CAPE TOWN: South Africa’s efforts to shift towards a low emissions economy have been strengthened by the conclusion of the negotiations for a R7.6 billion loan for the implementation of the country’s Just Energy Transition Plan (JETP) by the Agence Française de Développement (AFD).

According to South African Government News Agency, this innovative policy-based financing, the largest ever on AFD’s balance sheet, was developed in close collaboration with the JET Programme Management Unit (JET-PMU) in the Presidency and National Treasury to support the just dimensions of the Just Energy Transition (JET), maximising the social outcomes of the energy transition for local communities.

This loan builds on the £300 million public policy loan provided in 2022, bringing France’s total contribution to the JETP to £700 million out of the £1 billion pledged at COP26 (United Nations Climate Change Conference) in Glasgow.

National Treasury’s Head of Asset and Liability Management, Mmakgoshi Lekhethe, highlighted the par
tnership with the AFD as an opportunity for South Africa to address practical issues of jobs, skills, social support, and governance. Lekhethe noted the necessity for coordination across all spheres of government to integrate JET into fiscal policy choices effectively.

South Africa’s Just Energy Transition programme aims to ensure that communities reliant on carbon-intensive energy sources, like coal, are not left behind in the transition to a low-emission economy. It underscores the importance of embedding just transition outcomes in policy conditions, potentially driving new jobs, social justice, and poverty reduction.

The AFD’s JET public policy loan focuses on social equity, targeting job creation, poverty reduction, social justice, and equitable access to electricity supply. Additionally, the AFD Group provides technical cooperation and capacity building to South African institutions related to JET. The loan is linked to a set of policy reforms with a robust monitoring and evaluation framework to track
progress.

South Africa’s JET is supported by a governance and institutional framework that includes the Presidential Climate Commission (PCC), a dedicated JET-PMU, and a comprehensive investment plan, backed by international partnerships with France and other countries.

AFD’s Regional Director for Southern Africa and Country Director for South Africa, Audrey Rojkoff, stated that the AFD is committed to balancing South Africa’s energy needs and climate commitments. The focus is on ensuring that the transition benefits all segments of society through careful planning and implementation, with anticipated positive outcomes throughout the transitioning process.