On Friday morning, before President Cyril Ramaphosa announced SA’s R1.5-trillion just energy transition (JET) investment plan in the afternoon, I happened to be on a visit to Gold Fields’ South Deep mine. The deep level gold mine has an 80-year lifespan, which means it will be the last shaft standing in SA’s gold industry. It also has a new 50MW solar energy plant, the first self-built renewable energy plant of this scale in SA.
South Deep spent R715m on the plant, which can supply a quarter of its electricity; its panels occupy 200 football fields of land around the mine. Looking across the sea of panels to the mine shafts was a reminder that one day soon almost all of SA’s mines might look like that. Certainly, most of them plan to build their own renewable energy plants, if they haven’t started doing so already. They want cleaner operations and a more secure electricity supply, and are keen to fund and build it themselves — as soon as the bureaucrats will let them.
South Deep’s solar expanse was a useful lens through which to view the president’s session later in the day, one that should have been an exciting milestone in SA’s energy journey. Yet it raised more questions than it answered.
A first question was how an $8.5bn offer from five international partners last November to help fund SA’s JET morphed into an $84bn (R1.5-trillion) grand plan a year later. At least one commentator described the plan as a wish list for the next five years — not the $8.5bn investment framework envisaged in last November’s political declaration by SA and the international partner group (IPG) comprising the UK, US, Germany, France and the EU.
Perhaps the president and his team needed to fend off the clamour of demands for a piece of the IPG package, which started life as a response to a plan devised by Eskom to shut down its oldest coal power stations, provide alternatives for affected communities, and strengthen the national grid to support more renewable energy. Perhaps they needed to put a clear rationale and sequence to the spending choices involved, especially since more than 90% of the IPG money is destined for the electricity sector’s green transition. Perhaps most important, given the controversy around that transition, the investment plan needed to be seen to be home grown, not imposed by rich international partners keen to pressure coal dependent poorer countries to cut their carbon emissions.
Daniel Mminele, who heads the presidential climate finance task team, says it was decided early on that SA needed to outline the scale of need over the next five years and how the IPG could support that — and that the plan needed to be owned and led by SA. And he is emphatic that it is not a wish list.
The team did extensive work and modelling to establish the pipelines of projects and financing that were out there in public and private sectors. It’s a plan supported by huge amounts of work and evidence. And it involved extensive consultation, with a range of experts as well as groups representing youth, municipalities, labour, business and other stakeholders.
All of this raises the second question: why did Ramaphosa put the plan forward as a document for consultation and engagement, when it had already been approved by the cabinet and endorsed by the IPG? There seemed something of an obsession with consultation at the presidential climate change commission session where he presented the plan on Friday. Hardly anyone criticised or questioned the details of the R1.5-trillion JET investment plan itself. Instead, there was all sorts of discussion and confusion about the status of the document, which is due to be formally launched by the leaders of all the international partner countries at COP27 in Egypt this week.
The government is great at policies and plans but none too good at implementation. This one will need political will, and political authority, to make it happen.
Putting consultation over outcome is an SA disease anyway, but in this case may reflect the discomfort of some stakeholders, including some in the climate commission itself, with the IPG and the JET. It’s not just the coal lobby but also the resolutely anti-Western bias of many older ANC leaders — not to mention the anti-capitalist bias of many older environmental activists, who must hate that the private sector has espoused the green transition with such enthusiasm and so much money.
Nobody seems to expect the government to consult when it goes to the international bond market to borrow billions of dollars, as it did earlier this year at rates and on conditions more onerous than those the international partners are offering. But climate finance raises a clamour.
On the other side of the table, however, the international partners worry about how welcome they really are, given SA’s stance on Ukraine, and about how committed SA’s government really is to implementing the ambitious decarbonisation plans it committed to at Glasgow last November. There must be at least some risk that some of them renege on their offer if SA doesn’t take its own plan seriously.
That makes it more puzzling that Ramaphosa seemed to dwell more on the negatives than the positives on Friday. He complained of how little of the $8.5bn was grants (R439m) as opposed to loans. He emphasised how small the sum was relative to the total need SA had identified for itself, and hinted that others were lining up to fund us.
Of course, the world’s rich countries need to do far more to help poorer countries. But Ramaphosa could and surely should have taken the opportunity to trumpet that the plan was a world first, with SA taking the lead to provide a model other fossil fuel dependent poor countries could follow. He could have highlighted that this was a pretty large sum of hard currency, at attractive rates, for a country that sorely needs foreign investment — and that the endorsement by the international partners will attract more funding to fast-track the energy transition.
Instead the message was muted. And the final big question is how much of this plan will translate into tangible outcomes. The government is great at policies and plans but none too good at implementation. This one will need political will, and political authority, to make it happen. SA will need to keep the partners on board to ensure the money flows. Fortunately some of the funding agreements are already done and dusted, particularly those with the World Bank-led funds and the French and German loans to the government.
Fortunately too, there are many more private sector renewable projects ready to follow South Deep’s Khanyisa (“light up” in isiZulu), and plenty of appetite to fund them. The government just has to allow that investment to happen, and ensure it uses IPG funding to enable a faster transition to cleaner energy, in a way that not only cushions the negative effects but also triggers positive growth and employment.
• Joffe is editor-at-large.
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