South Africa has identified more than R60 billion ($3.5 billion) of investments needed to help communities in the coal-mining Mpumalanga province as the industry gradually winds down, US Treasury Secretary Janet Yellen said as she announced an additional $45 million in grant support.
The investments form part of a R1.5 trillion government blueprint to reduce South Africa’s reliance on coal, which is currently used to generate more than 80% of its electricity.
A group of rich countries are backing that program, known as the Just Energy Transition Plan (JETP), with $8.5 billion in climate finance in the form of concessional loans, debt guarantees, and grants.
The US is providing more than $1 billion.
“It is the ‘just’ element of the transition I want to focus on,” Yellen said at a lunch with philanthropy groups in Johannesburg on Friday on the last leg of a three-nation Africa tour.
“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.”
South Africa is the first developing country to have signed a JETP with rich nations.
Indonesia, Vietnam, India, and Senegal are in talks to secure similar agreements to help reduce their greenhouse-gas emissions, while Colombia has indicated it’s interested.
South African Finance Minister Enoch Godongwana has complained that his nation’s financing includes a relatively small proportion of grants.
The government’s plans to reduce its use of coal have encountered strong opposition from mining communities and the politicians and labour unions that represent them.
South Africa has about 90,000 coal miners, and 14 of state power utility Eskom’s plants run on the fuel.
In addition to miners and power plant workers and their dependents, the coal industry supports the trucking industry and a host of other activities. Almost all the nation’s coal is mined in the eastern province of Mpumalanga.
Projects include supply chains for renewable energy, rehabilitating defunct coal mine sites so they can be used for other purposes, improving infrastructure and re-skilling workers, Yellen said.
She undertook to push private companies and philanthropic organisations to help provide financing.