UK-African Partnerships and Just Energy Transitions: Finance and Investment Implications

Published on 21 August 2023

This is a contribution by the researchers on the Climate Finance for Equitable Transitions (CLiFT) project to the All Party Parliamentary Group for Africa in response to the Call for Evidence for a policy inquiry on the ‘UK-African Partnerships for Just Energy Transitions in Africa’.

Executive Summary

Finance is essential to achieving the decarbonisation goals set by the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement and for supporting countries’ just and equitable transition to low-carbon and climate-resilient economies. The Just Energy Transition Partnership (JETP) has emerged as one of the key initiatives for supporting developing countries, including African countries, in energy transition away from fossil fuels while addressing the social and economic dislocations which may arise from such transition.

In this contribution, we identify four concerns in the current JETP financing approach that could undermine the aforementioned climate and sustainable development objectives and fiscal alignment, and that potentially give rise to legal, regulatory, policy and governance risks beyond individual country plans under the JETP. We believe that aspects of the JETP financing approach and proposed financial instruments may also generate social and economic transition risks and may have broader implications for governance and policymaking on climate action and sustainable development.

Our four main concerns with the JETP initiative as a mechanism for coordinating financing for just energy transition in Africa are as follows:

1. Reliance on debt instruments and private finance to fund decarbonisation and economic transition plans;
2. Legal risks emerging from private investments in energy transition projects;
3. Social and economic transition and governance risks; and
4. Compatibility with multilateral climate commitments

We submit that despite public commitments to country ownership, the JETP initiative remains premised on an aid framework rather than as part of the multilateral climate regime and this design means that its strategic priorities and operational architecture will continue to be driven by the interests of developed countries, multilateral development banks and private financial institutions that constitute the ‘International Partners Group’ (IPG) for each JETP. This can lead to a loss of policy space in developing countries and can undermine the core principles of the multilateral climate regime and weaken climate action globally.
We based our assessment on our analysis of South Africa’s Just Energy Transition Investment Plan (JET-IP) and information emerging on the JETP process in Indonesia and Vietnam.

This contribution was submitted by:

• Professor Celine Tan, Professor of International Economic Law, Warwick Law School, University of Warwick, UK
• Dr Anil Yilmaz Vastardis, Senior Lecturer, Essex Law School. University of Essex, UK
• Dr Gamze Erdem Türkelli, Assistant Research Professor in Public International Law, Human Rights and Sustainable Development, Faculty of Law, University of Antwerp, Belgium

Authors