South Africa’s coal heartland is ill-prepared for the energy transition

September 26, 2023 Siyabonga Mtangana

South Africa’s main coal-producing province of Mpumalanga, the focus of the country’s US$8.5-billion Just Energy Transition Partnership, has received no government funding to help workers and communities find alternative livelihoods, a new study shows.

The province, which accounts for 83% of national coal production, will lose 48 500 jobs at power plants and the mines that feed them by 2030 due to closures, Krutham, a South Africa-focused research organisation, said in a report released on Tuesday.

Ultimately, as many as 120 000 jobs could be affected as companies such as trucking firms service the industry and studies to date have paid little attention to the coal-dependent informal economy, Krutham said. Initiatives to prepare workers and communities have to date been mainly donor funded.

“Provincial and local governments do not have a specific budget line that is dedicated to the Just Energy Transition initiatives,” Krutham researchers said in the report. “There is a clear indication that municipalities do not have a clear understanding of addressing the energy transition.”

South Africa and Mpumalanga are in focus as the $8.5-billion climate finance pact, known as the JETP, with some of the world’s richest nations — France, Germany, the US, the UK and EU — is a prototype for similar projects that are being pursued in Indonesia, Vietnam and Senegal. Key to those deals are how coal-dependent communities will be shielded from the impact of the transition.

“The lack of JET mainstreaming in public financing is one of the key barriers to unlocking financing at scale for JET initiatives,” Krutham said.

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Government should ring-fence funds for the transition, restore the creditworthiness of municipalities in Mpumalanga and create a fund within national treasury from which projects can be funded, Krutham said.