The International Partners Group (IPG) of France, Germany, the UK, the US and the EU jointly endorsed South Africa’s Just Energy Transition Investment Plan (JET-IP) during the World Leaders Summit at COP27, which took place at Sharm El Sheikh, Egypt, on November 7. Engineering News editor Terence Creamer spoke to Presidential Climate Finance Task Team head Daniel Mminele about the significance of the endorsement and what it means for both the mobilisation of the $8.5-billion Just Energy Transition Partnership (JETP) funding package and South Africa’s far larger $99-billion (R1.5-trillion) JET-IP, which is proposed for implementation over the coming five years to 2027.

Terence Creamer: Could you reflect on the significance of the IPG’s endorsement of South Africa’s JET-IP?

Daniel Mminele: It is a very pleasing development in the sense that we have seen emphatic endorsements from all the leaders – UK Prime Minister Rishi Sunak, US President Joe Biden, French President Emmanuel Macron, German Chancellor Olaf Scholz and European Commission President Ursula von der Leyen – who made very strong comments in support of South Africa's plan. With the work that we have undertaken since the announcement that was made at COP26, we have essentially refuted some of the narrative that was being pushed, which was that we weren't going to make our deadline of being able to provide a substantive update by COP27. The feedback that we received in Sharm El Sheikh is really encouraging and people are continuing to refer to the potential for this JET-IP to serve as a model, or as a benchmark, for other countries to follow. As you know, the plan that has been developed is South African-owned and South African-led, and it makes sure that South Africa-specific ambitions and priorities are taken care of and that the plan overall is aligned to our international decarbonisation commitments, while at the same time speaking to the need to put us on a new, inclusive and thus sustainable growth and development path.

Reference is made in the IPG statement to the fact that the funding will be dispersed using various mechanisms, including grants, concessional loans and risk-sharing instruments. How will these flows actually take place and will it all be managed through the National Treasury?

There will be a multitude of disbursement mechanisms, which actually will inform much of the next part of the work that we need to do. Right at the outset, we defined a set of principles, about nine of them, that would guide us in how we would put the financing package together. One of the principles is that the financing flows from the partner countries should be certain and predictable, so as to avoid any delays. Another one was that they should take advantage of the capacity and the capability that exists within South Africa by, for instance, involving our own development finance institutions (DFIs), such as the Development Bank of Southern African and the Industrial Development Corporation. That is the kind of work that we will now need to get into more granularity. But in principle, the potential implementation partners through which funds will flow is clearly government, or the National Treasury, but also other implementing institutions such as the DFIs, State-owned enterprises, the private sector and other social partners. So, there’ll be a multitude of implementing partners, but it’s fair to say that the bulk of it will come through the fiscus.

When you say a principle of ‘certainty and predictability’ of the flows should apply, how will that be realised?

The political declaration that was signed in Glasgow giving rise to the JETP indicated that these countries were committing to mobilise an initial amount of $8.5-billion over the initial period of three to five years, subject to concurrence on an investment framework, which is essentially what we've put on the table now with the JET-IP. So, there are certain elements of the financing package that couldn't be suffi...