US Treasury Secretary lauds South Africa’s just energy transition

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United States Treasury Secretary Janet Yellen says South Africa’s Just Energy Transition Partnership represents the country’s bold first step towards expanding electricity access and reliability. 

Yellen’s comments on Thursday came as the country grappled with stage five load-shedding which Eskom said would be in place from Thursday morning until Sunday afternoon due to the breakdown of further generating units.

“This partnership represents the nation’s first step in creating a low-carbon and climate-resilient economy,” Yellen, flanked by South Africa’s Finance Minister Enoch Godongwana, told journalists in Pretoria at the start of the third part of her tour of Africa.

“The energy sector is pretty much South Africa’s economy and supports economic growth,” she added.

Under the Just Energy Transition Partnership, the United States, United Kingdom, France, Germany and the European Union pledged a combined initial commitment of $8.5 billion (about R145 billion) in support of South Africa’s decarbonisation efforts and to accelerate its move towards renewable energy. 

The country currently derives the bulk of its electricity from coal, via Eskom.

The financing will come through various mechanisms including grants, concessional loans, investments and risk-sharing instruments, including to mobilise the private sector.

Yellen said the partnership would also invest in jobs of growing industries “so that the transition is just and does not leave anyone behind”. 

Godongwana said he and the visiting US official would also discuss climate financing, how their countries could counter financial terrorism and how to resolve the sovereign debt crisis in Africa. These discussion points would form part of a meeting of the G20 group of major economies next month in New Delhi, India. 

Yellen has already been to Senegal where she discussed infrastructure projects, pandemic preparedness, democracy strengthening and anti-corruption partnerships. Next she travelled to Zambia where she said it was critically important that the country restructure its debt. Reuters reported that Zambia owes China almost $6 billion and the country had $17 billion in external debt at the end of 2021.