Located about a hundred miles west of Johannesburg in South Africa, the towering Komati Power Station, a coal-fired facility, has undergone a transformation from coal-based to clean energy generation. This transition, involving 150 MW of solar power, 70 MW of wind power, and 150 MW of storage batteries, represents a new narrative for the region, as it moves away from coal.

South Africa's move towards a clean energy shift has been supported by a unique financing approach. At the COP26 climate summit in 2021, a partnership formed between South Africa, European nations, and the US, offering $8.5 billion in loans and grants to facilitate a just transition to renewables. This concept, called Just Energy Transition Partnerships (JETPs), is intended to secure global finance for emerging economies transitioning from fossil fuels to renewables while ensuring that no communities are left behind.

Inspired by South Africa's success, Indonesia, Vietnam, and Senegal have also signed JETP agreements, with discussions ongoing for India. Collectively, around $100 billion is being earmarked for these partnerships. JETPs are a welcome development in the climate finance domain, addressing the stagnation of global climate finance efforts. The goal is to accelerate the adoption of renewable energy through enhanced funding and commitments.

South Africa entered into the JETP agreement with a well-defined plan for a just energy transition, encompassing sectors such as electricity, new energy vehicles, and green hydrogen. This plan focuses on shutting down coal plants, providing alternate employment opportunities for coal workers, and advancing renewable energy and the green economy.

However, the challenge lies in managing the socioeconomic aspects of the transition, considering the impact on coal workers and communities. The project aims not only to transform energy plants but also to reskill and redeploy coal workers. South Africa's significant unemployment rate and the economic and political complexities associated with coal exports add to the complexity of framing the project.

Although the initial JETP funding may not fully cover the transition, it acts as a signal to attract private investments. By leveraging public finance, private investment can be incentivized, making the prospects more appealing. The goal is to mitigate risks associated with transition and ensure a sustainable approach.

The success of JETPs remains to be seen, but these agreements represent a significant step towards international collaboration for climate action. The hope is that these partnerships will not only accelerate the shift towards renewable energy but also serve as models for other countries to follow suit.