South Africa’s groups caution $8.5bn partnership announced at COP26 Climate Finance Deal

Climate and environmental justice groups cautiously welcome the $8.5 billion partnership announced at COP26, but demand transparency about the scope and conditions, and accountability by lenders, beneficiaries and the South African government.

The Life After Coal campaign, comprising environmental justice groups groundWork, Earthlife Africa, and Centre for Environmental Rights, cautiously welcomes the announcement at COP26 in Glasgow November 3, of a partnership between the governments of South Africa, the US, the UK, France, Germany and the EU to mobilise $8.5 billion (R131 billion) over the next 3-5 years to support the implementation of South Africa’s Just Transition.

The partnership sends a strong and important political message of both the acknowledgement by Northern countries of their climate debt, and their commitment to support South Africa’s Just Transition from coal.  It also affirms that South Africa is a country with the potential to transform its economy to be zero carbon and climate resilient through a Just Transition for workers and for affected communities.

“While this partnership is a step forward, it is a first step – South Africa’s need is much greater than the $8.5 billion proposed”, cautions groundWork’s Director Bobby Peek. “To achieve a Just Transition to a zero carbon economy, South Africa needs climate finance that is transformational. For Mpumalanga alone, at least $1bn is needed only for worker support and other direct Just Transition interventions,” says Peek.

“We require a lot more detail on the terms of the deal to establish whether this finance is of sufficient quality, and to determine the potential broader implications for South Africa,” says Centre for Environmental Rights Executive Director Melissa Fourie. “Some of our questions include:

How much of this amount is, in fact, new funding? Does the deal commit South Africa to new debt?

What are the terms of the deal, described as a “range of instruments, including grants and concessional finance”?[2] How much is grant funding, and how much is concessional finance? For concessional finance, described as “highly concessional” in the announcement, what is the nature of the concessionality? What is the “grant equivalent”[3] of the deal?

Does the deal provide for the establishment of a Just Transition Fund for workers, small, medium, and micro-enterprises, and coal communities? How much will be used for on-the-ground projects?