JOHAN MARNEWICK | Jet-IP shows encouraging progress

The latest Just Energy Transition Implementation Plan (Jet-IP) report by the presidency makes encouraging reading.

It reflects hard work by the Jet project management unit and enormous goodwill from the foreign community — excluding the US — towards helping South Africa transition to a low-carbon, climate-resilient society.

The government’s multidepartmental task team has made good progress on fundraising. The two-year-old programme, approved by the cabinet in late 2023, had secured $13.73bn (R243bn) in pledges from international sources, mainly the UK, France and Germany, by end-September 2025.

That makes it clear that even though the US has withdrawn from the Paris Agreement and is cutting funding to organisations dedicated to combating climate change, the rest of the world is still taking action.

There is broad recognition by global funders that are extending grants and concessionary loans to South Africa that the energy transition for a developing economy such as this one will have to be slower than in the developed world.

The “just” component of Jet aims to ensure the shift from fossil fuels to cleaner sources of energy is fair, equitable and inclusive, protecting workers, communities and vulnerable groups from potentially negative economic impacts of the transition.

Stumbling blocks

Unfortunately, the latest Jet-IP progress report shows that only 40% of the secured funding has been allocated to projects. Even though there are several reasons for this, the report draws attention to two main contributing factors, both of which involve state-owned power utility Eskom.

The first is that, due to the financial assistance from its shareholder, the National Treasury placed a moratorium on Eskom raising further debt on its balance sheet. As a result, Eskom cannot access the concessionary loans to assist with the costs of closing its ageing coal-fired power stations.

Obviously, this is an unintended consequence of the conditions placed on the support provided to Eskom by the Treasury. However, the delay in closing those heavy carbon-emitting power sources is disappointing.

The second reason pertains to conflict about Eskom’s unbundling plans. Eskom has been trying to retain the National Transmission Company of SA (NTCSA) in the group.

The private sector has warned that keeping grid assets under the control of a company that also operates as a generator would raise potential conflicts of interest. It would also inhibit badly needed investment in the national transmission infrastructure, which is vital to bring more renewable energy projects online.

As long as the NTCSA stays within Eskom, which cannot itself afford to invest in transmission infrastructure, it also cannot raise the necessary funds.

In his recent state of the nation address, President Cyril Ramaphosa insisted that a fully independent state-owned entity would be established. It would have ownership and control of transmission assets and be responsible for operating the electricity market.

Role of the private sector

The Jet-IP progress report points out that the private sector is leading investments in renewable energy generation, though it is severely constrained by inadequate transmission grid capacity.

Apart from the headline renewable energy projects mentioned in the report, there is an even bigger move into green energy, as businesses such as mines, shopping centres, hotels and offices and private households have been installing solar panels at a pace.

That is happening regardless of the Jet programme, and perhaps only a small part of it is actually driven by just energy transition motives. While the motivation will vary from business to business and person to person, it is clear that by “going off grid”, businesses and citizens can maintain uninterrupted power at an affordable cost.

The JET is a well-intentioned plan with wide ambitions. But one of the biggest forces for the move into green energy in South Africa is self-interest. Challenges and inefficiencies in the public sector, combined with the fact that profit-driven technological advances in solar and wind power have made it cheaper than coal in the past decade, have prompted the private sector to make the switch — with positive consequences. This is particularly vital for large businesses that are big consumers of power. Using greener power technologies enables them to stay competitive.

For the same reasons these trends are not limited to South Africa but are in line with trends observed worldwide. The great example is the US state of Texas, which despite being known as a largely pro-Republican, oil-rich state, in 2025 generated more power from solar energy than from coal-powered stations.

According to Integrity Energy, in 2024 Texas generated more renewable power than any other US state, including California. Arguably, the drive to ever-more efficient ways of conducting business is having the unintended consequence of sourcing energy from newer, cleaner and greener electricity plants.

Partnering on investment will speed up Jet for SA

After two years of Jet-IP, the lesson seems to be that the public and private sectors need one another. The private sector has an appetite to invest in South Africa’s transmission infrastructure, but the amount needed is vast. Electricity & energy minister Kgosientsho Ramokgopa told the recent Africa Energy Indaba that more than R440bn is needed in the next 10 years to modernise and expand the transmission infrastructure.

This is a substantial amount of capital to mobilise, which is why it is so important to secure concessional funding from development finance institutions to enable the scale and speed of attracting capital into the sector. The grid will remain a public asset, so efficient public-private partnerships are critically needed.

We believe a truly just transition means a speedy enablement of investment into more efficient energy generation technologies and capacity. That will inevitably create a more competitive local economy and attract further investment that will lead to job creation and sustainable prosperity for more South Africans.

• Marnewick is head of fixed income private markets at Stanlib Asset Management.