefa, a water resources expert and courtesy professor at the University of South Florida, tweeted Planned Ethiopia-Eg ypt dam talks spark resolution hopes that agreements on filling and rules of operation would be “ambitious to complete in four months”. Asefa said there are “significant differences” remaining ahead of any agreement. “Among the sticky points are: whether #GERD should be used as a water sharing instrument via legally binding releases in perpetuit y when there is no water sharing agreement between the countries; who is responsible for drought management, & more.” He further explained: “in order to have a water sharing agreement, we need to know how much total water is there in the first place, what is fair for everyone, etc. That ain’t happening in 4-months. Forget the 1959 colonial agreement. [It will] probably need ~10 years of assessment & m o n i t o r i n g .” Former World Bank president David Malpass hailed the talks, which he said were critical for regional water security. “Important progress on the Grand Ethiopian Renaissance Dam (GERD) on the Nile River. Effective use of water is vital, especially in this arid region,” he tweeted.

Page Text

View plaintext

6 African Business August/September 2023

Business Intelligence News

South Africa’s “Just Energy Transition Partnership” deal, signed at the 2021 Cop26 climate conference, is proving controversial even within the countr y’s government. Ben Payton reports.

South Africa’s electricit y minister Kgosientsho Ramokgopa has become the latest figure to criticise his own government’s Just Energy Transition Partnership. The so-called JETP deal, originally agreed at the Cop26 climate summit in Glasgow in 2021, commits South Africa to accelerating its phase-out of coal-fired power generation in return for funding from a group of leading economies.

South Africa became the first country in the world to sign a JETP deal. It is in line to receive up to $8.5bn under the programme, which president Cyril Ramaphosa hopes will catalyse much greater levels of private investment into renewable energy generation.

But JETP has never been universally popular among Ramaphosa’s colleagues. Gwede Mantashe, the powerful minister of mineral resources and energy, has implicitly criticised the deal on multiple occasions, arguing that coal must retain a role in the energy mix. Unions allied to the ruling African National Congress are also determined to preser ve hundreds of thousands of jobs in the coal industr y.

Now, with the country enduring a nightmare year of “load-shedding” (power rationing), Ramokgopa has added his voice to the chorus of criticism. Speaking at an event organised by Standard Bank, the minister described the closure of Komati power plant, the first coal-fired power station to shut since the JETP programme was agreed, as “an injustice” perpetrated “in the name of the transition”.

He claimed that the power plant closed last October “because someone gave us money and said decarbonise,” adding that alternative sources of energy that have been brought online fail to compensate for the loss of coal-fired generation at Komati.

A just transition? While Ramokgopa spoke of Komati’s theoretical generating capacity of 1,000

MW, in fact only one of the 60-year-old plant’s nine units was operational at the time of its decommissioning, and this unit supplied just 1 2 1 M W.

Even so, many parts of South African civil society agree that critics of JETP have a point. Nkateko Chauke, programme director at Oxfam South Africa, points out that almost all the $8.5bn funding promised under JETP is set to take the form of loans and loan guarantees: only 4% will be delivered as grants.

“An energy transition framed through the current lens of the JETP is unlikely to be ‘just’,” she says. Chauke warns that private sector investment in electricit y generation through the JETP framework means that plan is “prioritising privatesector profit opportunities in infrastructure provisioning while the state assumes t h e r i s k ”.

“A JETP must prioritise justice, both in how it is designed, and where the benefits flow,” agrees Richard Halsey, a policy advisor in the South African energy team at the International Institute for Sustainable

Minister attacks South Africa’s climate fi n a n c e d e a l

Development. Yet he disputes the implication that the JETP is being unjustly foisted upon South Africa.

“The point of the JETP is not to meet some foreign agenda,” says Halsey. “From a climate change, environmental, human health, economic, and equity perspective, South Africa has no choice but to follow a just transition to a lower carbon e n e r g y s y s t e m .”

Meanwhile, other African countries are considering their own JETP programmes. In June, Senegal became the second African countr y to agree a deal. Halsey describes this as “encouraging news”, adding that a JETP framework can provide “a real opportunity” for other African countries “to jumpstart their clean energy transitions”.

He concedes, however, that “there are lots of lessons to be learned from the JETP process in South Africa.” He specifies the need for greater participation and transparency in the design of a JETP as key lessons that could help other African countries ensure that transition plans enjoy public and political support.

read next page

My Bookmarks

Buy this Book
Skip to main content