The lowlight of our annual drive from Gauteng to the Lowveld is the view from the N4. The carnage wrought on our economy by Eskom’s ageing coal fleet is reflected perfectly in the hellscape as we travel through Emalahleni, Middelburg and Makhazeni.
As coal mines give way to giant coal-fired power stations and the roads disintegrate, it’s impossible to miss the ghastly social and environmental manifestation of decline and disarray. The landscape is brutalised, and the horizon littered with smokestacks.
This week at COP27 in Egypt, SA’s coal habit will be discussed in broad technical terms, but unless you’ve seen it for yourself it is hard to conjure the sheer demoralising scale of the mess.
On Friday night, President Cyril Ramaphosa released the Just Energy Transition Partnership Investment Plan (JETP IP), a document explaining how SA will spend $8.5bn of loans, grants and guarantees to kick-start its transition away from fossil fuel-powered energy.
Many people hope it will stand as an exemplary solution for countries that need access to cheap energy to boost their development as much as they need to decarbonise. As with anything involving SA, they may find it is more complicated than they expected.
The JETP deal, a mixture of concessionary finance and loan guarantees, was thought up by the British government at COP26 in Glasgow in 2021, and we’re the lab rats for what some hope will be rolled out elsewhere.
The weakness in an otherwise promising plan is not the notion that SA needs funding for an energy transition from coal to renewables, but that it needs funding for a “just transition”. As can be the way with ideas that rely on etymological inflation, the notion of what constitutes “just” in a just transition is contested. This vagueness is due partly to the innate complexity of justice, but in this case also perhaps so that it would not be interrogated too closely. Now that it’s been laid out for all to see, it appears that this is probably the case.
To be clear, much of the “justice” work in the JETP deal describes work that the government ought to have done decades ago. Included in the document are “repurposing of coal mining land” (surely a condition in a mining licence that ought to be enforced by the state?), the “diversification of local economies”, “care for coal workers”, “policies for post-mining redevelopment” and “investment in youth”. These appear to describe the basic functioning of a state, and should have no place in an energy transition finance deal.
The fact is that the energy transition is partly responsible for the circumstances experienced by communities attached to Eskom’s coal fleet and associated mines. Those power stations were built during apartheid by a racist mineral-industrial complex to provide cheap electricity to a minority of the population and to power its development and industrialisation.
No real plans were made for affected communities during or at the end of the plants’ lifespans because they were black communities, and they were dispensable. Injustice is hard-baked into SA’s energy system and that is not the fault of the technology. It is impossible to really understand the mess we’re in until we accept this.
Climate finance should not to be used to fund a deficit of government work.
The Nats may have built it, but the ANC has been sailing it for 30 years. In pushing for a “just” transition, overseas funders are financing the fig leaf that saves government’s dignity. It is our government that has not done enough to address the apartheid design of these places, and it is our government that has trashed municipal services in the towns that have always had big employers: power plants and mines.
Asking Eskom, of all entities, to worry about social justice is just absurd. It was designed to deliver electricity, historically at the expense of justice. Aside from all of its operational and financial woes, it is little surprise that the government struggles to raise grants for “just” energy projects. It is like asking a carpenter to make a soufflé. It may be able to persuade the big philanthropies and the World Bank and the Climate Investment Fund, but on what planet would foreign politicians who want to be re-elected hand over billions of dollars of cash to deliver “justice” to the one entity that has proven from 1948 to 2022 that it is incapable of doing its job?
Let us be honest about what this is about. Climate finance should not to be used to fund a deficit of government work. Anyone grumbling about a paucity of grants (cash handovers), the fraught nature of the negotiations, the complexity and conditionality of the loans and the guarantees, and the US’s insistence of investing through the private sector, needs to take a look about.
Our government is openly at war with itself over the future of energy in SA. Some dinosaurs want to keep the big old nationalist filth machine running, and the last time the World Bank thought it would lend us money to build an energy project they were probably surprised to discover they’d bought some gold taps in Dubai.
The trust gap is reflected in the nature of the finance, and if SA wants a better deal next time — and there will be a next time — the government will need to mind the gap.
• Parker is Business Day editor-in-chief.
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