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The United States supports South Africa’s transition to cleaner energy and will help mobilize financing from the private sector to assist the country which is heavily dependent on coal, U.S. Secretary of the Treasury Janet Yellen said on Friday during a visit to South Africa.
Currently, coal is by far the major energy source for South Africa, accounting for around 80 percent of the country’s energy mix. The country is also the world’s fifth-largest coal exporter.
But South Africa is going through a major energy crisis with daily rolling power cuts, which cripple the economy, as state firm Eskom has failed to boost generation capacity to keep pace with growing demand in recent years.
The South African government has recently started to push for more renewable power generation.
The U.S., the UK, France, Germany, and the EU are mobilizing an initial $8.5 billion to catalyze the first phase of South Africa’s Just Energy Transition (JET) Investment Plan, as part of a long-term Just Energy Transition Partnership (JETP) signed in 2021.
“The financial package of $8.5 billion is a substantial down payment. Importantly, it is designed to mobilize additional money from the private sector and philanthropies, and I will meet with representatives from both groups later today,” Secretary Yellen said in a speech today.
“We fully recognize that transitioning the local economy and the economy of South Africa to clean energy will not be without challenges,” she added.
“But the investments that our governments and the private sector will make over the coming years in wind, solar, battery storage, and non-energy infrastructure will pay dividends in terms of well-paying jobs and a growing and cleaner economy.”
Under the just transition plan, South Africa will invest in job retraining and reskilling, cash payments to support displaced workers while they find new employment, and redevelopment of former coal mines and coal power plants as clean energy production sites and other productive uses.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.