By Beth Amato
The Just Energy Transition (JET) Project Management Unit (PMU) in the Office of the Presidency has introduced a funding platform to facilitate funding from multiple sources and $11.596 billion (R221bn) in international pledges into clean energy projects.
In a media briefing yesterday, which was held to help clear up the confusion around how the JET Implementation Plan 2023–2027, approved by the Cabinet in November 2023, will practically transpire, Joanne Yawitch, JET PMU head, said the funding platform primarily aimed to match available funds to projects working in the JET space.
Of the $11.596bn pledged by the international community, $756bn is allocated to grants. Half of that money had been deployed. The Funding Platform will now facilitate the flow of the remaining 50% to JET IP activity. Other funding was hoped to be accessed.
“Priority project areas are electricity, new energy vehicles and green hydrogen. Such projects should also protect vulnerable workers and communities, ensure sustainable employment and spur inclusive economic growth,” Yawitch said.
According to the JET Implementation Plan, the funding platform is a “matchmaking” service that connects grant funders with beneficiaries. The JET PMU will provide assistance to applicants and will recommend projects to funders. The mechanism has no role in grant approvals.
“The funding platform is an important part of the implementation process,” said Yawitch.
“We have had a funding-to-project pipeline where not much money goes to the organisations working on the ground. This new mechanism now ensures a better flow of funding. It will also provide oversight and offer advisory services.”
Yawitch noted that the project financing pipeline would particularly support communities in Mpumalanga, who would be affected by the decommissioning of coal-fired power stations in the region.
“The grant package is important because if we want to achieve a just transition, we have to build skills capacity and create alternative livelihoods. Communities need to own the transition process.”
Grant beneficiaries could include government institutions, non-governmental organisations, small, medium and micro enterprises, community-based organisations and trade unions. Funders are development finance institutions, corporates, philanthropists, the International Partners Group and multilateral development banks.
“We need to match organisations with the reach to drive the JET Implementation Plan,” said Yawitch. This is so the country’s commitment to a low-carbon and climate-resilient economy by 2030 is meaningfully realised.
“All modelling indications point to us being on track to stay within the range of our nationally determined contribution as pledged with the United Nations Framework Convention on Climate Change in 2021.”
Meanwhile, the JET PMU has created a grants projects register and database.
Rudi Dicks, a project management head in the Office of the Presidency, said the funding mechanism must be transparent and accessible. It would also be used as a monitoring and evaluation tool. In time, the register would include concessional (meaning below-market interest rates) and commercial financing from international partners, philanthropies and the South African private sector.
He explained that expanding grid capacity and building transmission infrastructure, critical to mitigating South Africa’s electricity crisis and enabling the roll-out of renewables, would not go through the JET IP funding platform.
“We need to find other funding mechanisms and partner with the private sector. It’s important to have access to cheap capital and engage with international partners. We have been honest with people about our generation capacity and will delay decommissioning power plants to give us sufficient time to build this up,” said Dicks.
The JET briefing comes hot on the heels after Minister of Electricity Kgosientsho Ramokgopa on Monday announced that in the next fortnight he would unveil a plan on the mechanism of funding the expansion of the transmission grid, which could unlock more than 2 300 megawatts of energy in the short term.
This comes as South Africa needs to expand its electricity transmission lines by more than 14 000km over the next few years to accommodate the additional generation capacity from renewables not connected to the grid in the Eastern Cape, Northern Cape and Western Cape.
* Beth Amato is a freelancer for Business Report.
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