South Africa’s numerous Just Energy Transition (JET) deals have been shrouded in mystery with little to no accountability made to the public.
This has led to questions and calls for the South African government to account for the missing Just Energy Transition (JET) billions.
This call comes just when IOL this week, reported that Agence Française de Développement (AFD) announced that it has finalised a landmark R7.6 billion loan to drive South Africa’s Just Energy Transition Plan (JETP).
The deal, the largest ever on AFD’s balance sheet, was coordinated closely with South Africa’s JET Programme Management Unit (JET-PMU) and National Treasury, underscoring the intensifying partnership between France and South Africa for a socially equitable energy transition.
Following the Wits University report titled: What happened to the Just Energy Transition grant funding?, MK Party Parliamentarians and energy activist and commentator, Princy Mthombeni have recently questioned some of the funds that have disappeared through the cracks in light of the $8.5bn Just Energy Transition grant to move SA from coal to clean energy?
The report seems to suggest that 4% of the fund was granted as grant money while 96% were loans, while 24% went to SA entities, 76% went to foreign entities from donor countries, e.g. Germany, USA, etc.
Furthermore, the report seems to suggest that at least $5.2bn was used before SA public consultations, while very little of it was used to build renewable infrastructure, instead $1.2bn went to foreign consultants while $1.5bn went to private sector investments, and only R453m went to skills development as well as British High Commission employee secondment to the presidential climate commission.
A recent report by researchers from Wits, Katrina Lehmann-Grube, Imraan Valodia, Julia Taylor and Sonia Phalatse, reveals that the $8.5 billion JET which was acquired by President Cyril Ramaphosa at the COP26 in Glasgow in 2021, has not been properly accounted for.
“The total amount accounted for in the grants register is R10,072,283,749, just more than R10-billion. This covers more than the original 4% stipulated in the Just Energy Transition Investment Plan – $329.7-million, which is R6.3-billion at the current exchange rate. This is presumably due to the addition of funds from the new partners.
“However, this too is unclear. There is a concern that the register may therefore include projects that were already happening anyway, representing funding that is neither new nor additional, a problem within climate finance more broadly,” the researchers say in their report.
Mthombeni whose analysis of this report has caught media attention says the lack of accountability to the funds must not be allowed to go on unchallenged.
“Perhaps, most troubling, is almost no funding dedicated to civil society groups and workers unions as only 0.4 percent of the funds went to these groups. There is specifically no money to help workers in the call sectors to provide social protection,” she said.
This deal was also endorsed by President Cyril Ramaphosa who announced in 2021 that SA has secured a commitment of R130bn of highly concessional climate financing from developed countries and the EU to help SA transition away from coal to cleaner forms of energy after being asked by EFF leader, Julius Malema during an oral session in the National Assembly in November 2021.
“In terms of the Political Declaration, the US, UK, Germany, France and the EU have offered and I wish to underline that this initial amount of US$ 8.5 billion – which is equivalent to around R131 billion has been offered – to support South Africa’s just transition efforts.
“This support will take the form of various financial instruments, ranging from grants to concessional loans at a lower interest rate.
“This funding will be mobilised over the next three to five years, with a view to longer-term engagement,” he said.
In 2021, Economic Freedom Fighters (EFF) leader Julius Malema had asked the President to provide the details of the terms and conditions of the R131 billion loan that was announced by the President of the United States of America at the Climate Change Conference of the Parties 26 (COP26).
The President said the offer by developed countries was an initial commitment, which may increase as discussions progress and further funds are identified.
Attempts go get comment from Eskom, treasury and the department of energy and minerals were unsuccessful at the time of going to print.
The Star