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Just Energy Transition Partnerships (JETP)

A Global Effort Towards Sustainable Power

The Just Energy Transition Partnerships (JETP) emerged as a financing mechanism in 2021. The program aimed to facilitate the transition from coal-dependent economies to clean energy alternatives while addressing social consequences. Born from the NFCCC COP26 in November 2021 in Glasgow, JETP was amended a year later at COP 27 in Egypt, reflecting the continued commitment of nations towards sustainable development.

Just Energy Transition Partnerships work on driving countries away from a dependence on fossil fuels
Transitioning from fossil fuels to renewable, clean power sources requires sizable investment in energy infrastructure for countries

As we approach COP 28 in Dubai, GIA inspects the current Just Energy Transition Partnerships and roles of various players.

Understanding the JETP Mechanism

At its core, JETP operates as a collaborative effort where wealthier nations provide financial support to coal-dependent nations. The JETP project aids developing nations in the phase-out of coal and the adoption of clean energy solutions. 

JETP partnerships address social consequences with reskilling, upskilling and the creation of new jobs, to ensure a fair transition for affected workers and communities.

Funding Channels and Contributors

As of March 2023, the donor pool for JETP includes International Partners Group (IPG) and Glasgow Financial Alliance for Net Zero (GFANZ) Working Group. 

IPG comprises of nations such as Japan, the USA, Canada, Denmark, France, Germany, Italy, Norway and the UK. 

GFANZ Working Group involves multilateral and national development banks and finance agencies, including HSBC and Citi Bank.

Financial instruments employed by the JETP include grants, concessional loans, commercial loans, and guarantees. This financial support aims to empower nations in their transition efforts. 

Country Spotlights

South Africa | India | Indonesia | Vietnam | Senegal

1. South Africa’s Approach to JETP

South Africa stands as the first nation committed to the principles of the Just Energy Transition Partnerships. Key nations from IPG have promised $8.5 USD billion in financing to South Africa. Their implementation Plan outlines strategic investments in electricity, new energy vehicles, and green hydrogen sectors.

South Africa is part of the Just Energy Transition Partnerships
Cape Town, South Africa (credit Tobias Reich)

The approach extends beyond financing, incorporating policy reforms such as Climate Change Bill and the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). The RSA National Treasury also proposed a carbon tax rate reach $20 USD per tonne by 2026, extending to $120 USD per tonne by 2050.  

South Africa’s other green initiatives include the Green Finance Taxonomy –  which provides voluntary guidelines on assets, projects and sectors defined as “green” – a National Mine Closure Strategy, and the Sustainability and Climate Change Disclosure Guidance, published by the Johannesburg Stock Exchange on 14th June 2022.

However, in May 2022, the South African government delayed the closure of coal-fired power plants to rebalance energy shortages. This decision has raised concerns about the feasibility of the JETP.  

2. India’s Unique Position and Challenges

India’s involvement in the JETP approach has been met with unique challenges and considerations. While partnering with JETP to support its transition away from coal, India faces challenges in committing to a coal phase-out timeline, deemed “unviable” for the country.

The negotiation process with developed nations, including the G7 and the European Union, revolves around India’s preference for grants versus free loans and its focus on expanding renewable energy without committing to a coal phase-out.

India's agricultural solar minigrids, supported by Just Energy Transition Partnerships
Solar PV used for agriculture in Gujarat, India (credit VD Photography)

India are giving mixed signals, relaxing environmental regulations on coal while simultaneously aiming to reduce coal’s share in its energy mix. 

Balancing the need for affordable and stable energy with environmental goals and social considerations poses a significant challenge for India’s JETP engagement.

3. Indonesia’s Commitment to Transition

Indonesia joined the JETP approach in November 2022 after the G20 Summit in Bali. The country secured a financing deal of $20 USD billion over the next three to five years. Half of these funds are to be provided by the IPG. 

Plans include a transition from coal to renewable energy sources, with a focus on peaking power sector emissions by 2030 and maintaining carbon dioxide emissions levels lower than previously expected.

Indonesia was the third country to join the Just Energy Transition Partnerships
Jakarta, Indonesia (credit Adrian Pranata)

Constructing the package involved a diverse set of instruments, including grants, concessional loans, market-rate loans, guarantees, private investments, and technical assistance. Indonesia’s commitment is reinforced by the launch of the Secretariat for the Just Energy Transition Partnership in February 2023.

4. Vietnam’s Ambitious JETP Plan

Vietnam’s participation in the JETP approach was announced in December 2022, with an initial fund of $15.5 USD billion over the next three to five years. The funding is made up of $7.75 USD billion USD from the IPG, including Canada, France, Germany, Italy, Japan, the UK, the US, the EU, Denmark, and Norway, and at least $7.75 billion USD from GFANZ.

Just Energy Transition Partnerships in Ha Long, Vietnam
Hạ Long, Vietnam (credit Ammie Ngo)

The partnership aims to support Vietnam in finance, technology, and capacity building, while also facilitating policy and regulation improvements to attract private investment in renewable energy.

Vietnam’s commitment is evident in the forthcoming publication of its JETP Resource Mobilization Plan (JETP – RMP) by November 2023. 

The nation’s emphasis on a comprehensive plan aligns with the collaborative and strategic nature of the JETP approach.

5. Senegal’s Path to a Sustainable Future

Senegal, in collaboration with the International Partners Group (IPG), has announced a Just Energy Transition Partnership. This partnership aims to achieve universal access to energy and establish a low-carbon, resilient, and sustainable energy system in Senegal.

Senegal joined the Just Energy Transition Partnerships recently
Île de Gorée, Dakar, Senegal (credit TD AD)

The partnership involves significant financial commitments from international partners, including EUR 2.5 billion in new and additional financing over an initial period of 3 to 5 years, starting in 2023. Senegal’s commitment to renewable energy is emphasized by the goal to increase the share of renewable energies in its electricity mix to 40% by 2030.

In a press release from the European Commission in June, President Macky Sall said: 

“The multifaceted crises we are experiencing today are straining African economies, particularly in their significant efforts devoted to economic development, access to energy and industrialization. Diversifying our energy sources and our supply chains will increase our resilience. The partnership for a just energy transition (JETP) that we are establishing today with our partners will make it possible to support the Senegalese dynamic that we started several years ago of incorporating renewable energies into our energy mix and securing our energy system thanks to all our natural resources in line with the Paris Agreement.”

Next for JETP

Approaching COP 28, the Just Energy Transition Partnership represents a crucial global initiative towards sustainable development and clean energy adoption.

Evidenced by the experiences of South Africa, India, Indonesia, Vietnam, and Senegal, the success of JETP hinges on a combination of financial commitments, robust policy reforms, and inclusive collaboration with various stakeholders.


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