The Just Energy Transition Partnership model is maturing, and it has immense potential as a financing framework, write Mafalda Duarte and Abhishek Bhaskar.
A better climate future is still within reach, but it is no secret that we are off course.
We face continued headwinds from the global pandemic as poverty rates and greenhouse gas emissions trend in the wrong direction. But amid these challenges lie opportunities for human ingenuity and innovation if we are willing to embrace them.
While climate action is far from where it needs to be, the stage is set for faster momentum and bolder solutions. Clean energy is more affordable than ever, and countries are courageously demonstrating readiness to embrace promising, yet untested, models of partnership.
One such model is what's come to be known as the country platform, which coalesces diverse partners behind investments that address challenging and even historically unprecedented climate objectives defined by a given developing country.
The Climate Investment Funds (CIF) has helped pioneer this model, working together with governments, multilateral development banks, philanthropies, and other institutions.
One such example is South Africa's Just Energy Transition Partnership, or JETP, which takes a model that CIF has perfected for 15 years and brings it to the next level.
The JETP is helping one of the world's most coal-dependent economies transition equitably and inclusively from coal to clean power with support from CIF's groundbreaking $2.5 billion Accelerating Coal Transition investment programme.
When it was announced at COP26, the JETP was hailed as a milestone in climate finance. It was and remains so today: never before had countries and partners joined forces in such a way to help raise and realize the climate ambitions of a single developing country.
Governments and partners pledged an initial package of $8.5 billion to help decarbonize the economy. The announcement later inspired other developing countries, including Indonesia and Vietnam, to raise their ambition even higher and ink similar deals.
In South Africa, the JETP's potential is immense. CIF's share of the JETP package alone could prevent approximately 71 million tonnes of carbon dioxide equivalent, equivalent to taking nearly 14 million gasoline-powered cars off the road for a year.
This is in a country where 87% of installed generation capacity comes from aging, high-emitting coal-fired power plants.
Achieving this goal requires significant finance, which the JETP pledges. But just as important, and I cannot stress this enough, is the JETP's promise of a political partnership that withstands the vagaries of political cycles. And crucially, the lessons it holds for similar partnerships around the world.
"The JETP is in its infancy, but it is already setting new baselines for comparable interventions in developing countries that promote cross-sector collaboration and are customized to individual country needs."
The JETP is in its infancy, but it is already setting new baselines for comparable interventions in developing countries that promote cross-sector collaboration and are customized to individual country needs.
Learning by doing and testing new approaches are essential drivers of climate action in unproven investment environments — and the JETP is an ideal vehicle for this purpose.
What have platforms like the JETP taught us so far?
First and foremost, country ownership is vital. Interventions big and small must be driven by the climate ambitions unique to, and defined by, the country involved. One size never fits all.
That means understanding what motivates relevant stakeholders and institutions, putting them in the driver's seat, and being intentional about empowering them to meet their own objectives.
It is also paramount to know which actors should have a seat at the table. One must engage key partners from government, civil society, and the private sector to better understand the landscape and diversity of stakeholders, and how best to elevate their voices throughout the process.
On top of domestic stakeholders, development finance institutions, the private sector, and philanthropic organizations all have a role to play.
That kind of engagement is impossible without effective communication and, even more critical, trust.
A just transition requires parties to establish and maintain confidence in one another. To that end, formal channels for addressing concerns go a long way in garnering support of national and local actors.
Success also depends on having the right financial and operational instruments in place. JETPs and similar partnerships require fit-for-purpose toolkits and financing commensurate with the challenge both in terms of scale and speed.
When it comes to JETPs, a strong measure of impact is accountability. Countries need to establish policies and structures to not only drive progress but monitor it. They must do so working closely with all stakeholders and leaving ample room for fine-tuning implementation and restructuring finance as operations progress.
The JETP model is maturing, and it has immense potential as a political partnership and a financing framework. But it is already proving its worth as a deep well of expertise and lessons for strengthening climate partnerships around the globe.
If knowledge is power, the JETP is an engine of progress.
Mafalda Duarte is the CEO of the Climate Investment Funds (CIF) and incoming Executive Director of the Green Climate Fund.
Abhishek Bhaskar leads the CIF Accelerating Coal Transition Investment Program along with its JETP engagement.