Yellen says South Africa needs action to maintain energy transition momentum

JOHANNESBURG : South Africa needs concrete action soon if it is to maintain momentum on an energy transition program backed by the United States and other countries, U.S. Treasury Secretary Janet Yellen said on Friday after visiting the coal mining region of Mpumalanga.

Yellen said the United States is resolute in its commitment to ensuring South Africa’s transition to renewable energy does not leave its workers behind, but appealed to philanthropists and private sector officials to step up their support as well.

“We must demonstrate quickly that these coal communities, which are already struggling with unemployment, poverty and the health impacts of coal mining and emissions, will not be left behind in the context of an energy shift that benefits other regions,” she told donor groups in Johannesburg, after meeting with local and provincial officials at a U.S.-funded facility in Emalahleni where women are being trained for jobs in renewable energy.

Yellen is wrapping up a three-country visit to Africa, with stops in Senegal and Zambia, that is aimed at deepening U.S. economic ties with the continent and countering China’s long dominance of trade and lending with many African nations.

She expressed hope that Washington’s focus on a just energy transition would underpin donor interest in backing the nearly $100 billion project aimed at supporting South Africa’s gradual phasing out of fossil fuels.

The United States, Britain, France, Germany and the European Union have backed South Africa’s “Just Energy Transition Partnership” with a combined $8.5 billion, which Yellen called a “substantial down payment” designed to mobilise additional money.

“An energy transition that is not just will simply not work. Equally important, however, is the imperative to seize the new opportunities that the transition will offer, keeping a worker-centered perspective in mind at all stages,” she said.

Justin Sylvester, program officer with the Ford Foundation, who participated in the meeting, said donors were looking for good monitoring of programs and representation of affected communities. The foundation worried about the impact of big layoffs in a country with a history of femicide and domestic violence, he told Reuters.

When speaking with reporters in Emalahleni, Yellen called anti-corruption a “critical” priority for South Africa, adding that U.S. officials discussed the issue in great detail with South African officials, and were looking to help Pretoria strengthen its rules and enforcement.

“It’s really critical to address corruption in order to have an effective government that South Africans can have confidence in, and it’s a critical part of the business environment,” she said.

NEEDS ARE URGENT

Yellen appealed to donors to extend support for the JETP program as “the transition is already at hand and the needs are urgent.”

South Africa’s plan calls for retraining and reskilling, cash payments to support displaced workers, redevelopment of former coal mines and coal power plants including as clean energy production sites and investment in roads, rail, ports, and digital infrastructure.

Yellen said the United States had earmarked $1 billion for the program and President Joe Biden pledged an additional $45 million in December to demonstrate America’s “firm” commitment to a just energy transition.

Owing to its reliance on coal for electricity, South Africa is the world’s 14th biggest carbon emitter, three places ahead of Britain, an economy seven and a half times the size, according to data from the Global Carbon Atlas.

But President Cyril Ramaphosa’s plan to transition towards renewable energy has divided the governing African National Congress (ANC). Union leaders allied to the party fear massive job losses in the coal belt that they doubt the renewables business will be able to plug.

The Treasury secretary had a “frank” exchange of views with both Ramaphosa and Energy Minister Gwede Mantashe – a vocal defender of South Africa’s coal mines and power stations – about the partnership, the U.S. ambassador to South Africa, Reuben Brigety, told reporters on Thursday.

They agreed on the need to transition to a low-carbon economy, but raised questions about how they could get there and on what timetable, he said.

Source : reuters