Yellen pledges US support for just energy transition

● US Treasury secretary Janet Yellen had a broad taste of what South Africa has to offer this week: from load-shedding and optimism to energy transition delays.

“We did experience some load-shedding … in various places we’ve been, including hotels, and we’ve been spending a good deal of time discussing challenges … in the energy sector,” she said on Friday.

However, despite this crisis and corruption, there were many opportunities in the country, Yellen said, singling out US car manufacturer Ford’s business in Silverton, Pretoria, as an example of a business determined to grow here.

“The Ford plant has been operating in South Africa, celebrating 100 years, and has just invested another billion dollars to expand production of the Ford Ranger to make South Africa its base for selling not just here, but in many parts of the world.

“So … what I’ve heard is real enthusiasm and optimism about the opportunities that exist in South Africa, that there are very attractive investment opportunities.”

The energy crisis and slow plans to transition to a low-carbon economy dominated her meetings, with her tone one of irritation.

She said South Africa needed concrete action soon to keep up Just Energy Transition Partnership (JETP) momentum.

Yellen visited eMalahleni in Mpumalanga, the focal point of the coal belt, where US entities support reskilling initiatives to help mineworkers transition.

“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.

“In recognition of this importance, [US] President [Joe] Biden went beyond our initial JETP commitment to pledge an additional $45m [about R773.5m], focused specifically on the ‘just’ element of the transition. As the investment plan lays out though, much more will be needed.”

Yellen’s trip took place in the same week Russian foreign minister Sergey Lavrov visited Pretoria and is seen as a precursor to Biden’s Africa trip later this year.

There is a scramble for Africa’s attention as the world’s superpowers, including China, Russia and the US, look to tighten relations on the continent.

Yellen said South Africa should seize just transition opportunities.

“We all see the tremendous need and opportunity for reform of the energy sector in a way that lifts up impacted communities and strengthens sustainable economic growth. That is, in large part, why we joined international partners in creating the JETP with South Africa.”

The US is part of the International Partners Group of developed economies that in 2021 pledged $8.5bn, including about $1bn from US government agencies, to support this country’s move to a low-carbon economy and reduction of emissions.

Yellen met President Cyril Ramaphosa, finance minister Enoch Godongwana and mineral resources & energy minister Gwede Mantashe.

On Thursday, Godongwana praised Yellen’s commitment to South Africa’s energy transition, which he said came at a critical

The US is committed to the South African JETP and … a transition that is just for the communities and workers affected Janet Yellen

US Treasury secretary

stage with the country facing grinding energy shortages.

He said the US could ensure that financial support included a larger grant funding component. Africa’s “special needs and circumstances” needed to be recognised globally, especially due to the high number of resource-dependent economies on the continent.

Yellen said US investments in renewable energy would play a critical role in creating well-paying jobs and reliable clean energy sources that would power South Africa’s economic growth.

“The US is committed to the South African JETP and … a transition that is just for the communities and workers affected.”

Facilitating a transition that left no-one behind necessitated retraining and reskilling.

“It also requires the redevelopment of the former fossil fuel and power sites, and investments in infrastructure, to support the development of new industries and economic opportunities. And that is exactly what the US is committed to do.”

Yellen said there was “tremendous need and opportunity” for reform of the energy sector in a way that uplifted communities and strengthened sustainable economic growth.

“That is, in large part, why we joined international partners in creating the JETP with South Africa. The US is firmly committed to this engagement.”

The country pledged to mobilise more than $1bn in the next three to five years to achieve transition priorities South Africans identified in their JETP Investment Plan.

“South Africa’s Just Energy Transition Investment Plan is the result of a year’s work. It identifies some $98bn in necessary investments in clean energy and programming to support [it] over the long term, as well as investment in green hydrogen infrastructure and electric vehicle manufacturing.”