Clean energy funding in limbo

• Mminele leaves amid uncertainty around SA’s investment plan

The head of the president’s climate finance task team, Daniel Mminele, has stepped down after his contract expired at the end of December, leaving question marks about the next steps for SA ’ s R1.5-trillion investment plan for a just energy transition at a time when international partners have been urging the government to fast track its implementation.

The news of Mminele’s departure comes after EU and US leaders recently called on SA to show swift and concrete action on the plan, which was launched on the eve of the COP27 climate summit in Egypt in November. The EU, US, France, Germany and UK together committed to provide $8.5bn of funding for the transition to renewable energy. And some of the countries have since upped the amount of grant funding they are willing to contribute.

However, SA has yet to provide the international partner group with a plan of action setting out how the plan is to be implemented, and through what structures.

The presidency hastened on Thursday to make it clear that the implementation plan is being finalised.

“We remain in constant discussion with the partner countries,” presidency spokesperson Vincent Magwenya said.

It is understood that Mminele, who led negotiations with the international partner group, had been expected to stay on for an interim period of three months to help with the implementation plan and hand over to a project team that would take it forward. However, the presidency offered him a new contract only belatedly and he was conspicuously absent during US treasury secretary Janet Yellen’s visit to SA in late January. This week stakeholders and members of his team were informed that he had stepped down.

“There’s an offer on the table for an extension of Mr Mminele’s contract to cover the balance of the extension period of three months,” Magwenya said on Thursday.

“The remaining contract staff in the presidential climate finance task team will work out the rest of their contract period.”

The Climate Investment Fund led by the World Bank is understood to have funded many of the salaries of the task team and of the secretariat that supported it, some of whose contracts have also yet to be renewed.

Magwenya said on Thursday

that additional donor funds had been mobilised “for an extended mandate period to support the implementation” of the investment plan.

The news of Mminele’s departure comes after the EU’s ambassador to SA, Sandra Kramer, told Business Day last month that the EU was trying to increase its grant funding because of the importance of getting the “just” aspect of the energy transition right.

“What we are looking for now is an implementation plan … European and US leaders called for SA to deliver an plan that the government will provide,” Kramer told Business Day.

Yellen also used her visit to emphasise the US’s commitment to the “just” part of the transition and to indicate that it could make more funds available. But she said that SA would need concrete action soon to keep up momentum on the partnership.

SA’s investment plan for the transition to renewable energy was the first of its kind globally, providing a precedent for other coal-dependent countries such as Indonesia, which announced a much larger partnership with international funders shortly after SA launched its plan.

There has been some confusion about the status of SA’s plan after President Cyril Ramaphosa promised at the launch that there would be further consultations on the document, raising questions about whether this was the final version and when that might materialise.

The presidential climate commission is due to lead a round of consultations with stakeholders, many of whom had already been consulted, in the next couple of months.

The just energy transition and the investment plan are controversial in government and the governing ANC alliance, given the continuing commitment to coal of leaders such as mineral resources & energy minister Gwede Mantashe.

The plan is also likely to have been put on the back burner after the COP27 summit when the ANC was busy with its conference in December and the government pre-occupied with the energy crisis.

With SA’s old coal-fired power stations reaching the end of their lives, and with an urgent need for new renewable energy to be brought on to the grid, the international financing would be a crucial catalyst.

Much of the $8.5bn in international money is set to go towards financing the strengthening of Eskom’s transmission infrastructure to enable more renewable power producers to connect to it, as well as repurposing old power stations.

MMINELE’S DEPARTURE COMES AFTER EU AND US LEADERS RECENTLY CALLED ON SA TO SHOW SWIFT AND CONCRETE ACTION