Three years after the first deal was signed with South Africa, top officials from the UK and Germany have disclosed that they are hesitant to pursue additional Just Energy Transition Partnerships (JETPs) – an initiative launched at COP26 in 2021 to help developing countries leap frog fossil fuels, especially coal, to renewables. 

So far the multi-billion-dollar deals – which involve a package of government and private investment – have been launched for South Africa, Indonesia, Vietnam and Senegal, backed by several European countries, the European Union, the United States and Canada.

At a briefing with journalists at the COP29 climate talks in Baku last month, Jochen Flasbarth, state secretary in Germany’s Ministry for Economic Cooperation and Development, said his country and the other developed nations involved are “reluctant” to enter into more JETPs, emphasising that the current priority is to “make the existing JETPs work”.

Flasbarth said wealthy donor nations and multilateral development banks are working on what he described as a “country-led platform” approach for additional countries, which will incorporate a range of lessons from the JETPs.

These lessons, according to UK Special Representative on Climate Rachel Kyte, include establishing “country ownership” as “a key element”, offering support based on a country’s progress in its transition, and addressing “sensitivities around different stakeholders” on the ground. 

Kyte said there is no other way to do a clean energy transition except to put in place ambitious plans that are managed by the developing country in question with support from international partners.

Evolution of JETPs

With discussion surrounding the future of JETPs, links to similar initiatives with different names are being identified. Kyte said momentum is picking up around country platforms, whereby recipient governments present a “tailored, focused programme” with financing needs and projects that fit priorities defined by them. 

At COP29, for example, the government of Lesotho, Standard Chartered and Standard Bank announced a “country platform” to support the southern African nation’s ambitions to provide clean, affordable power for its people and the wider region.

The agreement – entitled “His Majesty King Letsie III Just Energy Transition Fund” – will finance the build-out of renewable energy to meet domestic demand in Lesotho and surplus generation for export to neighbouring South Africa.

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John Murton, a former British diplomat who was heavily involved in negotiating the initial JETPs, now advises Standard Chartered on sustainability. On LinkedIn, he said that through Lesotho’s new platform, partners can cooperate to identify barriers to private investment, support long-term policy and regulatory reform in the country, and discuss where lending on easy terms can be used most effectively.

This is not the first initiative that looks similar to a JETP. In October, Colombia – which could have been a country of interest for a JETP coal-to-clean deal – launched a $40-billion investment plan for its green energy transition and nature protection, targeting a shift away from fossil fuel production. Environment minister Susana Muhamad said it would mirror the JETPs.

Flasbarth also noted that Germany is cooperating with India on renewable energy and urban development to aid the South Asian country’s energy transition. But he said in a separate interview with Clean Energy Wire at COP29 that a JETP is no longer on the cards with India.

One key reason, according to analysts, is that India – the world’s most populous country with growing energy needs – is not interested in a deal, like the other JETPs, that would focus on phasing out coal, given that its coal production is projected to keep rising this decade, and it prefers to seek financing for clean energy expansion.

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Laura Sabogal Reyes, a senior policy advisor on development finance with E3G, said country platforms are “the evolution of JETPs”. But unlike their predecessors, they are unlikely to kick off with big top-line financing numbers, instead taking a “more mature” bottom-up approach that is less “flashy”, she said.

The idea, she added, is to meet countries where they are now on what they want to prioritise, their pipeline of projects, and their needs for technical support and policy reform, with donors coming in to contribute on that basis.

Slow progress

Sabogal Reyes said many expectations and promises behind the JETP concept “were not fully realised” within the expected time-frame, casting doubt on whether the initiative – which was praised as the “end of coal”  by the UK government in Glasgow – will continue.

The next step for JETPs is to “deliver [the promises] to the best way possible”, while taking into consideration “the good, the bad and the ugly” from the process and using that to develop new country platforms, she added.

Thandolwethu Lukuko, Climate Action Network’s director for South Africa, said the initial JETP pledges had been made with no established pipeline of projects, meaning that when an investment plan was later presented by the government receiving the money “it was then the partners saying, ‘well, we might not want to finance this’.” That led to negotiations that have lengthened the process, he added.

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Wale Shonibare, director for energy financial solutions, policy and regulation at the African Development Bank, said future country partnerships would need to evolve in response to the delays affecting the JETPs and the emphasis on debt in their financing mix which has prioritised soft loans over pure grants – something South Africa had not expected at the beginning.

Of the $8.5 billion originally pledged to South Africa, less than 3% was due to be delivered in the form of grants.

“It’s not just about what the donors are willing to give; it’s also about what the countries are willing to accept,” Shonibare said.

Since the launch of the deal, just one coal-fired plant – Komati – has been decommissioned and repurposed to produce renewable energy, a development made possible through World Bank support rather than under the JETP. The initiative, meanwhile, has provoked a backlash from the country’s labour union which called for its suspension.

A November update on the JETP, issued by the British government, said that, based on energy security considerations, power utility Eskom had decided to delay the planned decommissioning of three coal-fired power stations until 2030, and to front-load renewables repowering and community development at those sites ahead of the coal plant closures.

In Indonesia, there has been divergence with donors on financing terms and coal plants, with little progress recorded in retiring fossil fuel power stations. The Indonesian government also criticised the deal’s financing terms, as only 0.8% of the total was offered as grants.

Last month at the G20 summit in Brazil, President Prabowo Subianto announced that Indonesia will phase out coal-fired and all other fossil-fuel power plants by 2040 – but did not specify whether this would be part of the country’s JETP deal.

In Vietnam, the JETP has been criticised for a lack of transparency by a government partner organisation. The share of loans versus grants has been another bone of contention, with only 2% of the financial package offered as grants.

Senegal’s deal, announced in 2023, is still in the development stage, but Aida Diop, senior programme officer with the Natural Resource Governance Institute (NRGI), told Climate Home its successful implementation will depend on inclusive and transparent governance. Of the €2.5 billion ($2.6 billion) pledged, only about 6.6% is in grants. This, alongside delays in disbursing funds and the absence of a clear investment plan to date, “risks increasing public debt and slowing progress on renewable energy”, Diop said.

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A further problem with the JETPs has been scepticism over whether they are pursuing the people-centred approach that is regarded as fundamental to just transition. South Africa’s investment plan, for example, prioritised three sectors – electricity, new energy vehicles (NEVs) and green hydrogen – while skills development ranked low.

A 2023 investigation by Climate Home and Oxpeckers Investigative Environmental Journalism found that people in coal-reliant communities feared they would be unemployable in the near future as mines and power plants are decommissioned, and planned training programmes to reskill coal workers had yet to be rolled out at the local level.

Learning lessons

At COP29, Germany and Britain’s senior officials agreed there are lessons to be learned from how the JETPs have unfolded so far but said the experience has been a success nonetheless.

Flasbarth said South Africa’s JETP has “had its ups and downs, but in total it is a success story”.  Kyte agreed, saying she would not claim the initiative is “going as fast as everybody would like it to” but that the original idea behind the JETPs remains important – and is one that the UK is pursuing as a priority.

Addressing concerns over slow progress, the UK climate envoy – who has worked on energy access for many years – also said unlocking certain financial flows first requires reforms including to markets, policy and regulation – which take time. These reforms need to happen alongside investment to build out the grid for renewable power supplies, before any coal decommissioning can take place, Kyte added.

In the case of South Africa, Flasbarth said public funding from donors had helped the South African government reform the regulatory framework for its electricity sector, which had created “legal certainty, transparency and lowered the risk for investing”. That, in turn, has opened up opportunities for the private sector to invest in expanding renewables.

On the funding instruments used in the JETPs, Kyte said multiple sources of finance had been brought together, depending on countries’ differing needs – and of the $9.3 billion committed to South Africa, “over $700 million of that was grants”, in addition to concessional loans and investments. Flasbarth said Germany’s €1.8 billion ($1.9bn) share of that JETP had included “a substantial amount of grants, coming to roughly 20%”, while the rest was highly concessional loans from the KfW Development Bank.

Kyte added that there is a need to double down on the JETPs to deliver them effectively, and also to draw lessons from the model so that other countries that want something similar – no matter what formal label is attached to it – can build on that experience.

(Reporting by Vivian Chime; editing by Joe Lo and Megan Rowling)

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Why rich countries are “reluctant” on additional JETP coal-to-clean deals