South Africa’s Just Energy Transition Partnership (JETP) has helped mobilise international support for the country’s energy transition, but its first phase has also exposed the challenges of turning ambition into delivery. Understanding what has held implementation back, and what can be done differently, will be critical as the JETP moves into its next phase.
Financing gaps, debt risks, and delayed delivery
The JETP’s first phase exposed a large gap between South Africa’s transition needs and the finance available to meet them. The Just Energy Transition Investment Plan estimated that about USD 98 billion was needed between 2023 and 2027, while partners pledged only USD 9.3 billion in 2021, including around USD 713 million in grants. The challenge is not only the scale of finance, but also its terms and deployment, MDB lending often requires National Treasury guarantees, creating additional fiscal liabilities. South Africa’s financial sector cannot provide concessional finance at the scale needed, while international public finance can mobilise private investment but cannot fund the transition alone. The next phase of the JETP should therefore prioritise flexible, targeted instruments that address genuine financing gaps and accelerate low-carbon investments.
The Mpumalanga Municipal Utility Reform Programme illustrates another challenge in the JETP financing model: the gap between high-profile commitments and delivery on the ground. Although the JETP launched at COP26 in 2021, the African Development Bank’s USD 400 million facility, backed by a UK guarantee, was only approved in July 2026. This delay reflects the complexity of blended-finance deals involving multiple actors, guarantees and lengthy preparation requirements. The next phase should use the mechanisms and structures developed through the programme to speed up future approvals and delivery.
Trust cannot be assumed
The just transition should ultimately benefit people. Yet many workers and communities in coal-dependent regions experience it as uncertainty about their livelihoods. Congress of South African Trade Unions (COSATU) has argued that the JETP and Just Energy Transition Investment Plan (JETIP) do not sufficiently reflect affected workers’ and communities’ priorities, including consultation, job protection, social ownership, reskilling, and social protection. This highlights a blind spot of the first phase: while policy discussions focused on gigawatts, emissions reductions and investment volumes, affected workers and communities were concerned with more immediate questions about future employment and whether new opportunities would arrive before existing ones disappeared. Although the JETIP identifies localisation as a priority, there is limited evidence of progress on implementing the South African Renewable Energy Masterplan (SAREM) or defining investment needs for local renewable energy, grid, battery and related value chains.
Local government also faces significant challenges. Municipalities are central to delivering the transition, but many lack the necessary resources and capacity. The PCC’s Synthesis Report on the State of Readiness for the JET in Municipalities identified financial constraints, governance inefficiencies and capacity gaps in several municipalities assessed. For the transition to succeed, local governments therefore need stronger financial and operational support, alongside electricity distribution-sector reform.
Grid constraints remain the defining bottleneck
Grid infrastructure remains a major bottleneck, with transmission constraints limiting the connection of new renewable energy projects and slowing the pace of clean energy deployment. Load shedding has also shaped the political and practical context in which the JETP is being implemented, increasing pressure to prioritise short-term system reliability alongside longer-term decarbonisation goals. At the same time, key electricity sector reforms, including Eskom unbundling, the operationalisation of the National Transmission Company South Africa (NTCSA), and the development of a competitive wholesale electricity market, are progressing more slowly and with greater complexity than originally anticipated. These reforms are essential for attracting investment and integrating larger volumes of renewable energy into the power system.
Eskom has become central to the tension between energy security and JETP objectives. In 2026, Eskom confirmed delaying the closure, repowering or repurposing of several ageing coal stations, citing concerns about replacement capacity. This followed earlier coal-life extensions and environmental exemptions through 2030 and beyond. While these measures may have supported short-term reliability, that case has weakened as embedded renewables and private generation have reduced grid pressure and created space for Eskom to improve fleet maintenance and performance.
A shifting geopolitical environment
The JETP was launched during a period of strong international support for climate finance, but an increasingly volatile geopolitical environment has exposed the risks of relying on external partners. The United States’ withdrawal from South Africa’s JETP International Partners Group in 2025 highlighted how political changes can affect long-term financing commitments, especially with the role the US played as part of the initial IPG and on the G7. Combined with growing concerns over energy security from Russia’s war against Ukraine and now from the Straits, fiscal pressures in donor countries, and competing global priorities, this reinforces the importance of strong domestic ownership and diversified financing sources to ensure the transition remains resilient to external shocks.
This is Part 2 of a three-part series on South Africa’s Just Energy Transition Partnership (JETP). In the first article of this series, we highlighted the JETP’s early gains in policy planning, international support and commitment to a just transition. The final article will look at how lessons from the first phase can inform the next, accelerating delivery and preparing for future developments.
