JustEnergyTransitionImplementationPlan2023–2027TableofContentsAbbreviationsandAcronyms10GlossaryofTerms14MessagefromPresidentCyrilRamaphosa16ExecutiveSummary19BackgroundandContext19EnablersoftheJETImplementationPlan21KeyFeaturesoftheSixJETImplementationPlanPortfolios23Chapter1:ScopeandObjectives27Chapter2:BriefOverviewoftheJETIP2023–202733Chapter3:2023Developments373.1Stakeholders’FeedbackontheJETIP383.2EnablingPolicyandRegulatoryReformsforaJustTransition403.3EskomDebtRelief433.4TheElectricitySupplyCrisis433.5TheSouthAfricanRenewableEnergyMasterplan443.6JETIPFinancingStatus202344Chapter4:ImplementingtheJETIP514.1Context524.2TheoryofChange544.3GovernanceandInstitutionalArrangements554.4JETProjects’Register584.5JETFundingPlatform584.6AdditionalJETPortfolios61Chapter5:Electricity695.1Context705.2ElectricityGeneration715.3ElectricityTransmission75JETImplementationPlan2023–202735.4ElectricityDistribution815.5Decommissioning,Repowering,andRepurposingofRetiringCoalPowerPlants825.6Planning,MonitoringandEvaluation87Chapter6:MpumalangaJustTransition936.1Context946.2Stakeholders’Feedback966.3Mpumalanga’sEconomicDiversificationOpportunity976.4ImplementationRoadmapforMpumalanga986.5PriorityJETInterventionsinMpumalanga1056.6OutcomesandIndicators1076.7Governance110Chapter7:NewEnergyVehicles1137.1Context1147.2Stakeholders’Feedback1167.3ManagingtheChange1197.4NEVJETPortfolio1397.5NEVJETGovernance146Chapter8:GreenHydrogen1698.1StakeholderConcerns1718.2Context1728.3PortfolioImplementation1818.4PortfolioGovernanceandInstitutionalArrangements200Chapter9:Skills2119.1Context2139.2MappingtheSkillFormationSysteminSouthAfrica2139.3JETSkillsImplementationPlan2199.4InterventionsandOutputs2269.5Indicators2404JETImplementationPlan2023–20279.6ManagingRisks243Chapter10:Municipalities24710.1Context24810.2Stakeholders’ConcernsandFeedback25210.3ImplementationPlan26610.4TheoryofChange26910.5SummaryofActivitiesandTimeframes27210.6Indicators27410.7RisksandDependencies276Chapter11:MonitoringandEvaluationSystemandRiskManagementFramework28111.1Monitoring,Evaluation,andLearningSystemApproachandProcess28311.2ComponentsoftheMonitoring,Evaluation,andLearningSystem28511.3RiskManagementFramework298JETImplementationPlan2023–20275ListofTablesTable1:JETIP2023–2027fundingrequirements35Table2:JETIP2023–2027financingrequirements(ZAR(USD)billions)45Table3:InternationalfinancingpledgedfortheJETIPasofSeptember202346Table4:SAREMpillarandcatalyticinterventions62Table5:InternationalPartnersGroup(IPG)pledgessuitableforREgeneration75Table6:Off-balancesheetfinancingmechanisms77Table7:IPGofferstotheJETIPsuitablefortransmissiongridinvestments79Table8:ProposedroadmapforscalingupinvestmentintransmissionusingJETIPfacilities80Table9:Funding(USD)andsourcesfortheACTIP84Table10:High-levelroadmapforimplementationoftheACTIP86Table11:Themonitoringandevaluation(M&E)frameworkforJETIPinvestmentsinelectricity90Table12:JETIPobjectivesalignedwithMpumalangaGreenEconomyDevelopmentPlanobjectives97Table13:ProposedinterimapproachtoM&EforMpumalangaJETImplementationPlan107Table14:Keyactivitiesandinstitutionalowners111Table15:Stakeholderconcerns116Table16:Supply-sideanddemand-siderequirements123Table17:Fundingrequirementsforsupply-siderequirementsofautomotiveandbatteryvaluechains(ZAR’million)from2023to2027/8125Table18:Summaryofchallenges,keyactions(outputs)andoutcomes,withtheassignmentofinstitutionalleads134Table19:Quantifiableoutcomemeasures2023–2027/8138Table20:ImpactofNEV’ssectorinterventions139Table21:ProposedNEVPortfolioandestimatedinvestmentrequired140Table22:Mobility,automotivesupplychain,andbatteryminerals142Table23:PublicTransportProgramme144Table24:Stakeholderconcernsandhowtheyareaddressed1716JETImplementationPlan2023–2027Table25:ProgressmadeinestablishingSouthAfrica’sGH2industry177Table26:SouthAfrica’spipelineof24projectsunderdevelopmentforexecutionintheshort-andmedium-term,withthefirstnineprojectsgrantedStrategicIntegratedProject(SIP)status179Table27:Overviewoftheproposedinstitutionalownersforactionstodeliveroutputtoovercomethechallenges192Table28:TheoryofChange224Table29:Activitiesneededtoestablishthethree-tierJETskillsecosystem229Table30:ActivitiesneededtoestablishSDZs232Table31:Activitiesneededfortheexpansionofskillsforallthreecorevaluechains236Table32:ActivitiesneededforJETcapacitydevelopmentforgovernmentandkeygovernmentinstitutions237Table33:Activitiesneededtobuildfoundationalskillsdevelopment239Table34:IndicatorsforJETskills240Table35:RiskidentificationandmanagementforJETskills243Table36:Keyactivitiesandinvestmentsrequiredtodeliverenergytransitionsatmunicipallevel251Table37:Stakeholderconcernsandhowtheseareaddressed252Table38:SummaryofproposedactivitiesundertheMunicipalImplementationPlan272Table39:MunicipalJETIPimpact,objectives,andindicators274Table40:Riskdescription,impacts,andmitigationplans276Table41:IndicatorstobetrackedforJETIPoverall288JETImplementationPlan2023–20277ListofFiguresFigure1:JETImplementationPlangovernanceandinstitutionalarchitecture57Figure2:JETFundingPlatform59Figure3:2023SouthAfricanRenewableEnergyGridSurvey72Figure4:TheoryofChange–Electricity88Figure5:ImplementationneedstomeetMpumalanga’sJET98Figure6:Mpumalangaimplementationapproach100Figure7:TheoryofChange–MpumalangaJT102Figure8:MpumalangaJETimplementation:Governanceandinstitutionalarrangements110Figure9:TheoryofChange–NEVs120Figure10:Fivedimensionstoarticulateanactionableandmeasurableroadmap122Figure11:Sixinter-dependenciesthataffecttheNEVtransition123Figure12:Fundingrequirementsfordemand-sidepublictransportandmobilityabatementprogrammes(ZAR’million)126Figure13:ProposedJETNEVCouncil147Figure14:Componentsofup-scalinge-mobilityinSA’spublictransportsector159Figure15:GH2applicationandforecastgrowthfortheSouthAfricanGH2productforlocalandexportconsumption174Figure16:GH2candriveindustrialisationacrossfourcoresectors(RE,mining,agriculture,andbeneficiation)andthreesupportsectors(transport,manufacturing,andconstruction)175Figure17:Illustrativeequity,anddebtfundingsourcesthroughoutaGH2projectlifecycle183Figure18:TheseveninterdependentchallengesthatSouthAfrica’sGH2industrymustovercome190Figure19:Illustrativeshort-termdashboard(2024–2025)tomeasurecapacityandsystemsoutcomes196Figure20:Illustrativemedium-termdashboard(2026–2028)tomeasureperformanceoutcomes197Figure21:GH2implementationroadmaptoachievetheshort-andmedium-termoutcomes198Figure22:Illustrativeimpactdashboardtomeasurethelong-term(2035)impactagainsttheoverarchingvision1998JETImplementationPlan2023–2027Figure23:GH2JETgovernanceandinstitutionalarrangements201Figure24:SouthAfrica’sskillsformationsystem214Figure25:Aspectsofskills220Figure26:JETSkillsEcosystem:Co-ordinatedapproachtoJETskillsdevelopment228Figure27:SkillsDevelopmentZonesrole231Figure28:TheoryofChange–Skills244Figure29:TheoryofChange–Municipalities270Figure30:TheoryofChange–PMU286JETImplementationPlan2023–20279AbbreviationsandAcronymsACTIPAcceleratedCoalTransitionCHIETAChemicalIndustriesEducation&InvestmentPlanTrainingAuthorityAfDBCIFACTIPAFDAfricanDevelopmentBankClimateInvestmentFundAGOACIFAcceleratingCoalTransitionFrenchDevelopmentAgencyCISInvestmentPlanAIDCECCMAfricanGrowthandOpportunityCODClimateInvestmentFundsAISActCOGTAAITFCountryInvestmentStrategyAutomotiveIndustryDevelopmentCOPAMEUCentreEasternCapeCPPComponentManufacturerCSPAPDPAutomotiveInvestmentSchemeCSIRCommercialOperationDateATRAutomotiveIndustryTransformationDBEDepartmentofCooperativeB2BFundGovernanceandTraditionalAffairsB2GDBSAB-BBEEAssociationofMunicipalElectricityConferenceofthePartiesUtilitiesDDMPBESIPPPPCaptivePowerPlantAutomotiveProductionDevexBEVDevelopmentProgrammeDFCCitiesSupportProgrammeBIIDFFEAnnualTrainingReportCouncilforScientificandIndustrialBMZDFIResearchBusiness-to-BusinessDGBOODHET(National)DepartmentofBasicBOOTBusiness-to-GovernmentEducationDIRCOBOTBroad-BasedBlackEconomicDevelopmentBankofSouthernBUSAEmpowermentDMREAfricaCAPEXCBAMBatteryEnergyStorageDELDistributionDemandManagementIndependentPowerProducersProgrammeCBDProcurementProgrammeDoTCfDDPEDevelopmentExpenditureCHEBatteryElectricVehicleDevelopmentFinanceCorporationBritishInternationalInvestmentDepartmentofForestry,FisheriesGermanFederalMinistryforandEnvironmentEconomicCooperationandDevelopmentDevelopmentFinanceInstitutionBuildOwnOperateDirectorGeneralBuildOwnOperateTransferDepartmentofHigherEducationandTrainingBuildOperateTransferDepartmentofInternationalBusinessUnitySouthAfricaRelationsandCooperationCapitalExpenditureDepartmentofMineralResourcesandEnergyCarbonBorderAdjustmentMechanismDepartmentofEmploymentandLabourCentralBusinessDistrictDepartmentofTransportContractforDifferenceDepartmentofPublicEnterprisesCouncilonHigherEducation10JETImplementationPlan2023–2027DPMEDepartmentofPlanning,GABSGoldenArrowBusServiceMonitoringandEvaluationGDPGrossDomesticProductDPWIGEFGlobalEnvironmentFacilityDepartmentofPublicWorksandGH2GreenHydrogenDRIInfrastructureGreenHydrogenCommercialisationDSBDGHCSStrategyDirectReducedIronGreenhouseGasDSIGHGHydrogènedeFranceDepartmentofSmallBusinessHDFHigherEducationInstitutionDSMDevelopmentHEIHumanResourceDevelopmentDTICHRDHumanResourceDevelopmentDepartmentofScienceandHRDCCouncilEBBInnovationHydrogenRefuellingStationEEHRSHelmholtz-ZentrumBerlinDemand-SideMeteringHZBInternationalBankforEEPBIPIBRDReconstructionandDevelopmentDepartmentofTrade,IndustryandInternalCombustionEngineEIBCompetitionICEIndustrialDevelopmentCorporationERAIDCIndustrialDevelopmentZoneERSEnergyBounceBackIDZInternationalFinanceCorporationESCOIFCInternationalFinancialReportingESIPPPPEnergyEfficiencyIFRSStandardsInternalCombustionEngineVehicleEUEnergyEfficiencyinPublicICEVInternationalLabourOrganizationEWSETABuildingsandInfrastructureILOInter-MinisterialCommitteeProgrammeIMCIntegratedNationalElectrificationEXCOProgrammeEVEuropeanInvestmentBankINEPInternationalPartnersGroupIsondoPreciousMetalsFBEElectricityRegulationActIPGIndependentPowerProducerFCIPMIndependentPowerTransmissionEnergyResilienceSchemeIPPInflationReductionRateFCEVIPTIntegratedResourcesPlanFEEDEnergyServiceCompanyIRAIncomeTaxActIRPIntegratedUrbanDevelopmentFDIEnergyStorageIndependentPowerITAGrantFIDProducerProcurementProgrammeIUDGJustEnergyTransitionFraunhoferIKTSEuropeanUnionJETFTAFTEEnergyandWaterSectorEducationandTrainingAuthorityExecutiveCommitteeElectricVehicleFreeBasicElectricityFinancialCloseFuelCellElectricVehiclesFrontEndEngineeringDesignForeignDirectInvestmentFinalInvestmentDecisionFraunhoferInstituteforCeramicTechnologiesandSystemsFreeTradeAgreementFull-TimeEquivalentJETImplementationPlan2023–202711JETIPJustEnergyTransitionInvestmentNERSANationalEnergyRegulatorofSouthPlanAfricaJETPJustEnergyTransitionPartnershipNEVNewEnergyVehicleJETPMUJETProjectManagementUnitNGONon-GovernmentalOrganisationJustTransitionNMTNon-MotorisedTransportJTJointVentureNOPFNationalOccupationalPathwaysJVKarlsruherInstituteofTechnologyFrameworkKITLevelizedCostofHydrogenNQFNationalQualificationsFrameworkLCOHLightMotorVehicleNRCSNationalRegulatorforCompulsoryLCVLightDeliveryVehicleSpecificationsLDVLabourMarketIntelligenceNRFNationalResearchFoundationLMIMonitoringandEvaluationNSANationalSkillsAuthorityM&EMinibusTaxisNSDPNationalSkillsDevelopmentPlanMBTMunicipalCouncilNSFNationalSkillsFundMCMultilateralDevelopmentBankNSFASNationalStudentFinancialAidMDBMembraneElectrodeAssemblySchemeMEAMonitoring,Evaluation,andNTNationalTreasuryMELLearningNTSCANationalTransmissionCompanyofMunicipalFinanceManagementSouthAfricaMFMAActNo.56of2003OEMOriginalEquipmentManufacturersMpumalangaGreenClusterAgencyOFOOrganisingFrameworkforMGCAManganeseMetalCompanyOccupationsMMCMemorandumofUnderstandingOPEXOperationalExpenditureMOUMineralandPetroleumResourcesPBLPolicy-BasedLoansMPRDADevelopmentActPCCPresidentialClimateCommissionMiningQualificationsAuthorityPICPublicInvestmentCorporationMQAMunicipalSystemsActPrivateInfrastructureDevelopmentMSAMasterSkillsPlanPIDGGroupMSPMedium-TermBudgetPolicyProvincialGovernmentMTBPSStatementPGPlatinumGroupMetalMegaTonnesPerAnnumPGMProfessionalLearningCommunitymtpaMedium-TermRevenueandPLCProjectsManagementOfficeMTREFExpenditureFrameworkPMOProjectManagementUnitNationalAssociationofPMUPublicTransportNetworkGrantNAACAMAutomotiveComponentandAlliedPTNGProofofConceptManufacturersPOCPowerPurchaseAgreementNAAMSANationalAssociationofPPAPublic-PrivatePartnershipManufacturersofSouthAfricaPPPPost-SchoolEducationandTrainingNAMBNationalArtisanModerationBodyPSETPublicServiceSectorEducationNDCNationallyDeterminedContributionPSETAandTrainingAuthorityNationalEnergyCrisisCommitteeNECOM12JETImplementationPlan2023–2027PtXPower-to-XSETASectorEducationandTrainingPVAuthorityQCTOPhotovoltaicsSEZSpecialEconomicZonesSIPStrategicIntegratedProjectR&DQualityCouncilforTradesandSMESmallandMediumEnterpriseREOccupationsSMMESmall,MediumandMicroEnterpriseREDZResearchandDevelopmentSOCState-OwnedCompanySOEState-OwnedEnterpriseRFPRenewableEnergySPVSpecialPurposeVehicleREIPPPPSSEGSmall-ScaleEmbeddedGenerationRenewableEnergyDevelopmentSSPSectorSkillsPlanRMBZoneTechnicalAssistanceROITATobeConfirmedRPLRequestforProposalsTBCTobeDecidedSABSTBDTotalCostofOwnershipSAFRenewableIndependentPowerTCOTransmissionDevelopmentPlanSAIAMCProducerProcurementProgrammeTDPTrustFundCommitteeTFCTechnologyInnovationAgencySAICERandMerchantBankTIATransnetNationalPortsAuthorityTNPATrade-RelatedInvestmentMeasuresSAIVCETReturnonInvestmentTRIMSTransmissionServiceAgreementTSATechnicalandVocationalEducationSALGARecognitionofPriorLearningTVETandTrainingTransmissionSANBISouthAfricanBureauofStandardsTxUniversityofCapeTownUCTUnitedKingdomSANEASustainableAviationFuelUnitedNationsFrameworkUKConventiononClimateChangeSANEDISouthAfricanInstituteforUNFCCCUnitedStatesofAmericaAdvancedMaterialsChemistryUnitedStatesDollarSANRALUSAUniversityoftheWesternCapeSouthAfricanInstitutionofCivilUSDValueChainSAPVIAEngineeringUWCWorldBankUniversityofWitwatersrandSAQASouthAfricanInstituteforVCWorkplaceSkillsPlanVocationalandContinuingWBX-to-PowerSAREMEducationandTrainingWITSSouthAfricanRandWSPSAWEASouthAfricanLocalGovernmentXtPAssociationZARSDSDZSouthAfricanNationalBiodiversityInstituteSouthAfricanNationalEnergyAssociationSouthAfricanNationalEnergyDevelopmentUnitSouthAfrica’sNationalRoadNetworkSouthAfricanPhotovoltaicIndustryAssociationSouthAfricanQualificationsAuthoritySouthAfricanRenewableEnergyMasterplanSouthAfricanWindEnergyAssociationSkillsDevelopmentSkillsDevelopmentZoneJETImplementationPlan2023–202713GlossaryofTermsAdaptationInhumansystems,theprocessofadjustmenttoactualorexpectedclimateanditseffects,tomoderateharmorexploitbeneficialopportunities.Innaturalsystems,theprocessofadjustmenttoactualclimateanditseffects;humaninterventionmayfacilitateadjustmenttoexpectedclimateanditseffects.BeneficiationThetransformationofaprimarymaterial(producedbyminingandextractionprocesses)toamorefinishedproductwhichhasahighervalue.BlendedfinanceStrategicuseofdevelopmentfinanceandphilanthropicfundstomobiliseprivatecapitalflowsatscale,bycombininginvestorswithdifferentfinancialreturnexpectations–fromconcessionaltomarketrates–toaccessgreaterlevelsofcapitalthanonastandalonebasis.CarbonintensityTheamountofCO2emittedperunitofanotherindicatorassociateddirectlyorindirectlywithCO2emittingactivities.ThecarbonintensityofelectricityisthemassofCO2emittedperunitofelectricitygeneratedbyaplantorbytheelectricitysystem.ThecarbonintensityoftheeconomyisthemassofCO2emittedperunitofeconomicoutput.ConcessionalBelowmarketratefinanceprovidedbymajorfinancialinstitutions,suchasdevelopmentfinancebanksandmultilateralfunds,todevelopingcountriestoacceleratedevelopmentobjectives.DecommissioningAgroupofoperationsthatremediate,dismantle,andremovethestructuresandcomponentsofapowerstationattheendofitsworkinglife.DecarbonisationHumanactionstoreducecarbondioxideemissionsfromhumanactivities;inpractice,involvingatransitionfromenergyandothersocietalsystemswhichemitCO2,tothosewhichdonot,overthemedium-tolong-term.DistributedGenerationassetsthatarelocatedclosetotheparticularloadthatitisintendedtogenerationserve.General,butnon-exclusive,characteristicsofthesegenerationassetsinclude:anoperatingstrategythatsupportstheservedload;andinterconnectiontoadistributionorsub-transmissionsystem.EnergypovertyTheabsenceofsufficientchoiceinaccessingadequate,affordable,reliable,highquality,safe,andenvironmentallybenignenergyservicestosupporteconomicandhumandevelopment.EnergysecurityTheuninterruptedavailabilityofenergysourcesataffordableprices.GreenHydrogenHydrogenproducedbysplittingwaterintohydrogenandoxygenusingrenewableelectricity.InstalledcapacityThemaximumratedoutputofinstalledelectricitygeneratingcapacity.14JETImplementationPlan2023–2027JustTransition“AJustTransitionaimstoachieveaqualitylifeforallSouthAfricansinthecontextofincreasingtheabilitytoadapttotheadverseimpactsofclimate,fosteringclimateresilience,andreachingnetzerogreenhousegas(GHG)emissionsby2050inlinewithbestavailablescience.AJustTransitioncontributestothegoalsofdecentworkforall,socialinclusion,andtheeradicationofpoverty.AJustTransitionputspeopleatthecentreofdecisionmaking,especiallythosemostimpacted–thepoor,youth,women,peoplewithdisabilities–empoweringandequippingthemfortheopportunitiesofthefuture.AJustTransitionbuildstheresilienceoftheeconomyandpeoplethroughaffordable,decentralised,diverselyownedrenewablesystems;conservationofnaturalresources,equitableaccessofwaterresources;anenvironmentthatisnotharmfultoone’shealthandwell-being;andsustainable,equitable,inclusiveland-useforall,especiallyforthemostvulnerable.”Equitablydistributingthecostsandbenefitsofclimateaction.MitigationAhumaninterventiontoreduceemissionsoforenhancetheabsorptionbysinksofGHG.NetzeroConditioninwhichmetric-weightedanthropogenicGHGemissionsarebalancedbymetric-weightedanthropogenicGHGremovalsoveraspecifiedperiod.Ifthetermisusedtorefertonon-CO2GHGaswell,thenthequantificationofnetzeroGHGemissionsdependsontheGHGemissionmetricchosentocompareemissionsandremovalsofdifferentgases,aswellasthetimehorizonchosenforthatmetric.ReadinessThestateofbeingfullypreparedforanactiontotakeplace.IntheJETImplementationPlan,readinessforaproposedcapitalprojectreferstotheadvancedstageoftechnicalfeasibilitystudyapprovalbytheimplementinginstitutionjustpriortoaninvestmentdecisionbyitsrelevantgoverningbody.Readinessforanoperationalprojectreferstotheimplementinginstitution’scommittedmanagementcapacitytoexecute.RepoweringThereplacementofgeneratingcapacitywhichhasreachedtheendofitslifewithnewgeneratingcapacityonthesamesiteandusingthesamegridinfrastructureandon-siteresources,asappropriate.TechnicalTheprocessofprovidingtargetedandexpertsupportfordevelopmentpurposes.assistanceTransmissionThemovementortransferofelectricenergyoveraninter-connectedgroupoflinesand(electricity)associatedequipmentbetweenpointsofsupplyandpointsatwhichitistransformedfordeliverytoconsumersorisdeliveredtootherelectricsystems.Transmissionisconsideredtoendwhentheenergyistransformedfordistributiontotheconsumer.TransmissionAnentityentrustedwithtransportingenergyintheformofnaturalgasorelectricalpowersystemoperatoronanationalorregionallevel,usingfixedinfrastructure.UnbundlingSeparationofthetransmission,generation,anddistributionfunctionsofthepublicutility.(Eskom)Utility-scaleAfacility,normally1MWorlarger,thatgeneratespowerandfeedsitintolocalpowergrids.WheelingAnagreementbetweengenerators,consumers,andtheowners/operatorsoftherelevantagreementtransmissionanddistributionsystemstotransmitenergyfromageneratortoanend-userlocatedinanotherareathroughtheuseofexistingdistributionortransmissionnetworks.JETImplementationPlan2023–202715MessagefromPresidentCyrilRamaphosaOurworldfacesanexistentialclimatecrisis.Allnationshavearesponsibilitytotakeboldmeasurestoconfrontthisthreatthroughactionsthatareappropriatetoourdevelopmentpaths.Thecausesofglobalwarmingarewellknown.Itsimpactisbeingfeltnow,particularlybypoorandmarginalisedcommunitiesthataremostvulnerabletofloods,drought,extremeheat,andfoodinsecurity.Developingeconomycountriesarecallingonthehistoricandcontinuingpollutersoftheworldtomeetthefinancialcommitmentsneededtoenableallcountriestorapidlyreducegreenhousegasemissions,provideequitableaccesstorenewablesourcesofenergy,andbuildresiliencetotheeffectsofclimatechange.SouthAfrica’sNationallyDeterminedContributiontotheglobaleffort,compatiblewiththeParisAccord,wassignedin2021,contingentonsecuringfinancialsupportfromdevelopedeconomycountries.Tothisend,theworld’sfirstJustEnergyTransitionPartnershipwasforged,withinitialfundingcommittedbyourinternationalpartners.In2022,SouthAfricaproduceditsJustEnergyTransitionInvestmentPlan2023–2027,settingoutthescaleandscopeofinvestmentthatisneededtomeetourambitiousclimatetargets.Togivepracticaleffecttoachievingtheseambitions,CabinethasnowapprovedthisJETImplementationPlan,inwhichawiderangeofstakeholdersingovernment,business,labour,civilsociety,andinternationalorganisationsareplayingcrucialrolesinground-breakingenergytransitioninitiatives.TheJETImplementationPlan,whichfocusesonactionsthatarespecifictotheInvestmentPlan2023–2027,isdistinctfrom,butanimportantcomplementto,theIntegratedResourcePlan(IRP),whichsetsoutthecountry’sfutureenergymixandpolicylandscape.16JETImplementationPlan2023–2027SouthAfrica’sambitiouscommitmentwillbeimplementedinaccordancewithourdomestictransitionplans,whichincludesdealingwithourcurrentenergycrisis,andinsupportofourforemosttaskofreducingpoverty,unemployment,andinequality.Ourcountryisendowedwithabundantrenewableenergyresourcesandtheskillsandcapabilitiesneededtoplayaleadingroleinthegreeneconomyofthefuture.TheJETImplementationPlanoutlinesaclearpathtoharnessingthisopportunityforenergysecurity,economicgrowth,andjobcreation.TheJETImplementationPlanreaffirmsthecriticalroleofthestate.Amongothers,government’staskistoenableandfacilitatethemobilisationofappropriatefinancefortheJETImplementationPlanfromtheJETpartnersandothersources.Whileweareconfidentthattheprivatesectorwillseizetheopportunitiesforinvestment,higherlevelsofinternationalgrantfundingwillbeneededtoensurethatSouthAfrica’senergytransitionisjustandthatitcreatesalternativesourcesofhouseholdincomeforthosewhosecurrentlivelihoodsaretiedtofossilfuels.ThepaceofSouthAfrica’senergytransitionisthusdirectlydependentonwhatoursocietyandeconomycanafford.WehavesoughttoensurethatthereisbroadconsultationofthisplanthroughthePresidentialClimateCommission.WehighlyvaluetheongoingcontributionoftheCommissionandthesupportofinternationaldevelopmentpartnerstoSouthAfrica’stransition.IamconfidentthatSouthAfrica’sJETImplementationPlanwillsharpenourfocusonachievingtheoutcomesthattrulymatter,forasustainablefuturethatcanbesharedbyall.November2023.JETImplementationPlan2023–20271718JETImplementationPlan2023–2027ExecutiveSummaryTheJETImplementationPlanisaroadmapthatenablesSouthAfricatotaketargetedstridestowardsmeetingitsdecarbonisationcommitmentsinamannerthatdeliversjustoutcomesforthoseaffectedbytheenergytransitionandthatcontributestoinclusiveeconomicgrowth,energysecurity,andemploymentatapace,scale,andcostthatisconsistentwiththecountry’ssocio-economicdevelopmentpath,needs,andaffordability.TheJETImplementationPlandefinesshort-andmedium-termoutcomesinsixdefinedPortfoliosanddesignateskeyinstitutionstoleadtheidentifiedareasofthework.Theroleoftheseinstitutionsistoco-createsolutionswithstakeholdersinspecifiedplanningworkstreams,alignandprepareprogrammesandprojects,mobilisefinancing,driveperformance,andmonitorresults.Implementationisaniterativeprocessandtheplanswillevolveastheworkgainsmomentum.GovernmentleadstheJETasregulator,enabler,andfacilitatortounlockprivatesectorinvestmentandinternationalfinancingforthecountry’senergytransition.ThesixJETPortfoliosare:Electricity;MpumalangaJustTransition;NewEnergyVehicles(NEVs);GreenHydrogen(GH2);Skills;andMunicipalities.ThreefurtherPortfolioswillbeaddedforJETfinancingsupportin2024:SouthAfricanRenewableEnergyMasterplan;EnergyEfficiency;andRoad-to-Rail.BackgroundandContextAtthelaunchoftheJETIP2023–2027hostedbythePresidentialClimateCommission(PCC)on4November2022,PresidentCyrilRamaphosaaskedthePCCtoconductpublicconsultationsontheJETInvestmentPlan(JETIP).ThePresidentthenhandedtheJETIPtotheHeadsofGovernmentoftheInternationalPartnersGroup(IPG)attheUnitedNationsFrameworkConventiononClimateChange(UNFCCC)CongressoftheParties(COP27)inEgypton8November2022,andalsotableditattheG20summitinIndonesia.InJanuary2023,thePresidencyestablishedtheJETProjectManagementUnit(PMU)todrivetheJETIPimplementationandpreparetheJETImplementationPlan.TheJETImplementationPlangiveseffecttotheoutcomesofthePCC’sextensive2023stakeholderengagementswithorganisedlabour,civilsociety,youthorganisations,business,JETImplementationPlan2023–202719government,andfaith-basedorganisationsandprovidesclarityastohowtheJETIPwillberealised.SouthAfrica’sJETIPsetsoutthescaleofinvestmentneeded(ZAR1.5trillion)overfiveyearsforthecountry’sJustTransitiontoalow-carbonandclimate-resilienteconomyinlinewithitsupdatedNationallyDeterminedContribution(NDC)whichwaslodgedwiththeUNFCCCin2021.AtCOP26in2021,fiveinternationalpartnerspledgedUSD8.5billion(aboutZAR148.75billion)tosupportSouthAfrica’sJustEnergyTransitionthroughacombinationofconcessionalloans,commercialdebtandequity,andgrants.During2023,internationalpledgestotheJETIPgrewtoUSD11.6billion(aboutZAR198.2billion),andtheSouthAfricanprivatesector’sinvestmentinrenewableenergygenerationisnowtakingrootatscale,followinggovernment’ssignificantelectricitysectorreforms.ThefirstyearoftheJETIP2023–2027implementationandthepreparationofthisJETImplementationPlanhasbeeninformedbythefollowingimportantdevelopmentsin2023:„FeedbackfromstakeholdersduringthePCCconsultationsontheJETIP„Policyandregulatoryreforms„Eskomdebtrelief„Electricitysupplycrisis„Fiscalconstraints„SouthAfricanRenewableEnergyMasterplan(SAREM)„StatusofJETIPfinancing.ThesedevelopmentshaveresultedinaJETImplementationPlanthatdoesthefollowing:„ConfirmsSouthAfrica’sresolvetomanagetheJETatapace,scale,andcostthatisconsistentwiththecountry’ssocio-economicdevelopmentpath,needs,andaffordability„ReaffirmsthattheJustTransition–incorporatingdistributive,restorative,andproceduraljustice–isatthecentreofSouthAfrica’stransitiontoalowcarboneconomy„Placesco-creationbystakeholdersatthecentreofJETPortfolio-specificplanningforprogrammesandprojects„CapacitatesleadinstitutionstodriveeachPortfolio,workingcollaborativelywithmulti-stakeholderstructures„Seekstomaximisedecarbonisationandjusttransitioninvestmentsbytheprivatesectorarisingfromelectricitysectorpolicyandregulatoryreforms20JETImplementationPlan2023–2027„Showsthatbuildingelectricitygridcapacityandstabilityareprerequisitesfortheenergytransition„Findsoff-Eskombalancesheetsolutionsforinvestmentsinthetransmissiongridandtherepurposingandrepoweringofretiringcoalpowerstationswhentheyreachendofeconomicandoperationallife„Chartsapragmaticpathtofront-loadingcommunitydevelopment,repurposing,andrepoweringinvestmentswhiledecommissioningdatesarerescheduledtomanagetheelectricitysupplycrisis„Acknowledgesthecountry’sfiscalconstraintstosovereignborrowingandtheprovisionofguarantees„Promoteseconomicdiversification,transformation,andindustrialisationintherenewableenergysectorthatempowersworkers,marginalisedcommunities,andblackbusinesses„Recognisesthatthepaceandscaleoftransitioningisaffectedbyexportmarketsandtheirregulatoryframeworks,andbyintellectualpropertyrestrictionsandcostsofdevelopinglocalindustry„EmphasisesthatfurtherfundscanandmustbemobilisedatscalefortheJETIP,inparticularintheformofhigherlevelsofgrantsfrommanyinternationalpartners,basedonSouthAfrica’sfirmpathwaystoachievingdefinedJEToutcomes,itssupportivepoliciesandleadership,thecommitmenttogoodgovernance,andaninstitutionallycoordinatedeffort.EnablersoftheJETImplementationPlanTheimplementationoftheJETIPisenabledbytheongoingmobilisationofmulitiplesourcesoffinanceandfivekeyinitiativesoftheJETPMU:1.TheTheoryofChangeunderpinsJETplanningatanationallevel,andforeachPortfolio.Itformsthebasisformonitoringandevaluationbylistingindicatorsthatwillbeusedtomeasureperformance.Itdefinestargetedimpacts,medium-termoutcomes(changesinperformance),short-termoutcomes(changesincapacityandsystems),outputs,andtheinputsthathavebeensecuredorareneeded.Thisissupportedbyadynamicriskmanagementframework,fromwhichtheJETPMUandtheimplementinginstitutionscantakestepstomitigatetheinherentriskstosuccess.2.ThegovernanceandinstitutionalarchitectureforJETimplementationcomprisesanInter-MinisterialCommittee(IMC)thatreportstoCabinet,aJETGovernmentSteeringCommitteethatreportstotheIMC,andaJETPMUinthePresidencythataccountstotheGovernmentSteeringCommitteeandsupportstheinstitutionsthatareleadingeachPortfolioofprogrammesandprojects.EachPortfolioisledbyaco-ordinatingcouncil/forum/committeestructurecomprisingstakeholdersfromgovernment,business,labour,andcivilsociety.JETImplementationPlan2023–202721EachPortfolioissupportedbyadedicatedsecretariattomanageplanningbydefinedworkstreams,mobilisefinancing,andmonitorperformance.Eachworkstream/programmewithinaPortfolioisledbyrelevantinstitutionalowners,involvingrelevantstakeholders,andsupportsmultipleprojectstoproceedundertheirowninstitutionalandgovernancearrangements.3.AJETProjects’RegisterhasbeencreatedtorecordallprojectsfinancedundertheauspicesoftheJETIP.ThefirststageisadocumentationofallgrantallocationstotheJETmadesinceNovember2021whenthePoliticalDeclarationwassignedbetweenSouthAfricaandtheIPG.ItliststhestatusofJETprojectsbypriorityarea/s,purpose,sourcegroups,activities,stage,amounts,implementinginstitution,andfunder,enablinganalysisacrosstheinterventionsandtheinclusionofcoremonitoringrequirementstobeincluded.TheJETProjects’Registerwillbeapubliclyaccessibleandtransparentdatabase,updatedquarterly.TheRegisterwillbeexpandedinduecoursetoincludeprojectsinvolvingconcessionalandcommercialfunding.TheJETProjects’RegisterwillshowcasethedevelopmentoftheJETprojects’pipelineperPortfolio.ItisakeybuildingblockofboththeJETFundingPlatformandtheJETmonitoring,evaluation,andlearning(MEL)system.4.AJETFundingPlatformwillbeestablishedbytheJETPMUin2024,initiallyinaproof-of-conceptphase.ItwillbeamatchmakingmechanismbetweenthesuppliersofgrantfundingandpotentialJETbeneficiaries.ItwillalsoprovideprojectpreparationsupportservicestoJETprojectoriginatorstohelpthemprepareplansandapplyforgrants.ItwillprovidethepublicwithregularanalysisofthedeploymentofgrantfundstoJETprojects.Grant-makerswhowillbeinvitedtobemembersoftheJETFundingPlatformincludeinternationaldonors,MultilateralDevelopmentBanks(MDBs),DevelopmentFinanceInstitutions(DFIs),philanthropies,andcorporates.TheJETPMUwillinvitethePCCandthegrant-makingmemberstonominateAdvisoryBoardmembersfromgovernment,business,tradeunions,andcivilsocietyorganisations.5.Amonitoring,evaluation,andlearning(MEL)systemthatsupportsthehierarchyofindicatorsdevelopedwithrelevantstakeholdersfortheJETImplementationPlanasawhole,andforeachPortfolio–fromimpacttooutputslevels.Thiscollaborativeworkwillcontinue,todefineannualmilestones,andtodeveloparesponsiveandpublicMELsystemwhichfeedsintodecision-makingandcontinuouslearning.22JETImplementationPlan2023–2027KeyFeaturesoftheSixJETImplementationPlanPortfoliosElectricity:FourlargeparallelprogrammesaretargetedforJETfinancing:„Large-scaleanddistributedRenewableEnergy(RE)generationandbatterystorage,mostlybytheprivatesector„Large-scaletransmissiongridexpansion,ledbyEskom/NationalTransmissionCompanyofSouthAfrica(NTCSA),withopportunitiesforinvestmentbytheprivatesectorthroughvariouspartnershipmodelstobepilotedurgentlyandscaledup„WidespreadinvestmentinmaintenanceandupgradesofdistributionsystemsinEskomandmunicipalities„Thefront-loadingofrepurposingandrepoweringinvestmentsbytheprivatesector,andalternativelivelihoodsforworkers,communities,andSMMEsattheretiringcoalpowerplants,withdecommissioningschedulesthatdonotdisruptelectricitysupply.MpumalangaJustTransition:FourparalleleffortsrequireJETfundingtodrivethetransitioninMpumalanga:„UtilisingtheJETFundingPlatformanditsprojectpreparationsupporttolinkappropriatesourcesoffinancetoimmediateJETprojectsidentifiedbytheProvincialGovernmenttoachievetangiblecommunitybenefits„ImplementingtheAcceleratingCoalTransitionInvestmentPlan(ACTIP)inamannerthatfront-loadsrepurposing,repowering,andcommunitydevelopmentatselectedEskomcoalpowerstations,aheadofdecommissioning„Promotingcommunity-drivenprojectsthatempowerlocalpeopletoshifttheirdependenceoncoalvaluechainsbydevelopingneweconomicopportunitiesalongsideexistingactivities,andbyplayingstrongerrolesindefiningtheirtransitionplans„AugmentingexistingstructuresinMpumalanga’soverallplanwithspecificnationalJETPortfoliosandworkstreams,particularlyinskillsdevelopmentandmunicipalcapabilitiesforthejusttransition.JETImplementationPlan2023–202723NewEnergyVehicles:FiveprogrammesrequireJETfinancingsupport:„Supply-sideincentivesfortheautomotiveindustrytounlockNewEnergyVehicle(NEV)productionandsupplychaininvestmentsandprotectandgrowmanufacturingemployment„Co-fundingforinvestmentsinNEVautoassemblyandsupplierparts,componentmanufacturingandsupplychains,andearly-stageinvestmentsinprojectandbusinessdevelopmentfordecarbonisingtransportandlogisticssupplychainsandassociatedcharginginfrastructure„ProjectpreparationforinvestmentsinNEVpublictransport(taxisandbuses)andassociatedcharginginfrastructure„Investmentsinthebatteryindustry,includingbatteryprecursormaterialsandcomponents,mineralsbeneficiation,andextraction„Planningforanationalcharginginfrastructurenetwork.GreenHydrogen:Sevenworkstreamsarescoped,requiringJETfinancingsupport:„Funding:tomobilisegrantandfirst-lossfundingfromdedicatedGreenHydrogen(GH2)globalfundstode-riskearlystagesinprojectdevelopment„Supply:tosecureaccesstokeyglobaltechnologies,secureco-developmentrights,andsupportlocalmanufacturing„Demand:tosecureexporttradedealsandlong-termoff-takeagreements„Sharedinfrastructure:tocoordinate,accelerateandprovidevisibilityondevelopmentofallinfrastructureprojects(port,grid,pipeline,rail)andplanforsharedinfrastructuredevelopmentcostsbetweendevelopers„Technologyincubationandworkforceskills:fast-trackresearchanddevelopmentfundingforpublicandprivateinnovationandbuildingSouthAfrica’scompetitiveadvantage„Policiesandregulations:developawheelingframeworkandcostregimeforGH2producersacrossthenationalgrid„Communityengagement:rolloutanengagementstrategyonsocio-economicbenefitsoftheGH2industryandaddresslocalconcernswithconcretebenefits.24JETImplementationPlan2023–2027Skills:FiveflagshipinterventionsrequireJETfinancingsupport,eachwithquickwinsidentified:„Establishmentofathree-tierJETskillsecosystemtocoordinateandalignJETskillsactivitiesacrossmultipleinstitutionsandstakeholders,inalignmentwithDepartmentofHigherEducationandTraining’s(DHET’s)nationalSkillsMasterplan2030„EstablishmentofSkillsDevelopmentZones(SDZs)(locallearningnetworks)focusedonthreecorevaluechains:inMpumalanga(renewableenergyandtransmission);intheEasternCape(NEVs);andintheNorthernCape(GH2),anchoredinlocaleducationinstitutionsinpartnershipwithbusinesstosupportcommunityandlocaleconomicdevelopmentinitiatives„JETskillsneedsassessmentsforeachofthesethreecoreJETvaluechains,andtheimplicationsfortertiaryeductioninstitutions„JETcapacitydevelopmentforgovernmentandkeygovernmentinstitutions„Supportforfoundationalskillsdevelopmentinvolvingupskillingteachersandintegratingsustainableenergyconceptsintoschoolcurricula.Municipalities:ThreeworkstreamsrequireJETfinancingsupport,inthecontextofaninter-governmentalapproachtomanagingtherisksandchallengesofthemunicipalenergytransition:„Capabilitydevelopment:includingthemunicipalJETcoordinationstructures,secretariat,anddatabases,municipalreadinessassessments,cost-of-supplystudies,andcapabilityplanspermunicipality„Financestructuring:quantificationandfinancingplansformunicipaldistributioninfrastructuremaintenanceandupgrades,fornewdistributioninfrastructure,andthedevelopmentofsuitablefinancingmechanisms„Energyaccess:efficientapplicationoftheFreeBasicElectricity(FBE)grant,energyefficiencyinhouseholds,andaccesstoaffordableenergyefficientappliances.Inearly2024,eachPortfoliowillelaborateonworkplans,targets,andmonitoringindicators.Theworkplanswillincludetheaccelerationofquickwinstoachievemomentumintheshortterm.JETImplementationPlan2023–20272526JETImplementationPlan2023–2027Chapter1:SCOPEANDOBJECTIVES27PURPOSEThepurposeofthischapteroftheJETImplementationPlanisto:„outlinethescopeoftheImplementationPlan„confirmthesixcurrentPortfoliosandflagthreeadditionalPortfoliosoftheJETImplementationPlan„clarifytheobjectivesoftheImplementationPlan.TheJETImplementationPlan2023-2027isaroadmapthatenablesSouthAfricatotaketargetedandalignedstridestowardsmeetingitsdecarbonisationcommitmentsinamannerthatwilldeliverjustoutcomesforthepeopleaffectedbytheenergytransitionandthatcontributestoinclusiveeconomicgrowth,energysecurity,andemployment.ItconfirmsthattheSouthAfricanJETwillbemanagedatapace,scale,andcostthatisconsistentwiththecountry’ssocio-economicdevelopmentpath,needs,andaffordability.AmultitudeofJustEnergyTransition(JET)initiativesareunderwayinSouthAfrica,ledbygovernmentinstitutions,theprivatesector,andcivilsocietyorganisations.Thesearefinancedthroughgovernmentprogrammes,bypartnergovernments,DevelopmentFinanceInstitutions(DFIs),MultilateralDevelopmentBanks(MDBs),philanthropies,corporatesocialinvestments,impactinvestors,andcommercialinvestors.ItisincreasinglyevidentthatfurtherfundscanandmustbemobilisedatscalefortheJETIPoncetherearefirmpathwaystoachievingdefinedoutcomes,underpinnedbyunambiguousgovernmentpolicyandleadership,goodgovernance,andinstitutionallyco-ordinatedeffort.TheJETImplementationPlanthereforedefinesshort-andmedium-termoutcomesforeachspecifiedPortfolioanddesignateskeyinstitutionstoleadspecificareasofthework.Theirroleswillbetocrowdinsectorstakeholdersandexpertise,co-createsolutionswithstakeholders,aligninitiatives,mobilisefinance,pushforresults,andmonitoroutcomes.28JETImplementationPlan2023–2027Chapter1:ScopeandObjectivesThePortfoliosoftheJETImplementationPlan,outlinedinthechaptersthatfollow,are:„Electricity„MpumalangaJustTransition(JT)„NewEnergyVehicles(NEVs)„GreenHydrogen(GH2)„Skills„Municipalities.ThreeadditionalPortfoliosareflaggedforinclusionintheJETImplementationPlanin2024:„SouthAfricanRenewableEnergyMasterplan(SAREM)„Energyefficiency„Road-to-rail.SouthAfricaisatanearlyandevolvingstageoftheJET,andtherearecomplexchallengestoovercome.Projectpreparationisnotwhereitneedstobe.FewoftheconcessionalloanpledgesmadetotheJETIPhavebecomefinancingagreements,sonewclimatefundsarenotyetflowingatscaleintotargetedprojects.Thereismuchtobedonetobuildinstitutionalcapabilityforefficientandcost-effectiveexecution.TheJETImplementationPlannamesthespecificchallengesineachfocusareaandseekstoplotpathwaysthatwillmoveidentifiedprioritiesintoactionsthatcandelivertangibleresults.Itidentifiestheresourceandcapacitybuildingneeds,notingthattechnicalassistancewillberequiredbygovernmentinstitutionsforyearstocome.EachchapteroftheJETImplementationPlanisbuiltonfeedbackreceivedfromawiderangeofstakeholdersduringtheJETIPconsultationsconductedbythePresidentialClimateCommission(PCC)inearly2023.Theissuesraisedbystakeholdersaredocumentedandtheplanshowshowtheseissueshavebeenaddressed.Inaddition,theJETProjectManagementUnit(PMU)engagedinextensivediscussionswithawiderangeofexpertsandrole-playersduring2023andconductedaseriesofeightfocusgroupsonkeysubjectmattersoftheJETImplementationPlanduringAugustandSeptember2023.AlltheseengagementshavemateriallyshapedthecontentoftheImplementationPlan.Criticalcontextualchangesoccurringin2023haveadirectbearingonthescopeofthisImplementationPlanandthepaceatwhichitcandeliver:1.Themostpositiveofthesechangesarethematerialstructuralreformsthatarebeingachievedintheenergysectorthroughpolicyandregulatoryreforms,withoutwhichtheJETwouldnotbeimplementable.JETImplementationPlan2023–2027292.Inlinewiththisstructuralreform,NationalTreasury(NT)steppedintorelievetheunsustainabledebtburdenincurredbythestate-ownedelectricityutility,Eskom.AmoratoriumonfurtherEskomborrowingisaconditionofthedebtreliefpackage,effectivelystallingthefinancingenvisagedin2022forEskom’saccesstoJETIPconcessionalloansfromDFIsandMDBsfortransmission,distribution,decommissioning,repowering,andrepurposinginvestments.3.Thecountry’selectricitysupplyremainsseverelyconstrained,managedthroughcontinuousrollingblackoutsthatnegativelyaffecteveryfacetofsocietyandtheeconomy.EnergysecurityneedsarethusdeferringthescheduledretirementsofEskom’soldcoalplants,impactingthepaceatwhichdecarbonisationofelectricitygenerationwasplannedtomaterialise.Thetimingandscaleofthesedeferralsisexpectedtobeclarifiedbeforetheendof2023.4.SouthAfrica’sfiscalpositionhasweakenedfurtherin2023,leadingNTtocurtailpublicspendingandnotincreasefiscalexposuretocontingentliabilities.ThecircumstancesplacebrakesonNT’sabilitytoenterintosovereignborrowingandguaranteeagreementsfortheJETIPconcessionalloans.5.Inmid-2023,governmentpublishedthedraftSouthAfricanRenewableEnergyMasterplan(SAREM),whichchartspromisingopportunitiesforsectorgrowth.Furthermore,policyandincentivesareexpectedtobeclarifiedsoonforelectricvehicles(EVs).Boththesepolicydevelopmentsbodewellforunlockingnewindustriesandcreatingnewjobsandskillsintherapidlytransformingenergysector.6.In2023,moreinternationalpartnerspledgedadditionalgrants,concessionalloans,andcommercialfinancingfacilitiestoSouthAfrica’sJETIP,increasingthepoolofavailablefunding.Theseimportant2023developmentsareelaboratedoninChapter3.Inthisevolvingcontext,theobjectivesoftheJETImplementationPlanaretobuildontheextensiveJETworkthatiscurrentlyunderwaythroughoutSouthAfrica,toprovideaconsolidatednarrationofitsstatus,andtochartaco-ordinatedwayforward.Insodoing,theJETImplementationPlanseekstoprovideacollaborativeroadmap,outlinegovernanceandinstitutionalarrangementsformulit-stakeholderco-creationofsolutions,listoutcomeandimpactindicators,andidentifysourcesoffinancing.Thespecificobjectivesareto:„ClarifyaroadmapforeachPortfolio„ConfirmgovernancearrangementsforJETimplementation„ConfirminstitutionalrolesandresponsibilitiesforimplementationineachPortfolio„DemonstratethatworkstreamsinvolvingmultiplestakeholderswithineachJETPortfoliowillco-createJETprogrammesandprojects„IdentifymeasuresneededtostrengtheninstitutionalcapabilitiesforJETexecutionineachPortfolio30JETImplementationPlan2023–2027Chapter1:ScopeandObjectives„IdentifythesourcesoffundsandfinancinginstrumentsthatcanbedeployedforeachPortfolio„ProposewaystounlockthepledgedJETIPconcessionallendingtoSouthAfrica,inthecontextoffiscalconstraintsandthemoratoriumonEskomborrowing„ConfirmplanstoestablishatransparentRegisterofprogrammesandprojectsfinancedundertheauspicesoftheJETIP„ConfirmplanstoestablishaJETFundingPlatformasamatchmakingplatformbetweenJETgrant-makersandJETprojects,withprojectpreparationsupportforprojectdevelopers„ConfirmadditionalPortfoliosthatwillbedevelopedintoJETImplementationPlansin2024„ConfirmtheindicatorsthatwillbeusedtomonitorandevaluateJETimplementationoutcomesandimpactoverthefive-yearperiod„Identifythekeyriskstoachievingthestatedoutcomesandimpact„MobilisefurthersourcesofappropriatefinancingfortheJETImplementationPlan2023–2027.JETImplementationPlan2023–20273132JETImplementationPlan2023–2027Chapter2:BRIEFOVERVIEWOFTHEJETIP2023–202733PURPOSEThepurposeofthischapteroftheJETImplementationPlanisto:„provideremindersofthekeyfeaturesoftheJETIP2023–2027andtoprovidealinktothefulldocument„toconfirmthattheJETIPandthisImplementationPlanarefoundedontheprinciplesofjusticesetoutinSouthAfrica’sJustTransitionFramework,andtoprovidealinktothispolicydocument„torecordthestepstakenbythePresidencyin2023toleadtheimplementationoftheJETIP.SouthAfrica’sJETIP2023–20271setsoutthescaleofneedandtheearly-stageinvestmentsrequiredforthecountry’sJustTransition(JT)toalow-carbonandclimate-resilienteconomyinlinewithitsupdatedNationallyDeterminedContribution(NDC)lodgedwiththeUnitedNationsFrameworkConventiononClimateChange(UNFCCC)in2021.TodecarboniseSouthAfrica’seconomywithintheNDCtargetrangeof350–420MtCO2eqby2030,willrequireapproximatelyZAR1.5trillionoverfiveyearsfrommultiplesources:developedcountries;privatesectorinvestors;DevelopmentFinanceInstitutions(DFIs);MultilateralDevelopmentBanks(MDBs);government;andphilanthropies.Theinvestmentsareneededinthreeprioritysectors:electricity,NewEnergyVehicles(NEVs),andGreenHydrogen(GH2).Furtherinvestmentsareneededintwocross-cuttingareas:skillsdevelopmentandmunicipalities.Thecoalminingandcoal-powerproducingprovinceofMpumalangarequiresspecificinvestmentstodiversifyitseconomyanddevelopnewopportunitiesforpeopledependentonthecoalvaluechain.SouthAfrica’sdependenceonfossilfuelsgivesrisetoarangeofclimate,energy,andtransitionrisks,especiallyforaffectedworkers,communities,businesses,andexporters.Thischallengeisinacontextwherepoverty,inequality,unemployment,andenergyinsecurityareatuntenably1ThePresidency,RepublicofSouthAfrica.(2022).JETIP2023–2027.(https://www.thepresidency.gov.za/content/south-af-rica%27s-just-energy-transition-investment-plan-jet-ip-2023-2027).34JETImplementationPlan2023–2027Chapter2:BriefOverviewoftheJETIP2023–2027highlevelsacrossthecountry.TheJETIP2023–2027isbuiltontheJustTransitionFramework2adoptedbyCabinetin2022,whichaffirmsthatSouthAfrica’senergytransitionmustbeembeddedinredistributive,restorative,andproceduraljustice.Tothisend,theJETIPaimstoconfirmSouthAfrica’sresolvetoimplementtheJustEnergyTransition(JET)inawaythatprotectsvulnerableworkersandcommunities,buildsenergysecurity,expandsenergyaccess,promotesindustrialdevelopment,drivesinnovation,developssustainablelivelihoods,enableseconomicdiversification,andspursinclusiveeconomicgrowth.Table1:JETIP2023–2027fundingrequirementsJETIPfundingrequirements2023–2027ZARbillionUSDbillionElectricitysector711.447.2NewEnergyVehicle(NEV)sector128.18.5GreenHydrogen(GH2)sector319.021.2Skillsdevelopment2.70.18Municipalcapacity319.121.3TOTAL98.381480.3AchievingtheJETIPoutcomesisdependentonthescaleandnatureoffinancialsupportthatSouthAfricacansecurefromtheinternationalcommunitytocomplementdomesticresources.Atthe26thConferenceoftheParties(COP)in2021,aJustEnergyTransitionPartnership(JETP)wasforgedwithFrance,Germany,theUnitedKingdom(UK),theEuropeanUnion(EU),andtheUnitedStatesofAmerica(USA)(formingtheInternationalPartnersGroup(IPG)).TheIPGundertooktomobiliseUSD8.5billionoverfiveyearstosupportSouthAfrica’sJET.TheinitialIPGofferofUSD8.5billionisthusacatalyticcontributiontowardsaddressingtheJETIPpriorities.PresidentRamaphosalaunchedtheJETIP2023–2027atthePresidentialClimateCommission(PCC)meetingon4November2022,whereherequestedthePCCtoengageinpublicconsultationsonthePlanwithstakeholdersandsocialpartners.ThePresidenthandedtheJETIPtotheHeadsofStateoftheIPGattheUNFCCCCOPheldinSharmEl-Sheikhon8November2022,andsubsequentlytableditattheG20summitheldinIndonesiathatmonth.InJanuary2023,thePresidencyinitiatedtheestablishmentoftheJETProjectManagementUnit(PMU)todrivetheimplementationoftheJETIPandcompiletheJETImplementationPlan.2PresidentialClimateCommission.(2022).JustTransitionFramework.(https://www.climatecommission.org.za/just-transi-tion-framework).JETImplementationPlan2023–20273536JETImplementationPlan2023–2027Chapter3:2023DEVELOPMENTS37PURPOSEThefirstyearoftheJETIP2023–2027implementationandthepreparationofthisJETImplementationPlanhasbeeninformedbythefollowingimportantdevelopments,whichareelaboratedoninthischapter:„feedbackfromstakeholdersduringthePresidentialClimateCommission(PCC)consultationsontheJETIP„policyandregulatoryreforms„Eskomdebtrelief„electricitysupplycrisis„fiscalconstraints„SouthAfricanRenewableEnergyMasterplan(SAREM)„statusofJETIPfinancing.3.1Stakeholders’FeedbackontheJETIPThePresidentialClimateCommission(PCC)consultationprocessconductedinearly2023comprisedofinformation-sharingsessionstofamiliarisestakeholderswiththecontentoftheJETIP,andformalconsultationplatformsforstakeholders’contributionsanddiscussion.ThepurposewastogatherandconsolidateviewsonwhatconstitutesaJustEnergyTransition(JET)fortheSouthAfricaneconomyandsociety,buildtrustandunderstandingbetweenparties,identifyelementsofthePCC’sJustTransitionFrameworkthatneededtobebuiltintotheJETIP,andestablishconsensusonasetofrecommendations.Therewasactiveparticipationbycivilsocietyorganisations,labourorganisations,businessassociations,andgovernmentinstitutions.ThePCCsubsequentlypublishedtworeportsontheoutcomesoftheseconsultations.33PresidentialClimateCommission.(2023).TowardsaJustTransition.(https://www.climatecommission.org.za/).38JETImplementationPlan2023–2027Chapter3:2023DevelopmentsEachchapteroftheJETImplementationPlansummarisesfocusarea-specificconcernsraisedduringthePCCstakeholderconsultationsandshowshowtheseareaddressedinthePlan.Atanaggregatelevel,thefollowingkeyissuesfromstakeholdershaveinformedthepreparationoftheJETImplementationPlan:„JustTransition:Theresoundingmessagewasthatredistributive,restorative,andproceduraljusticemustbethebasisoftheJETIP,andthattheJETIPmustsharpenitsfocusandresourcesoncommunitiesandworkerswhoaremostatriskintheenergytransition.Manywereconcernedaboutenergyaffordability,energyaccess,unemployment,poverty,inequality,skills,andtheequitablesharingofJETriskandopportunities.„Consultation:AllconstituencieswantedmoreconsultationintheformulationoftheJETIP,andmoretimefordiscussionanddebateonJETIPprioritiesandresourceneeds.„Timeframes:ItwasgenerallyfeltthatSouthAfricashouldtransitionatapaceitcanafford,coupledwithanindustrialstrategythatwilldriveemploymentcreationandeconomicgrowthinnewenergytechnologies,includingthroughthebeneficiationofitsmineralresources.Thereweredifferingviewsonthepaceandextentofdecarbonisation,withsomearguingthatSouthAfrica’senergysecurityshouldcomebeforeclimatemitigation.„Financing:TherewasacallforgreatertransparencyonthefinancingtermsoftheInternationalPartnersGroup(IPG)concessionalloanoffers,andaconcernthatthecostofthisdebtfinancewouldfurtherburdenthenationalfiscus.ThegrantcomponentoftheIPGpackagewascriticisedasinadequateconsideringthescaleofneedforJustTransitioninterventions,whichcouldnot,andshouldnot,befinancedwithdebt.„Gridcapacity:MoststakeholdersemphasisedthatgridupgradesarecentraltothetransitiontoRenewableEnergy(RE),andthatthereshouldbecomprehensiveenergysecurityforallcommunities,callingontheJETIPtomakeadequateprovisionfortheseinvestments.„Skills:TheweightingandcostinggiventoskillsdevelopmentneedsintheJETIPwascriticisedasinadequate.SouthAfrica’slowskillsbasefortheenergytransitionwashighlighted,withconcernsraisedaboutpoorco-ordinationamongsttraininginstitutionsandtheneedforspeedandscale.„Municipalities:TheroleofmunicipalitiesintheJETwasperceivedasvital,requiringmoregranularandparticipatoryplanningthanoutlinedintheJETIP.„GreenHydrogen(GH2):QuestionswereraisedabouttherationaleforincludingGH2inthescopeoftheJETIP,withconcernsthatitrequirestoomuchREinthecontextofanenergysecuritycrisisandwoulddrawJETIPinvestmentawayfromotherJETpriorities.„NewEnergyVehicles(NEVs):Fororganisedlabour,thetransitiontoelectricvehicles(EVs)(forexportanddomesticmarkets)wasidentifiedascriticaltoprotectingautomotivesectorjobsandvaluechains.CivilsocietyorganisationscalledforsupporttoconvertpublictransportbusesandtaxistoEVs,andforanemphasisonfreightlogisticsfleetconversions.JETImplementationPlan2023–202739InvestmentintheNEVsectorwassupportedforbothindustrialdevelopment(includinginbatterymanufacturing)anddecarbonisationoutcomes.„Socio-economicoutcomes:Jobcreation,localisation,communityownership,supportforblackbusinesses,andelectricityaccesswerepositionedasnon-negotiableoutcomestobetargetedfortheJETIP.„Monitoringandevaluation(M&E):AtransparentandaccountableM&EsystemneedstobeestablishedfortheimplementationoftheJETIP.Concernswereraisedaboutcorruptionandtheft.3.2EnablingPolicyandRegulatoryReformsforaJustTransitionTheGovernmentofSouthAfricaisimplementingfar-reachingreformsintheenergysectortoovercometheimmediateenergysupplyconstraintandtoachievelong-termenergysecurity,whilesupportingthetransitiontoalow-carboneconomy.ThesereformswillfundamentallytransformtheinstitutionallandscapeoftheenergysectorandunlockprivateinvestmentinRE.TheEnergyActionPlanannouncedbyPresidentRamaphosainJuly2022hasfivekeyobjectives:1.FixEskomandimprovetheavailabilityofexistingsupply.2.Enableandaccelerateprivateinvestmentingenerationcapacity.3.Fast-tracktheprocurementofnewgenerationcapacityfromrenewables,gas,andbatterystorage.4.Unleashbusinessesandhouseholdstoinvestinrooftopsolar.5.Fundamentallytransformtheelectricitysectortoachievelong-termenergysecurity.TheimplementationoftheEnergyActionPlanisoverseenbytheNationalEnergyCrisisCommittee(NECOM),whichischairedbythePresidency.SeveralkeymilestoneshavebeenreachedinadvancingpolicyandregulatoryreformsincetheannouncementoftheJETIPin2022:„Schedule2oftheElectricityRegulationAct(ERA),2006,wasamendedinDecember2022toremovethelicensingthresholdforgenerationfacilities.Thisregulatoryreformhasenabledprivateinvestmentingenerationprojectsofanysize,withthepipelineofprivateinvestmentinREsourcesgrowingatarapidpace.„TheElectricityRegulationActAmendmentBill,2002,hasbeenformallytabledinParliament.Inadditiontooutliningthepowersandfunctionsofthetransmissionsystemoperator,theBillwillestablishacompetitiveelectricitymarkettoenablegreaterefficiencyandcompetitionbetweenmultipleelectricitygenerators.40JETImplementationPlan2023–2027Chapter3:2023Developments„InparalleltotheintroductionoftheERAAmendmentBill,2002,adraftmarketcodehasbeendeveloped,whichwilloutlinetherulesofthemarket.ThiswillensurethatthemarketcanbeestablishedwithoutdelayoncetheBillisenacted.„Aonestopshophasbeenestablishedtoprovideasingle-entrypointforREprojectstoobtainthenecessaryauthorisations.ThisincludesanonlineplatformanddedicatedcapacityintheDepartmentofTrade,IndustryandCompetition(DTIC)tofacilitateapplicationsandensurethatmaximumtimeframesareadheredto.„Timeframeshavebeenreducedsignificantlyforregulatoryapprovalsrequiredbyenergyprojects.Thefollowingprocessesarebeingfast-tracked:ƒTransmissioninfrastructurenolongerneedsanenvironmentalpermitinareaswithlowenvironmentalimpactƒEnvironmentalpermitsarenowissuedin57daysforstrategicinfrastructureprojectsƒRegistrationwiththeNationalEnergyRegulatorofSouthAfrica(NERSA)nowtakesanaverageof19daysƒGridconnectionnowtakessixmonthsinsteadofninemonthsƒLand-useauthorisationsnowtakes30daysinsteadof90days.„Governmenthasissuedadeterminationformorethan14000MWofnewgenerationcapacitytobeprocuredfromwind,solar,andbatterystorage–theremainingallocationintheIntegratedResourcesPlan(IRP)2019.Thiswillallowfurtherbidwindowstoproceedonanacceleratedbasis.„ThreehybridsolarandbatterystorageprojectsfromtheriskmitigationprogrammeareinconstructionandwillconnecttothegridbytheendofNovember2023.Anadditionalfivepreferredbiddersforhybridprojectsfromthesameprogrammehaveconfirmedtheirintentiontoreachfinancialclosebeforetheendof2023.„PowerPurchaseAgreements(PPAs)havebeensignedwith19projectsfromBidWindow5oftheRenewableIndependentPowerProducerProcurementProgramme(REIPPPP)foratotalof1759MW.Ofthese,nineprojectshavealreadyachievedcommercialclose,ofwhich784MWisnowinconstruction.Inaddition,sixpreferredbiddershavebeenselectedforatotalof1000MWfromBidWindow6.Thiswillbringthetotalamountofnewcapacityunderconstructionfromthelasttwobidwindowstoover2300MW.„Governmenthasintroducedexpandedtaxincentivesforbusinessesandhouseholdsthatinstallsolarsystems.Theseincludeataxrebateof25%ofthecostofsolarpanels,aswellasanincreasedcapitaldepreciationallowanceof125%inthefirstyearofinstallationunderSection12BoftheIncomeTaxAct.„NationalTreasury(NT)haslaunchedtheEnergyBounceBack(EBB)LoanGuaranteeSchemetosupporttheinstallationofalternativepowersupplybysmallandmediumenterprises(SMEs).Theschemeaimstosupport1000MWinadditionalgenerationcapacity,JETImplementationPlan2023–202741aswellasfacilitateresiliencetoloadsheddingformicroandinformalbusinesses.Governmentwill,throughaguaranteeadministeredbytheSouthAfricanReserveBank,assumetheinitiallosses(20%)withfinanceprovidersassumingtheriskforremaininglosses.TheschemewillfacilitateloanstoSMEs,households,energyservicecompanies(ESCOs),andsuppliers.„AdraftNetBillingFrameworkhasbeendevelopedtostandardisenetbillingacrossmunicipalitiesandisawaitingapprovalbyNERSA.Thiswillensurethatalldistributorshaveanexportcreditinplaceforsmall-scaleembeddedgeneratorstofeedpowerintothegrid.„TheamountofrooftopsolarcapacityinSouthAfricahasincreasedtomorethan4000MW,helpingtoreduceloadsheddingoverthewintermonths.ThismeansthatrooftopsolarinstallationshavemorethandoubledsincetheEnergyActionPlanwasannounced–anexponentialincrease.„Eskomhasintroducedpowerfulincentivesforenergy-savingandenergy-efficiencymeasuresthroughtheDistributionDemandManagementProgramme(DDMP).Theprogrammefollowsaperformancecontractingapproach,withanincentiveofZAR3million/MWprovidedforachieveddemandreductionduringspecifiedperiods.„EskomhasleasedlandaroundseveralpowerstationsinMpumalangatodevelopersforprivateenergyprojects.InPhase1,agreementshavebeensignedfor1800MWofcapacitytobebuiltwheretransmissioninfrastructureisalreadyavailable.„NERSAhasapprovedthreelicenseapplicationsbytheNationalTransmissionCompanyofSouthAfrica(NTCSA),forthetransmissionnetwork,trading,andimport/export.TheprocessofappointingaboardfortheNTCSAisunderwaywhich,inadditiontolenderconsents,representsthefinalhurdlefortheestablishmentofanindependenttransmissioncompany.InsupportofSouthAfrica’sestablishedclimatechangepolicies,andinternationalcommitmentsandobligations,theClimateChangeBillwasintroducedinParliamentinFebruary2022.Approximately13200writtensubmissionswerereceivedandcountry-widepublichearingswereheld.ParliamentiscurrentlyinthefinalstagesofpreparingtheBillfortablingintheNationalAssembly.TheClimateChangeBillacknowledgestheurgentthreatthatclimatechangepresentsandemphasisestheneedforaneffective,progressive,andincrementalresponse.Itaimstoprovideanintegratedresponsetoclimatechange,includingthroughinter-governmentalco-ordination.Itprovidesfortheeffectiveidentificationandmanagementofclimatechangeimpacts,setsouthowSouthAfricawillmakeafaircontributiontotheglobalefforttostabilisegreenhousegas(GHG)concentrations,andemphasisesthecommitmenttoaJustTransition(JT)toalowcarboneconomyandsociety.TheBillsetsoutthesystemstoachievethis,andestablishestheinstitutionalmechanismsrequired.IncludedintheBillarerequirementsforallorgansofstatetohaveaclimatechangeresponse,andfortheestablishmentofreportingandmonitoring42JETImplementationPlan2023–2027Chapter3:2023Developmentssystemsacrossboththepublicandprivatesectorsforbothmitigationandadaptation.TheClimateChangeBillisexpectedtobeenactedin2024.3.3EskomDebtReliefInthecontextofelectricitysectorreformsandfollowinganassessmentofoptionsthatwouldenableEskomtooperatesustainablywithoutcontinuedtransfersfromthenationalfiscus,theMinisterofFinanceinFebruary2023announceddebtrelieftoEskomtotalingZAR254billion,effectivefromApril2023.ThedebtreliefpackageinvolvesadvancesofZAR78billionin2023/24,ZAR66billionin2024/25,andZAR40billionin2025/26,coveringEskom’sdebtsettlementrequirementsoverthethreeyears;andin2025/26governmentalsotakesonsomeZAR70billionofEskom’sloanportfolio.TheMinisterofFinancehasallowedEskomtoconverttheloantogovernment-ownedequity,resultinginastrengthenedEskombalancesheet.TheconditionsofthisdebtreliefincludeamoratoriumonEskomborrowingoverthedebtreliefperiodunlessanexplicitexemptionisgivenbytheMinisterofFinance.Duringthistime,Eskommayonlyincurcapitalexpenditurefromitsoperationalincomeontransmissionanddistribution,andonlyonlimitedelementsofitsgenerationbusiness.ThemoratoriumonEskomborrowinghasasignificantimpactontheimplementationoftheJETIP,inwhichEskomwasexpectedtotakeuppledgedconcessionalloansfortransmission,distribution,decommissioning,repurposing,andrepowering.NationalTreasury(NT)andtheJETPMUhavebeenworkingonthedesignofoff-Eskombalancesheetfinancingoptionsforinvestmentsinthetransmissiongridandfortherepurposingandrepoweringofretiringcoalpowerplants,includingtheimplementationoftheAcceleratedCoalTransitionInvestmentPlan(ACTIP),whichformsalargepartoftheIPGfinancingpackagefortheJETIP.TheconclusionsofthisworkandproposedwayforwardaresetoutinChapter5oftheJETImplementationPlan.3.4TheElectricitySupplyCrisisThenationalelectricitysupplycrisisworsenedin2023,withEskomincreasingitsextendedperiodsofloadsheddingtocurtaildemand.Theimpactonindustry,businesses,publicservices,andhouseholdsremainssevere.Withfewshort-termoptionstoabatethecrisis,andintheinterestsofenergysecurity,theMinisterforElectricityinthePresidencycalledforareassessmentofcoalplantdecommissioningtoextendthelivesofretiringcoalgenerationunits.NTundertookindependenttechnicalstudiestoidentifythefeasibilityofdelaystodecommissioning.Formaldecisionsareawaitedonwhichpowerstationunitscanandwillberetainedinservice,forwhatperiods,andtheimpactofsuchdecisionsonSouthAfrica’sdecarbonisationtrajectory.JETImplementationPlan2023–202743ThesecircumstanceshavematerialimplicationsfortheJETImplementationPlanwhich,inaccordancewiththeIRP2019,hadearmarkedfinancingforthescheduleddecommissioning,repurposing,andrepoweringofHendrina,Camden,andGrootvleipowerstationsasSouthAfrica’sflagshipdecarbonisationandJustTransitioninitiatives.AcombinationofhighlyconcessionalloansandgrantsfromtheClimateInvestmentFunds(CIF)andconcessionalloansfromtheWorldBank(WB)andtheAfricanDevelopmentBank(AfDB),arepledgedandearmarkedforEskom’sborrowingundertheACTIP,tobeimplementedatthesethreepowerstationsoverthenextfiveyears.CombinedwiththecurrentmoratoriumonEskomborrowing,thereschedulingofcoalplantdecommissioningmayrequireadjustmentstotheretirementsequencingofpowerstations.TheproposedwayforwardfortheACTIPissetoutinChapter5oftheJETImplementationPlan.3.5TheSouthAfricanRenewableEnergyMasterplanSince2021,thegovernment,incollaborationwithlabourandindustry,hasbeendevelopingtheSAREMaspartofaseriesofindustrialisationmasterplansaimedatdrivingSouthAfrica’sindustrialpolicyandstrategy.4TheSAREMhasralliedsocialpartnerstocatalyseopportunitiesforlocalmanufacturinginREandbatterystorage,withafocusoninclusivedevelopment,transformation,jobcreation,andlocalisationacrossthevaluechains.TheSAREMvisionandobjectivesaresupportedbyfourpillars(supportingdemand,drivingindustrialdevelopment,fosteringinclusivedevelopment,andbuildingcapabilities),thatencapsulateninehigh-levelimplementationelementsprioritisedbytheSAREMpartnersduringconsultation.TheSAREMisnowbeingfinalisedforimplementation.EconomicdiversificationandindustrialisationopportunitiesarisingfromtheadoptionofREwereflaggedintheJETIPascriticalforSouthAfrica’sJET.TheSAREMimplementationplanswillthereforebepromotedforgrantandconcessionalfinancingsupportasaPortfoliooftheJETImplementationPlanfrom2024.3.6JETIPFinancingStatus2023TheJETIP2023–2027setsoutafinancingrequirementofZAR1.5trillionorapproximatelyUSD85billion5overfiveyears(Table2).Thebiggestproportionofthisisforthedecarbonisationoftheelectricitysector,alongsideinvestmentsthatmitigatetheimpactoftheenergytransitiononaffectedworkersandcommunities.TheJETIP2023–2027isaninvitationtodonorsandinvestorstojointheSouthAfricangovernmentinfinancingtheJET.4ThedraftSAREM,releasedJuly2023,isavailablehere.5TheexchangerateusedintheJETIP2023–2027was15:1.44JETImplementationPlan2023–2027Chapter3:2023DevelopmentsTable2:JETIP2023–2027financingrequirements(ZAR(USD)billions)InfrastructureElectricity6NEVGH2Sub-total978833131.374Planningandimplementation2.1425.59.6capacity4383.440.4--9.6Economicdiversificationand-2.7innovation9.6128(7.3)319(18.2)1480(84.6)Socialinvestmentand2.7inclusion1030.14(58.9)SkillsdevelopmentSub-totalTOTALZAR(USD)billionsTheoriginalIPGpledgesfromtheEuropeanUnion(EU),Germany,France,UnitedKingdom(UK),andtheUnitedStatesofAmerica(USA),togetherwithfinancingcommittedthroughtheClimateInvestmentFunds(CIF)amounttoapproximatelyUSD8.5billionorapproximatelyZAR148.75billion.The2021IPGpledgestotheJETIPhavebeencatalyticinattractingadditionalpledgesin2023.TheNetherlandsandDenmarkhaveformallyjoinedtheIPGwithnewfundingcommitments,andCanada,Spain,andSwitzerlandhaveallocatednewresourcestosupporttheJETIP.ThenewlymobilisedresourcesaresetoutinTable3.ThetotalcontributionfrominternationalpartnersnowstandsatUSD11.6billion(equivalenttoZAR198.2billion7).ThepledgesmadeinlocalforeigncurrencyaretabulatedinAnnexureAtoChapter3.ExchangeratesappliedtoconverttheforeigncurrencypledgestoUSDshowninTable3arelistedinthefootnotebelow.6Includesthecostingofinvestmentsneededformunicipalitiestopreparefortheenergytransition.7ExchangerateUSD1:ZAR17.05.JETImplementationPlan2023–202745Table3:InternationalfinancingpledgedfortheJETIPasofSeptember2023USDmillionsGrantsTotalHighlyconcessionalclimateloansConcessionalloansCommercialdebt/equityExportcreditsACTIP–CIF50450900875-22751EU/EIB125-1080216-1421France4-1080--1084Germany241-1048--1289UK34-13002500-1834US63-01000-1063OriginalIPGtotal51745054082591-8966Denmark20-5865-143Netherlands1673----167NewIPGtotal187-5865-310Spain16-27010818902284Switzerland35----35Canada1----1Non-IPGtotal52-27010818902320Grandtotal75645057362764189011596NotestoTable3:1.ExcludesanamountofUSD330milliontobemobilisedfromlocalDFIs2.UKguaranteetoincreaseAfDBlendingtoSouthAfrica3.IncludesUSD54millioninitialgrantcontributionfromInvestInternationaltoleverageUSD1080millionGH2FundLocalforeigncurrencyUSD(averageOctoberLocalforeigncurrencyUSD(averageOctoberEuro2022–September2023)CanadianDollar2022–September2023)DanishKroneSwissFrancPoundSterling1.080.770.121.091.2446JETImplementationPlan2023–2027Chapter3:2023DevelopmentsThestatusonthepledgedbilateralconcessionalloanfacilitiesisasfollows:„TwoconcessionalloanshavebeenconcludedbytheNTandallocatedintheformofsovereignpolicy-basedloans(PBLs).TheseareEUR300millionfromtheGermanDevelopmentBank(KfW)andEUR300millionfromtheFrenchDevelopmentAgency(AFD).„TheClimateInvestmentFundAcceleratingCoalTransitionInvestmentPlan(CIFACTIP)fundingpackage(includingthegrantcomponent)isduetobeprogrammedbyMay2024,pendingresolutiononthereschedulingofcoalplantdecommissioningandadecisionontheborrower,sincethereisamoratoriumonEskomborrowingforthenextthreeyears.„Decisionsontheutilisationoftheremainingconcessionalloansandguaranteeshavenotyetbeenmade,givenboththeEskomborrowingmoratoriumandNT’sfiscalconstraintstotakeonadditionalsovereigndebtorissuesovereignguarantees.Thesedecisionswillbemadeonamotivatedcase-by-casebasis.Thestatusonpledgedgrantsisasfollows:„Approximately50%ofthepledgedgrantfundingfortheJETIPhasbeendeployedtodonor-approvedprojectstodate,whileafurther35%isinplanningstages„Some47%ofthepledgedgrantsarebeingusedfortechnicalassistance,19%forinfrastructure,11%forcommunitydevelopment,10%forprojectpreparation,10%forcapacitybuilding,andtheremainderforstudiesandcommunications„MpumalangaJustTransitionprojectsareattractingabout26%ofgrantallocationsacrossthePortfolios.Thestatusonpledgedcommercialloanfacilitiesisasfollows:„ThecommercialfacilitiespledgedundertheJETIPhavenotbeenprogrammedtodate.ItisanticipatedthatatleastZAR500billionwillbeinvestedintheJETbytheSouthAfricanprivatesector,particularlyinREtechnologies,GH2,andNEVs.Indeed,privateinvestmentisnowhappeningatscaleinREgeneration,asoutlinedinChapter5,thankstoelectricitysectorreforms.ThedepthofSouthAfrica’sfinancialmarketisevidencedbythesizeoftheassetbaseoffinancialinstitutions,liquidityofthelistedmarket,theactiveforeignexchangemarket,aswellasthedurationandmaturityofthebondmarket.SourcesofprivatecapitalavailableforSouthAfrica’sJETIPincludelocalandinternationalcommercialbanks,institutionalinvestors,andinsurancecompanies.Theprivatefinancemarkethasawealthofskillsandexpertisethatcontinuestoenableinnovationandcompetition.Thesector’scontributiontothenationalGDPwasoverZAR1trillionin2022.JETImplementationPlan2023–202747Inadditiontocommercialinvestments,theprivatesectormakesmaterialcontributionstosocialandenvironmentalprojectsthroughcorporatesocialinvestment,enterprisedevelopment,andskillsdevelopment.TheproportionoftheseinvestmentsthatcontributetotheJETneedstobequantified,andopportunitiesforexpandingtheirJETimpactneedtobebuilt.TheinternationalphilanthropycommunityisasourceofsignificantsupportfortheJETinSouthAfrica,particularlytocivilsocietyorganisations.Thescaleandimpactofthisvaluablefundingneedstobecollated,acknowledged,andalignedwiththeothersourcesofJETIPgrantcapitaltoachieveoptimalresults.TheSouthAfricanGovernment’sbudgetarycontributionstotheJETIPthroughfundsappropriatedbyParliamenthasnotyetbeenconfirmed.NThascommencedwithataggingexercisetoidentifypastexpenditurethatcanbeattributedtoJETIPpriorities,andtoplanforfutureJETIPtagging.Thisworkwillbecontinuedin2024.Similarly,thecontributionsofSouthAfrica’stwoDFIs,theDevelopmentBankofSouthernAfrica(DBSA)andtheIndustrialDevelopmentCorporation(IDC),aretobeconfirmed.Theextenttowhichinternationalcommercialinvestments,SouthAfricanprivatesectorresources,andpublicsectorbudgetspendingarecontributingtotheJETIPrequiresanalysis.Ontheonehand,thesemustbemeasuredagainsttheSouthAfricanGreenFinanceTaxonomy(2022),whileontheotherhand,clearclassificationsforwhatconstitutesthe‘justtransition’elementsofJETIPinvestmentsarestillunderdebate.48JETImplementationPlan2023–2027Chapter3:2023DevelopmentsAnnexureA:InternationalpartnerpledgestoJETIP(inlocalforeigncurrencies)asatSeptember2023SourcePledgeSourcePledgeACT-CIF(USD)(millions)USA(USD)(millions)ofwhich:Grantsofwhich:GrantsHighlyconcessionalloans2275Commercialdebt/equity1063Concessionalloans50Denmark(Krone)63Commercialdebt/equity450ofwhich:GrantsEU/EIB(Euro)900Concessionalloans1000ofwhich:Grants875Commercialdebt/equity1201Concessionalloans1316Netherlands(Euro)169Commercialdebt/equity116ofwhich:Grants487France(Euro)Spain(Euro)545ofwhich:Grants1000ofwhich:Grants155Concessionalloans200Concessionalloans155Germany(Euro)1004Exportcredits2115ofwhich:GrantsSwitzerland(SwissFranc)Concessionalloans4ofwhich:Grants15UK(USD)1000Canada(CanadianDollar)250ofwhich:Grants1193ofwhich:Grants1750Supplementarygrants(GBP)22332Concessionalloans97032Commercialdebt/equity18341.61.624101300500JETImplementationPlan2023–20274950JETImplementationPlan2023–2027Chapter4:IMPLEMENTINGTHEJETIP51PURPOSEThepurposeofthischapteroftheJETImplementationPlanisto:„articulatetheTheoryofChangethatunderpinsplanningandperformancemonitoringoftheImplementationPlan„setoutthegovernanceandinstitutionalarchitecturefortheImplementationPlan„confirmthecreationoftheJETProjects’Register„outlinetheestablishmentofaJETFundingPlatform„providetherationalefordevelopingthethreenewPortfoliosin2024.4.1ContextImplementingtheJETIPrequiresamultitudeofrole-playerstodirecttheirresourcesandefforttowardsdecarbonisingtheeconomyandopeningdoorsforthenewsourcesofgrowthandlivelihoodsthatcomewithRenewableEnergy(RE).Todothiscost-effectively,unwaveringcommitmentisneeded,andco-creationbygovernment,business,labour,civilsociety,andinternationalpartnersfortheagreedPortfolios,andthereafter,totheplanning,financing,andmanagementofprogrammesandprojectswithineachPortfoliothatwillachievetargetedoutcomes.Establishingroadmapsforthiscomplexco-creationprocessacrossthevariousdisciplinesisthefocusoftheImplementationPlan.TheportfoliosofworkandthescaleofneedaresetoutintheJETIP2023–2027andarecarriedintothechaptersofthisImplementationPlan.Fromthewidestakeholderengagementsthathaveinformedthisdocument,thereisbroadconsensusthatthesixPortfoliosarecorrect,andthatthreeotherPortfoliosneedtobeincluded.52JETImplementationPlan2023–2027Chapter4:ImplementingtheJETIPTomovefromPortfoliodefinitionstothedeliveryofeffectiveprogrammesandprojects,isdependentonleadership,organisation,andskills.TheImplementationPlanthereforebuildsonexistingorganisationalcompetenciesandmandatesineachPortfoliotocreateanarchitectureofgovernanceandinstitutionalresponsibilitiesforimplementationthathasthebestprospectsforsuccess.FinancingisavailabletomakemeaningfulstridesintheimplementationoftheJETIP,asoutlinedinChapter3.However,notalltheavailablefinancinginstrumentsarewellmatchedwiththenatureoffinancingneededineachPortfolio,noraretheyallcurrentlyusableunderSouthAfrica’sfiscalconstraints.ThisrealitypresentsachallengetotheJustEnergyTransition(JET)partnershipbetweenSouthAfrica,theMultilateralDevelopmentBanks(MDBs),andthedevelopedcountriesthathavepledgedconcessionalloanfinancingfortheJETIP.Inparticular,itwillrequiredeterminedproblem-solvingandinnovationbyallpartiestounblocktheflowofconcessionalloansthatareavailablefortheJETIP.Inthemeanwhile,government’senergysectorpolicyreformsareunleashingunprecedentedlevelsofprivateinvestmentinREgeneration,andthereisapromisinglikelihoodthattheprivatesectorwillbeinvitedbygovernmenttoinvestincriticalelectricitynetworkinfrastructure.Withoutlarge-scalecapitalformation,theenergytransitionwillnothappen.ThegrantscomponentoftheinternationalpledgestotheJETIP,whilstrelativelysmallinthelargerscaleofneed,isneverthelessasizablesumanditisbeingdeployedtoprojects.Furthergrantfundsarealsobeingpledged.Ananalysisofthisworktodaterevealsthatthereisopportunityforimprovedvisibilityanduseofthegrantfunds,particularlytoensurethattheyprioritisetheJustTransitionelementsoftheJETIPandmakeameaningfuldifferencetothelivesofcommunitiesandworkersimpactedbythedecarbonisationoftheeconomy.Itisvitalthatthegrantfundsarewelldeployedforthispurpose.TheJETProjects’RegisterwillcreatetransparencyandaccountabilityforwhereJETIPfinancingisused.ThefirstphaseofestablishingthisRegisterhasbeentoregisterallJETIPprogrammesandprojectsthatarebeingsupportedwithgrantfundingfromtheInternationalPartnersGroup(IPG)andotherdonorcountries.During2023,ithasalsobecomeevidentthatthesupplyofgrantfundsfortheJETIPoutstripstheoriginationandpreparationbySouthAfricansofwell-targetedprojects,andthatbetterco-ordinationisneededtooptimisethedeploymentofthesevaluableresourcesacrossthePortfolios.ThepropositionofamatchmakingJETFundingPlatformwillbetestedwithstakeholdersinaproof-of-conceptroll-outin2024,followedbythedesignandset-upofitsoperatingmodel.JETImplementationPlan2023–2027534.2TheoryofChangeTheTheoryofChangeisawidelyusedplanningandmonitoringmethodologythathelpsmanagementtoarticulateacoreproblemtobesolved,understandtheunderlyingcausesoftheproblem,specifytheimpactsthatneedtobeachieved,targetoutcomesandoutputs,anddefinetheinputstobeused.ThemethodologyisappliedbytheSouthAfricanGovernmentundertheleadershipoftheDepartmentofPlanning,MonitoringandEvaluation(DPME)andthusinformstheofficialframeworksfornationalandprovincialgovernmentstrategicplanningandAnnualPerformancePlans.AnoverallTheoryofChangehasbeencraftedtoguidetheworkoftheJETProjectManagementUnit(PMU)andtoformthebasisforperformancemonitoringoftheJETImplementationPlanasawhole.ThisispresentedinChapter11(Figure30),togetherwiththeindicatorsthatwillbeusedtomeasureoveralloutcomesandimpact(Table41).TheoriesofChangeandindicativeindicatorsofperformancehave,inturn,beenarticulatedasbaselinesforeachPortfolioandarepresentedinthesixPortfoliochaptersthatfollow,tobeadaptedbytherespectivePortfolio’sinstitutionalleadershipteamsastheirworkproceeds.Insummary,thenarrativeTheoryofChangeforoverallJETimplementationisasfollows:„Widerimpact(I):TheJETIPisaimingtoachievethetransitiontoalow-carbon,climate-resilienteconomyandajust,climate-resilientsocietybymid-century.Thiswillrequiretheenergytransition,withREdominatingtheenergymix(I01),andwithsignificantcutsingreenhousegas(GHG)emissions(I03).Theeconomywillneedtobediversified,takingaccountofopportunitiesforaJustTransitionaswellaswidereconomicdiversification(I04),withthebenefitsspreadingwidely,particularlyinprioritycommunities(I02).Therearealsomanyco-benefitsthatwillberealisedfromthetransition(105),rangingfromfreeingofwaterresourcesfordomesticuse,agriculture,andindustryfromtheclosureofcoalplants,reductioninairpollution,improvementsinroadconditions,toregenerationofmining-affectedland.Co-benefitsaredevelopedexplicitlyinthePMU’sTheoryofChange,highlightingtheimpactsofahealthysocietyandhealthyecosystems.„Medium-termoutcomes(MT)(threetofiveyears):Thechangesinperformancethatwillenablethisimpactoverthreetofiveyearsinclude:financeforJETIPbeingmobilised,deployed,andspentrapidlyandeffectively(MT01);widespreadsupportacrossnationalandinternationalstakeholderssothatinterventionsarecoherent(MT02);andgovernmentandnon-governmentstakeholdersincreasinglyabletomanageanddeliverJustTransitioninterventions(MT03).Anenhancedskillssystemthatisworkingeffectively(MT04)isneededtoensurethatskillsareavailabletosupportthetransition.„Short-termoutcomes(ST)(onetothreeyears):Additionalcapacityandsystemswillberequiredtoachievethisoverthenextonetothreeyears.Theremustbeanactivepipeline54JETImplementationPlan2023–2027Chapter4:ImplementingtheJETIPofprojectsthatarebeingsupportedovertheline(ST04),withanagreedportfolioofJustTransitioninterventionswhichcanleadtosystemicchanges,aswellasaddressingtransitionneeds,supportedbytheJETFundingPlatform(ST03).Theserequireagreedtransparentfundingflows(ST01),problem-solvingtoovercomechallenges(ST05),andeffectiveco-ordinationsystemsacrossgovernmentandwithnon-stateactorsensuringacoherentresponse(ST02).Theremustbedemonstrationofsufficientcompliantprogrammesandprojects(ST06)tobuildsupportfortheJETIPprocess.„ThetargetedJETPMUoutputsarelistedinFigure30,andtheinputsarefundspledgedorapprovedfortheJETIP,supportedbythePMU’srequiredcapacityandauthoritytofulfilitsmandateasarticulatedinsection4.3.4.3GovernanceandInstitutionalArrangementsTheJETIPreceivesitspoliticalmandatefromCabinet,whichin2022appointedanInter-MinisterialCommittee(IMC)tooverseethework.TheIMCischairedbytheMinisterofForestry,FisheriesandEnvironmentanditsmembersinclude:theMinisterinthePresidency;theMinisterofFinance;theMinisterofMineralResourcesandEnergy;theMinisterofPublicEnterprises;theMinisterinthePresidencyresponsibleforElectricity;theMinisterofTrade,IndustryandCompetition;theMinisterofInternationalRelationsandCooperation;andtheMinisterofScienceandInnovation.TheIMCmeetsasrequiredandatleastquarterly,reportingtoCabinet.TheMinisterofForestry,FisheriesandEnvironmentconvenesIMCmeetingswiththeIPGenvoysandotherfinancingpartnercountries,asandwhenrequired.In2023,thePresidencyestablishedaJETGovernmentSteeringCommitteeofseniorofficials.ThemandateoftheJETGovernmentSteeringCommitteeistoprovideoperationalleadership,guidance,andco-ordinationfortheimplementationoftheJETIP,andtomakerecommendationstotheIMC.ItischairedbytheDirectorGeneralinthePresidency,anditsmembersinclude:theNationalTreasury(NT);theDepartmentsofPublicEnterprises;Forestry,FisheriesandEnvironment;MineralResourcesandEnergy;Trade,IndustryandCompetition;InternationalRelationsandCooperation;ScienceandInnovation;HigherEducationandTraining;EmploymentandLabour;Planning,MonitoringandEvaluation;theMpumalangaOfficeofthePremier;DevelopmentBankofSouthernAfrica(DBSA);IndustrialDevelopmentCorporation(IDC);Eskom;andthePresidentialClimateCommission(PCC)Secretariat.TheJETGovernmentSteeringCommitteemeetsasrequiredandatleastquarterly.LocatedinthePresident’sProjectManagementOffice,theJETPMUisasmallmanagementteamcontractedin2023withaspecificmandatetodothefollowing:„ProvidearoadmapfortheimplementationoftheJETIP„Convenerole-playersandbuildpartnershipsforJETIPdeliveryJETImplementationPlan2023–202755„FindinnovativesolutionstoJETIPimplementationproblems„MobiliseandguidemultiplesourcesoffinancetoaddressJETIPneeds„EnsuretransparentmonitoringandevaluationofJETIPdeliveryandresults.TheJETPMUmustthereforeensurethatthepathoftravelforeachPortfolioisconfirmed,thatsuitablefinancingismobilisedfrommanysources(public,private,partnercountries,DevelopmentFinanceInstitutions(DFIs),MDBs,philanthropies),andthateachPortfolioisledbyaninstitutionwiththecapacitytomanagemultipleprogrammesandprojectsinvolvingmultiplestakeholders.Tothisend,theJETPMUprovidescorecross-cuttingenablerstosupporttheworkofeachPortfolio,inparticular:„OngoingliaisonwiththeIPGandotherpartnercountriestounlockfinancing„ThemanagementandpublicationoftheJETProjects’Register„ThedesignandmanagementoftheJETFundingPlatform„Themonitoringandevaluation(M&E)systemoftheJETImplementationPlan,withfeedbacktostakeholdersforcontinuousimprovement„ConsolidatednationalreportingonJETImplementationPlanprogressacrossallPortfolios„NationalandinternationalcommunicationsonthetheJETIPandtheJETImplementationPlan.EachPortfoliooftheJETImplementationPlanwillbechairedbyaleadinstitution.ExceptfortheElectricityInfrastructurePortfolio,eachotherPortfoliowillestablish(orexpandanexisting)JETCouncil/Forum/governingstructuretoleadandplantheJETPortfolio.Thesestructureswillcompriserole-playersfromgovernment,business,labour,andcivilsociety.TheinstitutionalarrangementistobecapacitatedbytheestablishmentofadedicatedJETSecretariatcompetencyforeachPortfoliotomanagetherespectiveworkstreams/programmesandmonitortheprojects,toliaisewiththeJETPMUforenablingsupport,andtofulfileachPortfolio’sM&Erequirements.ThespecificarrangementsperPortfolioaredescribedinthePortfoliochaptersoftheImplementationPlan.ThearchitectureofJETimplementationGovernanceandManagementisdepictedinFigure1.56JETImplementationPlan2023–2027Chapter4:ImplementingtheJETIPFigure1:JETImplementationPlangovernanceandinstitutionalarchitectureCABINETJETInter-MinisterialCommittee(IMC)JETGovernmentSteeringCommitteeProjectManagementOffice(PMO)inthePresidencyJETProjectManagementUnit(PMU)JET(Portfolio)SecretariatJET(Portfolio)Council/Forum/CommitteeLeadinstitutionChairedbytheleadinstitutionwithmultiplestakeholdersasmembersGeneric–adaptedforeachPortfolioasdescribedintherelevantchaptersoftheImplementationPlanWORKSTREAMSWorkstream/ProgrammeWorkstream/ProgrammeWorkstream/ProgrammeRelevantinstitutionalownerRelevantinstitutionalownerRelevantinstitutionalownerStakeholdersStakeholdersStakeholdersProjectsProjectsProjectsMultipleprojectswithowngovernanceandmanagementJETImplementationPlan2023–2027574.4JETProjects’RegisterTheJETPMUhascreatedaJETProjects’Register.WorkingwiththeIPGandotherpartnercountries,thefirstphaseofbuildingtheRegisterhasbeentodocumentallthegrantallocationsthathavebeenmadebytheinternationalpartners,perPortfolio,sinceNovember2021whenthePoliticalDeclarationwassignedbetweenSouthAfricaandtheIPGatCOP26.TheJETProjects’Registerdatafieldsinclude:grantpurpose;sourcegroup;activities;implementinginstitution/s;funder;Forexsum;duration;datesforpreparation/start/end;source;partiestotheagreement;beneficiaries;keytermsandconditions;disbursementstatus;projectdescription;andcontactdetails.Fromthis,ithasbeenpossibletoanalyse:thetotalgrantfundingperdonor;theamountpersourceandpurpose;theamountperPortfolio;theamountperpurpose;theamountperstatus;andtheamountperimplementor,amongstothers.ThedatawillbeupdatedquarterlyandpublishedonthePresidencywebsite.Itwillbeexpandedinduecoursetoincludeprojectsinvolvingconcessionalandcommercialfinancingfrominternationalpartners,withpotentialtoalsorecordcontributionsfrominternationalphilanthropiesandtheSouthAfricanprivatesector.TheJETProjects’RegisterwillshowcasethedevelopmentoftheJETprojectspipelineperPortfolio,andisakeybuildingblockforboththeJETFundingPlatformandmonitoring,evaluation,andlearning(MEL)system.4.5JETFundingPlatformTheJETPMUwillestablishaJETFundingPlatformin2024,initiallyinaproof-of-conceptphase,followedbyanoperatingmodeldesignandresourcing.Thelonger-terminstitutionallocationofthisJETFundingPlatformwillbewidelyconsultedandinvestigatedduringtheproof-of-conceptphase.ThepurposeoftheJETFundingPlatformisto:„BeamatchmakerbetweensuppliersofgrantfundingandpotentialJETbeneficiaries„ProvideprojectpreparationsupportservicestoJETprojectoriginatorstohelpthemprepareplansandapplyforgrants„ProvidethepublicwithtransparentdataandanalysisonthedeploymentofgrantfundstoJETprojects.58JETImplementationPlan2023–2027Chapter4:ImplementingtheJETIPTheJETFundingPlatformwillnotbea‘fundoffunds.’Rather,itistobeaserviceofferedbytheJETPMUthatbringstogethertheprovidersofgrantfundingforJETwiththeintendedbeneficiaries,andwillgivethelatterassistancetopreparetheirapplicationstotheprovidersofgrants.TheJETFundingPlatformwillrecommendJETprojectstotheprovidersofgrantfunding.Itwillnotplayaroleingrantapprovals.Eachgrant-maker’sinternalapprovalprocedures,reporting,andmonitoringwillcontinueinthenormalcourse.Grant-makersincludetheIPGmembers,otherdonorcountries,MDBs,DFIs,philanthropies,andcorporates.InadditiontotheinternationalgrantfundingbeingmadeavailablefortheJETIP,thereisconsiderablecorporatesocialinvestment,skills,andenterprisedevelopmentfundingthatcouldbemobilisedfortheJETIP.Grant-makerswithamandatetosupporttheJETinSouthAfricawillbeinvitedtobecomemembersoftheJETFundingPlatformandtomaketheirgrantfundinginformationavailableontheJETPMU’spublicplatform.TheJETGrantProjects’Register(seesection4.4)willbefurtherdevelopedforthispurpose.Figure2:JETFundingPlatformJETJETJETFundinggrantfundersFundingPlatformPlatformbeneficiariesIPGMatch-makingDFIsMDBsSMMEsTradeunionsPhilanthropiesCorporatesCBOsGovernmentNGOsinstitutionsSupplyDemandJETFundingPlatformprojectpreparationsupportservicesCh4Fig2ImplementingJETImplementationPlan2023–202759GrantfundingisrequiredforawiderangeofJETIPneeds,mostimportantly,toensurethattheenergytransitionisachievedinamannerthatisjust.ThefollowingarekeyfocusareasfortheuseofgrantfundingundertheJETIP:„Socialandeconomicsupporttocommunitiesandworkerswhoselivelihoodsareaffectedbycoalpowerplantandcoalmineclosures,andbythetransitiontoelectricvehicles„Community-levelplanningfortransitioningoutofcoaldependencyandintoneweconomicopportunities„EconomicdiversificationplanningandnewinvestmentpromotioninMpumalanga„Start-upcapital(combinedwithdebtandequity)fornewenterprisesintransitioningcoalregions„Creditenhancement/firstlossfundingforsmall,mediumandmicroenterprises(SMME)loanfundsinMpumalanga„Reskillingandupskillingfornewworkopportunitiesinthegreeneconomy,includingRE,GH2,andNewEnergyVehicles(NEVs)„PilotingofREcommunityownershipmodels„Technicalassistanceforprojectpreparation„Researchandinnovation„CapacitybuildingforstateinstitutionsmandatedtodriveJEToutcomes„Intermediaries’supportforcommunitydevelopmentinitiativesinMpumalanga„Capacitybuildingforcommunity-basedorganisationsandtradeunionsinMpumalanga„Stakeholderconsultationsandinclusivedecision-making„MonitoringandevaluationoftheJETimplementation.TheneedforaJETFundingPlatformhasarisenfromarecognitionthat,todate,grantfundingforJEThaslargelybeenusedforup-streamtechnicalassistanceandcapacitybuilding,withlimiteddirectbenefitsaccruingtocommunitiesandworkersthatneedtotransitionfromcoal-dependenciesintoalternativesourcesofincome.Thereisapressingneedfordemand-ledskilling,entrepreneursupport,local-benefitrenewablesprojects,anddirectbenefitsforimprovedlivelihoods.Asubstantialportionofgrantfundingstillgoestointermediaries.ThisstatusquoispartlybecausetargetedinitiativesfortheJETarearelativelynewfocusfordonorfundinginSouthAfrica,butmostlybecauseSouthAfricans’projectpreparationforthiscomplexworkislargelyinadequate.Thereisalsoduplicationandnon-alignmentbetweensomesimilar/overlappingdonor-fundedinitiatives.Itisincreasinglyevidentthataplatformforco-ordinationandanalysisofgrantfundingdeploymentwouldhelptooptimisetheuseofthesevaluableresources.60JETImplementationPlan2023–2027Chapter4:ImplementingtheJETIPTheJETFundingPlatformwillbedesignedtobelow-administration,agile,transparent,andcost-effective.ItwillbeginwithafocusonMpumalangaprojects,particularlyduringtheproof-of-conceptstage,andwillexpandtonationwideapplicationthereafter.Toensurethatmultiplestakeholdersmakeongoingcontributionstothiswork,aJETFundingPlatformAdvisoryBoardwillbeestablished.TheJETPMUwillinvitethePCC,aswellasthegrant-makingmembersoftheJETFundingPlatform,tonominateAdvisoryBoardmemberstoservethree-yeartermsofoffice.TheAdvisoryBoardwillbebroadlyrepresentativeofgovernment,business,tradeunions,andcivilsocietyorganisations.TheAdvisoryBoardappointmentproceduresandtermsofreferencewillbedevelopedduringtheproof-of-conceptphaseinearly2024.4.6AdditionalJETPortfoliosThreenewPortfoliosdescribedbelowwillbeaddedtotheJETImplementationPlanin2024.ThesePortfoliosholdpotentialnotonlytoboostSouthAfrica’sdecarbonisationtrajectory,butalsotodiversifyeconomicactivityandcreatenewsourcesofemploymentandskillsdevelopment.4.6.1SouthAfricanRenewableEnergyMasterpan(SAREM)TheSAREMalignsdirectlywiththeJETIPprioritiesinREgeneration,repurposing,andrepoweringofretiringcoalplants,thedevelopmentoftheGH2andNEVsectors,skillingoftheworkforcefortheREandbatteryvaluechains,andinmultiplefacetsoftheJustTransitioninvestmentsneededforeconomicdiversificationincoal-dependentregions.TheboomingREmarketpresentsbothdemand-andsupply-sideopportunitiesforSouthAfrica’seconomicdevelopment,employmentcreation,andsocialtransformation.Leveragingexistingindustrialvaluechains,manufacturingandservicecapabilitieshavethepotentialtogrowlocalskillsandjobs,andtosupporttheinclusiveroll-outofREtopoorhouseholds.However,thecurrentREandbatterystoragemarketisprimarilydrivenbyimportsofsolarpanels,batteries,inverters,turbines,cables,andinputmaterials.ThedraftSAREMnotesthat,combinedwithbroadindustrialcapabilitiesinconnectedorrelatedvaluechains(suchassteel,aluminium,capitalequipment,andelectro-technicalequipment),theeconomydisplayswide-rangingdomesticcapacitytosupplytheREandbatterysectors.Assuch,12catalyticinterventionsformthebackboneoftheSAREM,whicharesummarisedinTable4andarebeingpreparedbytheDepartmentofMineralResourcesandEnergy(DMRE)forimplementationin2024.JETImplementationPlan2023–202761Table4:SAREMpillarandcatalyticinterventionsSAREMObjectiveInterventionpillarSupportingClarifythemarketPublishandupdatequarterlythepipelineofpublicprocurement(e.g.demandforREandstorageREIPPPP,EnergyStorageIndependentPowerProducerProcurementProgramme(ESIPPPP),DepartmentofPublicWorksandInfrastructure(DPWI),provinces,andmunicipalities)forREandstoragetechnologiesPublishandupdatequarterlythepipelineofprivateprocurement(large-,medium-,andsmall-scaleprojects)forREandstoragetechnologiesDrivingEstablishclearEstablishaconsistentsetoflocalcontenttargetsandcriteriaforfuturepublicandprivateprocurementprogrammesindustriallocalisationdevelopmentobjectivesAlignindustrialReactivatethe12itaxallowanceincentivewithafocusonsupportingthepolicyanddevelopmentofREandbatterymanufacturingvaluechainsprogrammeswithREandstorageAlignexistingpublicsectorprogrammesandpolicysupportwithlocalisationtheSAREM’slocalisationobjectives(e.g.EnergyResilienceScheme,IndustrialDevelopmentCorporation(IDC)funding,DepartmentofSmallBusinessDevelopment(DSBD),EnergyBounceBackLoanGuaranteeScheme,andmunicipal/provincialprocurement)FosteringEstablishclearDevelopandimplementB-BBEEsector-specificscorecardforREandstorageinclusivetransformationdevelopmentobjectivesFosterintegrationDevelop,resource,andestablishaTransformationFundtosupportnewofemergingentrantsinthevaluechain(e.g.competitiveratesforfactoryinvestmentsupplierscapital,aswellaswarrantees/guarantees)DirectREandLaunchpublicprocurementroundsforREandstorageforMpumalangastorageactivitiestoandotherJThotspots(basedongridavailability),notablyleveragingJThotspotsRenewableEnergyDevelopmentZones(REDZs)DriveinclusiveLaunchasolarPVroll-outprogrammeforschools/clinics/etc.,basedonroll-outofREandpanelsreplacedbylargeprojectsstorage62JETImplementationPlan2023–2027Chapter4:ImplementingtheJETIPSAREMObjectiveInterventionpillarBuildingtheMapandbuildskillsDevelopandrunadigitalmatchmakingplatform(i.e.PowerUp)betweencapabilitiesindustry,educationproviders,andsocialcompactpartners,creatingademand-ledskillsandplanningcommunicationhubtoaddressskillsprioritiesinthesectorActivateskillsConsolidateandexpandinternshipprogrammes/opportunitiesintheREandstoragesector,e.g.byparticipatinginYes4YouthFostertechnologyEstablishamatchmakingplatformbetweeninnovatorsandpossiblecommercialisationuserstoacceleratetheadoptionofnewREandstoragetechnologies,alongwithaninnovativefundingmodelforde-riskingcostsofrunningtrialsThedevelopmentoftheSAREMsince2021hasbeenaco-creationprocessinvolvinggovernment,industry,andlabourrepresentativesintaskteams,bilateralengagements,publicmeetings,andwrittensubmissionscontributingtoabroadlyagreedplanforimplementationbyvariousentities.AdedicatedSAREMPMUwillberesponsiblefordrivingandoverseeingimplementation.Costingofinterventionswillbedoneoncetargetsareestablishedandcommitmentsarefinalised.AnnexureAtabulatesopportunitiesformobilisingJETIPfinancinginsupportofthecatalyticinterventionsidentifiedbytheSAREM.Thesewillbedevelopedintofocusareasforinvestmentsduring2024.JETImplementationPlan2023–2027634.6.2EnergyEfficiencySinceelectricityshortagesandsteeppricerisesbeganadecadeago,theSouthAfricanbusinesscommunityhasadoptedcertainenergyefficiencymeasures.Thereis,however,farmorethatcanbedonetoimproveenergyefficiencyacrossallsectorsoftheeconomy.EnergyefficiencymeasuresnotonlyplayakeyroleinloweringdemandinSouthAfrica’selectricitysupply-constrainedenvironment,butalsoresultinanetsavinginGHGemissions.Unlikedemand-sidemanagementmeasures,whichareusedtocurtailuse,energyefficiencyallowsusetocontinue,onlymoreefficiently.AJETPortfolioonEnergyEfficiencywillfocusinterventionsinthefollowingprogrammes:„Governmentbuildings„Commercialbuildings„Largeindustry„Smallandmediumenterprises„Households„Standardsforappliancesandbuildings.Workisunderwayinalltheseareas,ledbyanumberofexperiencedinstitutionsinSouthAfrica.Theintentionwillbetomobiliseinternationalfinancing(grants,concessionalloans,andtargetedcommercialloans)undertheauspicesoftheJETIP,tosupporttheseeffortsandtoscaleuptheenergyefficiencyoutcomes,trackingtheGHGsavingsachieved.4.6.3Road-to-RailSouthAfricahasarelativelyextensiverailinfrastructurenetwork,themaincorridorsofwhichareelectrified,buttheuseofrailforthetransportofgoodsandpassengershasdeterioratedovermanydecades.Combinationsofsectormarkettrends,nationalroadsquality,pricing,sectorpolicies,regulationandderegulation,institutionalreforms,andstatecompanymanagementchoiceshaveresultedinever-decliningrailmarketshare.Anumberofinitiativeshavebeenmootedandtriedforrailvolumesimprovement,butspecificroad-to-railstrategiesforbothfreightandpassengershavenottakenhold,andthechallengeofachievingasustainedmodalshiftremainselusive.Thesocial,economic,andenvironmentalbenefitsofoptimisingtheuseofrailarewellknown.Tothisend,effortstoachievesystemicchangeinthemodalchoicesoftransportuserswillcontinue.GiventheGHGsavingsthatrailtransportcanachieverelativetoroadtransport,theroad-to-railagendaremainsanimportantelementofSouthAfrica’senergytransition.However,thecomplexitiesandcostofachievinglastingroad-to-railresultsshouldnotbeunderestimated.64JETImplementationPlan2023–2027Chapter4:ImplementingtheJETIPToidentifyrail-friendlycargo,eachfreightflowsegmentismeasuredforproductuniformity,terminaldensity,linedensity,distance,value,andtime.Intheir2021reportforSA-TIED8,theresearchersrecordthatin2019,22%oftonne-kmthatcanbestbeservedbyrail,and35%oftonnes,wasservedbyroad,addingsignificantdirectlogisticscostsandexternalitycoststotheeconomy.Ofthetotalgeneralfreightmarket,railshouldhavedelivered47billiontonne-kmin2019,butdeliveredonly18billiontonne-km,leavingagapofnearly30billiontonne-km.Thisrailabletargetforgeneralfreightisestimatedtogrowto77billiontonne-kmby2050,meaningthatmodalshiftsuccesswillrequirethegeneralfreightrailwaytomorethanquadruplefromitscurrentsize.Inpassengerrail,thedeclineinlong-distanceandcommuterrailnumberswaslargelydrivenbyderegulationoftheairlineindustryandcost-effectiveflights,togetherwiththeaccessible,relativelyinexpensive,door-to-doorservicesofferedbytheprivateminibustaxiindustry.Combinedwithunreliable,unsafe,andpoor-qualitypassengerrailservices,thereisnowlittleleftofthestate-ownedpassengerrailbusiness.ThePresidencyhasrecentlyestablishedaNationalLogisticsCrisisCommittee(NLCC)toarresttheeconomicimpactofthepoorlyperformingportsandfreightrail.ReformmeasuresemanatingfromtheNLCCincluderaileconomicregulationandtheintroductionofprivateoperatorsonthefreightrailnetwork.Ifsuccessful,thesereformscouldresultingreateruseofrailforrail-friendlycargo.Significantpolicyandregulatoryreformsareneededfortherevitalisationofpassengerrailassets.TheJETPMUwillworkwiththerelevantinstitutionsin2024todevelopaPortfolioofroad-to-railinitiativesthathavethehighestprospectofloweringtransportsectoremissions,andwhichcanattractconcessionaryclimatefinanceforinvestment.8Havenga,J.H.,deBod,A.,Simpson,Z.P.,Swarts,I.E.,&Witthöft,I.E.(2021).Aproposedfreightandpassengerraid-to-railstrategyforSouthAfrica.SouthernAfrica-TowardsInclusiveEconomicDevelopment(SA-TIED).JETImplementationPlan2023–202765AnnexureA:OpportunitiesforJETIPinvestmentsinthecatalyticSAREMinterventionsSAREMpillarDescriptionofTypeofinstrumentsSupportinginterventionConceptsthatwouldbealigneddemandSupportCreditinstrumenttooffsetlocalGuaranteesDrivingdemandmanufacturingriskOrdersindustrialoflocallyConcessionaldebtdevelopmentmanufacturedSupporttointegrateSouthAfricanGrantsREandbatterymanufacturedgoodsintoexportFosteringstoragemarkets(directdemand)inclusivecomponentsdevelopmentInstrumentstosupportprivatesectoroff-takeoflocalcomponentsSupport(concessionalloans)forthedevelopmentofphysicalandmarketinfrastructure(alreadyinJETIP)FundingforenergysecurityinindustrialparksSupportlocalCapitalforfactoriesHighriskcapitalmanufacturingExportcreditassistanceExportcreditassistanceReviewqualitystandards(Tier1Granttoreviewstandardsordefinition)encouragesupplychainintegrationSupportintegrationofnewConcessionalcapitalforenergymanufactureintosupplychainssecurityforindustrialpurposesandcompetitivenessFundingandtechnicalpartnershipsfortestingandcertificationfacilitiesTradeandinvestmentagreementsBilateralpartnership(SA-USA,SA-StrategicpartnershipsEU)aroundtradeandinvestmentSupportbroad-ConcessionalcapitalforpreviouslyGrantsbasedinclusionmarginalisedgroupsorregionsHighlyconcessionalfinanceaffectedbythetransition(JETGuaranteeshotspots)TransformationfundfornewentrantsReducingbarrierstoentrythroughinformationDirectsupportforprojectsinvolvingschools/clinicsaswellaslow-incomehouseholdsandcommunity-ledownership66JETImplementationPlan2023–2027Chapter4:ImplementingtheJETIPSAREMpillarDescriptionofTypeofinstrumentsinterventionConceptsthatwouldbealignedBuildingtheGrantscapabilitiesMapandbuildSupportformatchmakingTechnicalassistanceskills,activateprogrammes,i.e.PowerUp,Early-stageconcessionalcapitalskillsbroadeningexistingskills(smallticketsize)programmes(Yes4YouthorStrategicpartnershipsCommercialiseHarambee)technologyDedicatedcommercialisationplatformsFundingforde-riskingtechnologytrialcostsFundingandtechnologypartnershipforManufacturingTechnologyCentreandSolarResearchFacilityStrategicpartnership(includingoriginalequipmentmanufacturers(OEMs)forTechnologyTransferSystem)JETImplementationPlan2023–20276768JETImplementationPlan2023–2027Chapter5:ELECTRICITY69PURPOSEThepurposeofthischapteroftheJETImplementationPlanisto:„identifyhowconcessionalandcommercialfinancewhichisavailablefortheJETIPcansupportthecriticalinvestmentsthatareneededinSouthAfrica’selectricityinfrastructureforthecountrytotransitionfrompredominantlycoal-basedpowergenerationtoincreasinglevelsofdistributedRenewableEnergy(RE)generation„articulatethechallengesthattheJETImplementationPlanfacesinunlockingtheflowsofbilateralconcessionalloanfinancingwhichareavailablefortherequiredcapitalinvestmentstobemade,andsuggesthowthesecanbeovercome„articulatetheimportantfinancingrolethattheprivatesectorisplayingintheelectricitysectortransition„setoutpracticalroadmapswhosemilestoneswillenabletargetedshort-andmedium-termoutcomestobemet.5.1ContextSouthAfrica’selectricitysectoriscentraltoitseffortstoestablishalow-carboneconomy.Electricitygenerationaccountedfor43%ofthecountry’sgreenhousegas(GHG)emissionsin2000and45%in2020.Themajorityoftheseemissionsaregeneratedby15coal-firedpowerplantsownedbyEskom,mostofwhicharenon-compliantwithairqualityemissionsstandards,andnineofwhichwillreachtheendoftheirdesignlivesbetween2022and2034.SouthAfrica’sabilitytomeetitsdecarbonisationgoalswilldependonitsabilitytomanageaplannedandintegratedprogrammeoffourparallelefforts:„Large-scaleanddistributedRenewableEnergy(RE)generation„Large-scaletransmissionnetworkextension„Widespreadupgradesofdistributionsystems70JETImplementationPlan2023–2027Chapter5:Electricity„Retiringcoal-powerplantdecommissioning,repurposing,andrepoweringthatdoesnotdisruptelectricitysupply,andwhichproactivelysupportsaffectedworkers,communities,andvaluechainstotransitionintoneweconomicopportunities.Thishugetaskmustbemanagedinthecontextoftheongoingelectricitysupplycrisis,loweconomicgrowth,highlevelsofpoverty,unemployment,andinequality,andnofiscalcapacitytoborrowforcapitalinvestmentsofthescalethatisrequired.5.2ElectricityGenerationToresolvetheelectricitysupplycrisisandmeetSouthAfrica’sNationallyDeterminedContribution(NDC)targetsandlong-termdecarbonisationobjectives,theJETIP2023-2027calculatesthataround6GWofnewrenewableelectricitycapacityneedstobeaddedtothegrideachyearoverthisperiod,inadditiontogas/storagecapacity.Theestimatedcostofthisfive-yearinvestmentisZAR233.4billioninsolar,ZAR241.7billioninwind,andZAR23.1billioninbatterystorage,totallingsomeZAR498billion.TheJETIPtargetsthisinvestmenttobemadebytheprivatesector,largelythroughtheRenewableEnergyIndependentPowerProducerProcurementProgramme(REIPPPP).EnabledbySouthAfrica’sfar-reachingelectricitysectorreformsandtheelectricitysupplycrisis,thedecarbonisationofelectricitygenerationcouldhappenatscaleinthecomingyearsthroughtheroll-outofleast-costREtechnologies.Between2010and2021,solarphotovoltaics(PV)costsinSouthAfricareducedby88%(nowZAR0.375perkWh)andonshorewindby68%(nowZAR0.344perkWh),andthecontributionofREtototalelectricitygenerationinterawatthoursincreasedtoabout7%in2022.9Eskom,incollaborationwiththeSouthAfricanWindEnergyAssociation(SAWEA)andtheSouthAfricanPhotovoltaicIndustryAssociation(SAPVIA),recentlyreleasedthe2023SouthAfricanRenewableEnergyGridSurveyresults,whichreportsonSouthAfrica’sREdevelopmentpipelineanditspotentialimplicationsforgridplanningandinvestment.Thesurveyresultsindicatethat66000MWofREgenerationprojectsareatvariousstagesofdevelopment,ofwhich18000MWareatanadvancedstageofprojectpreparation(thatis,environmentalapprovalsgranted,sitemeasurementcampaignandfeasibilityworkcompleted,andapowerpurchaseagreementsigned/closetosignature,ortheprojectisreadytoparticipateinthenextREIPPPPbidwindow).ProjectsintheadvancedstageofpreparationcanbeoperationalwithinthreeyearsifgrantedagridconnectionbyEskomorthemunicipality.9SouthAfricanRenewableEnergyMasterplan(SAREM)(Draftversionforreviewdated7July2023).JETImplementationPlan2023–202771ThismeansthatprivatesectorinvestmentofsomeZAR300billioninREgenerationispossibleMWoverthenextfiveyears.Thesignificantchallengetoexecutionisthecapacityofthetransmissionanddistributiongridstotransmitanddistributethepower.Figure3illustratesthehighgrowthinlarge-scaleprivatepowerprojectssincethepolicyreformsof2021and2022.Figure3:2023SouthAfricanRenewableEnergyGridSurvey140013001200110010009008007006005004003002001000MAR2021APR2021MAY2021JUN2021JUL2021AUG2021SEP2021OCT2021NOV2021DEC2021JAN2022FEB2022MAR2022APR2022MAY2022JUN2022JUL2022AUG2022SEP2022OCT2022NOV2022DEC2022JAN2023FEB2022MAR2023APR2023MAY2023JUN2023JUL2023AUG2023SEP2023UtilityscaleMW>10Distributedgeneration1<MW<10SSEGMW<1TheoutlookforREgenerationinvestmentbytheprivatesectorispositivewhenconsideringthefollowing:„ChThepolicyreformsof5FigAugust2021and3ElectricityDecember2022,whichpromotescaleinprivateelectricitygeneration„Government’sachievementsthroughtheNationalEnergyCrisisCommittee(NECOM)andOperationVulindlela,workingwithEskom,theregulatorsanddevelopers,inaddressingbottleneckstoREprojectdevelopments„Plannedprocurementofover14000MWofnewgenerationcapacityfromwind,solarPV,andbatterystoragethroughthemostrecentMinisterialdetermination,includingtheimminentreleaseofBidWindow7oftheREIPPPP72JETImplementationPlan2023–2027Chapter5:Electricity„Municipalsupportforsmall-scaleembeddedgeneration(SSEG)installations(generallycombiningsolarPVandbatterysystems)inresidentialandcommercialproperties„Taxincentivesandfinancingmechanismsfortheinstallationofsolarpanelsbybusinessesandresidents„TheSouthAfricanRenewableEnergyMasterplan(SAREM)initiativestopromotelocalisationofmanufacturingforREtechnologiesandbatteries,alongsideinvestmentinREskillsdevelopmentbytheprivatedevelopers„Scale-upincapitalallocationfromlocalfinanciersasfinancingmodelsfromtheREIPPPPprocessareappliedinfundinglarge-scaleprivatepowerprojects.ThefollowingenablersareimportanttosupportandexpandinvestmentinREgeneration:„Urgentinvestmentintransmissioninfrastructure:InthelastREIPPPPbidwindowforREgenerationprojects,over3GWwasnotapprovedbecausethenetworkoftransmissionlines,sub-stations,anddistributionlinesthatdeliverelectricityfromthelocationofgenerationtobusinessesandconsumerswasinsufficient.Thisholdsespeciallyforthehigh-capacity,long-distancetransmissionlinesandsub-stations.10Thetransmissioncapacitychallengeisnowahighpriorityfocusforgovernment.Optionsforscalinguptransmissioninfrastructureinvestmentaresetoutinthesectionsbelow.„Distributioninfrastructure:Continuedgrowthinsmall-scaleandutility-scaleembeddedgenerationwillonlybeviableifdistributiongridsareappropriatelyupgradedandmaintained.Importantly,abouthalfofalldistributiongridsarecurrentlyownedandmaintainedbythe165licencedmunicipalities,forwhichtheJETIP2023–2027estimatesaninvestmentrequirementofaboutZAR273billion.ThemunicipalchapterofthisImplementationPlan(Chapter10)proposesanapproachtoaddressthischallenge.Eskomownsandoperatestheremainderofthedistributionnetwork,withnewdistributioninfrastructureinvestmentrequirementsestimatedbytheJETIP2023–2027forbothEskomandmunicipaldistributionsystemsatZAR127.5billionbetween2023and2035.„Wheelingframework:Thedevelopmentandapprovalofanationalwheelingframework,aswellasappropriatesystemstoenablewheelingofelectricityatmunicipallevel,isanessentialenablerforelectricitygenerators,electricitytraders,andconsumers.ThisworkisbeingledbyNECOM,andadraftwheelingframeworkhasbeensubmittedtotheNationalEnergyRegulatorofSouthAfrica(NERSA)forconsiderationfollowingextensivestakeholderandindustryconsultation.„Acompetitivemarketforelectricity:GovernmenthassubmittedtheElectricityRegulationAmendment(ERA)BilltoParliament,whichwillsupporttherestructuringofEskomandestablishacompetitivemarketforelectricity.This,togetherwiththeestablishmentofamarketoperator,thedevelopmentofamarketcode,andthecreationofthenecessary10ExtractfromBetterFinance,BetterGrid,areportbytheBlendedFinanceTaskForce,2023.JETImplementationPlan2023–202773systemsandplatforms,willenablesignificantlylargerinvestmentinnewgenerationcapacityoutsideoflong-termbilateralPowerPurchaseAgreements(PPAs).„LocalmanufacturingofREtechnologiesandbatteries:ThisisledundertheauspicesofSAREMandsupportedbykeyinitiativesbeingplannedbygovernmentandlocalDevelopmentFinanceInstitutions(DFIs).TheSAREManditsforthcomingroadmapisanopportunityforfuturefinancingthroughJETIPpledgesfrominternationalpartners,DFIs,andMultilateralDevelopmentBanks(MDBs).„SocialownershipofRE:ThereisapressingneedtoensurethatthebenefitsofREgenerationimpactsthelivesoflow-incomehouseholds.Variousownershipmodelsandmicro-gridtechnologiesareatpilotingstages.Thesemustbescaledwherefeasible,requiringappropriatefinancing.Withgovernment’spolicyeffortsandtheprivatesector’sfinancialcapacitynowfocusingonresolvingthesechallenges,therearegoodprospectsofunlockingtherequiredscaleofREinvestmentsoverthecomingdecadeandwitnessingthedevelopmentoflocalmanufacturinginthevaluechain.Combinedwithaprogrammedschedulingofoldcoalplantdecommissioning,repowering,andrepurposing,SouthAfricacanbegintodemonstratethedecarbonisationofitselectricitysystem.Furthereffortsareunderwaytoexpandbatterystoragecapacity.TheDepartmentofMineralResourcesandEnergy(DMRE)issuedthefirstRequestforProposals(RFPs)withinitsEnergyStorageIndependentPowerProducersProcurementProgramme(ESIPPPP)on7March2023.ESIPPPP1aimstoprocure513MWofcapacityandancillaryservicesintheNorthernCapewherethesub-stationsformingpartoftheprogrammearelocated.Theseeffortsarecrucialforachievingasustainableandreliableelectricitysupplywhilereducingthecountry’sdependenceonfossilfuelsandaddressingclimatechangechallenges.ESIPPPP2iscurrentlyindevelopmentandwillprocureafurther1231MWofbatterystoragecapacityinareaswhereadditionalstoragewillcontributemosteffectivelytounlockingnetworkcapacity.ThebankabilityoftheESIPPPPissupportedbyhavingsimilarattributestotheREIPPPPandisthusabletomobiliseprivatecapital.ThetariffwithinthePPAwillremainsubjecttoNERSAapproval.Thedevelopmentperiodforthiscapacityisexpectedtotakelessthan24monthspost-commercialclose.Biddersmustaddresseconomicdevelopmentobjectives,including,amongstothers:jobcreation;localcontent;managementcontrol;skillsdevelopment;enterpriseandsupplydevelopment;andsocio-economicdevelopment.Inaddition,EskomisimplementingitsBatteryEnergyStorageSystem(BESS)programme,whichwillprocure199MWofbatterystoragecapacityinphase1and144MWinphase2.Construction74JETImplementationPlan2023–2027Chapter5:Electricityofseveralprojectsisalreadyunderway,withallphase1sitesplannedtobecommissionedbyDecember2023andphase2byDecember2024.OftheUSD8.5billion(equivalenttoZAR148billion)oftheInternationalPartnersGroup’s(IPG’s)financingpledgestotheJETIP,thethreefacilitiessetoutinTable5areabletosupportprivatesectorREgenerationprojectsandshouldbeabletocatalysefurthersourcesoffinancing.ThethreeIPGfinancingfacilitieslistedinTable5arealsosuitedtosupportingthedevelopmentofbatterystorageprojects,andtocatalysingothersourcesoffinancingfortheseinvestments.Table5:InternationalPartnersGroup(IPG)pledgessuitableforREgenerationLenderFacilityInstrumentDescriptionDevelopmentFinanceUSD1000millionCommercialDebt,guaranteesand/orpoliticalriskinsuranceCorporation(DFC)(USA)loansforprivatesector-ledprojects,withupto30%directequityorfundstransactionincompaniesorfundsAdditionalitycriteriaBritishInternationalUSD500millionCommercialEquity,debtandguaranteesInvestment(BII)(UK)andfacilitiesAdditionalitycriteriaPrivateInfrastructureDevelopmentGroup(PIDG)UKEuropeanInvestmentEUR200millionCommercialEIBcontributiontoDBSA’sEmbeddedBank(EIB)loansGenerationInvestmentProgrammethatisco-financedbytheGreenClimateFund5.3ElectricityTransmissionThecurrentelectricitytransmissionnetworklackstherequisitecapacitytoaccommodatetheplannedscaleofREgenerationwhichisscheduledforgridintegrationintheupcomingyears.11Inparticular,theconcentrationofoptimalREresourcesintheNorthernCapeandEasternCapeisnotmatchedbythegridcapacityneededtotransmitthispoweracrossthecountry.SouthAfricaisconfrontedwiththedauntingtaskofconstructingapproximately1500kmofnewtransmissionlinesannuallyoverthenextdecade.ThisistenfoldtheaveragekilometresoftransmissionlinesthatEskomhasbuiltinthepastthreeyears.Overthepastdecade,Eskomhasprocuredandconnected4347kmoftransmissionlinesand19GVAoftransformercapacitytoenabletheintegrationofpowerproducersfromrounds1–5oftheREIPPPP.ThisisnotatafastenoughpaceorscaletoaddresstheelectricitysupplycrisisormeetSouthAfrica’s11Eskom,SAWEA,SAPVIA.(2023).SouthAfricanRenewableEnergyGridSurvey.JETImplementationPlan2023–202775decarbonisationcommitments.TheREIPPPPBidWindow6in2022wasseverelycurtailedbythelackofgridconnectioncapacity.Eskom’sTransmissionDevelopmentPlan(TDP)estimatesafinancingshortfallfortransmissioninfrastructureofaboutZAR250billion.Atthislevelofinvestment,14000kmofnewpowerlinescanbeaddedby2032atayearlyrateof1500km,upfromacurrentyearlyrateofonly300km,aswellastheinstallationof122600MVAofnewtransformationcapacity,representing77%ofEskom’scurrentinstalledbase.However,anumberofchallengesareidentifiedintheTDP,includingEskom’sliquidityposition,thecostanddelaysassociatedwithlandacquisition,equipmentprocurement,environmentalapprovals,construction,andthesubstantialup-frontcapitalrequirementsforlong-termreturnsunderuncertaintariffdeterminationsbyNERSA.TheTDPidentifiesthat16.6GWofgridcapacityforrenewablegenerationcanbeunlockedbytransformerinvestments.EnabledbytheEskomdebtrelieffromNationalTreasury(NT),Eskomtransmissionhassecuredcapitalprojectsexpenditureapprovalsfortheperiod2023/24to2025/26.TheseinvestmentsarebeingmadewithinEskom’soperatingcashflowaffordabilitywithoutborrowing,inaccordancewiththedebtreliefconditions.However,theapprovedinvestmentsfallsignificantlyshortofmeetingthenationalrequirement.Theestimatedfinancinggapfortransmissioninfrastructureunderscorestheneedtomobiliseothersourcesoffinancingandothertransmissionprojectexecutionmodels.Thereisalsoincreasingrecognitioningovernmentthatprivateinvestmentintransmissionisnotonlyneeded,butthatthereareprovenmodelsapplicableintheSouthAfricancontextwhicharesuccessfulelsewhere.Furthermore,privateinvestors,DFIs,andMDBshaveconfirmedtheirwillingnessandcapacitytoparticipateinbothtransmissionanddistributioninfrastructure.GiventhechallengesidentifiedintheTDP,coupledwiththedebtreliefconditionsthatplaceamoratoriumonEskomborrowingintheshortterm,theJETPMUinthePresidencyandNTcommissionedastudytoevaluateoff-balancesheet12financingmechanismsfortransmission.Table6summarisesthekeyfeaturesofseveraloff-balancesheetmechanisms,inrelationtoownership,fundingstructure,payments,andtariffstructure,aswellassocio-economicbenefits.Thisisfollowedbyanassessmentofthelegalandregulatoryprovisionsthatwillguidethepolicychoiceandimplementationconsiderations.12Off-balancesheetisdefinedintheInternationalFinancialReportingStandards(IFRS)asitemsthatarenotrecognisedonacompany’sbalancesheet,butwillstillhavethepotentialtoimpactitsfinancialpositionandperformance.76JETImplementationPlan2023–2027Chapter5:ElectricityTable6:Off-balancesheetfinancingmechanismsMechanismOwnershipofFundingstructurePayment/tariffSocio-economicassetsstructurebenefitsIndependentPowerPrivateinvestorwillPrivateinvestorwillUtilitycompanySetoutintheTransmission(IPT)construct,own,andfundtheprojectwillpurchaserequirementsandoperateitsassetusingitsownthetransmissionpointsscoringresources,includingcapacity–systemincludedinIPTcompanyisequityandraisingbankabilityofthebiddingprocessprivatelyowneddebtinanSPV13projectTransmissionNTSCA/EskomPrivateinvestorwillCost-of-serviceSetoutinthenetworkfundtheprojectapproachorrequirementsandconcessionSPVisprivatelyusingitsownperformance-basedpointsscoringownedresources,includingregulationsystemincludedinequityandraisingthebiddingprocessdebtinanSPV14Generation-linkedIPP(generation)ConnectioncostCombinedwithSetoutinthewillconnecttheirandfundinggenerationtarifforrequirementsandgenerationplanttoincludedintheseparatedpointsscoringtheNTCSA/EskomconstructioncapitalsystemincludedingridofgenerationplantthebiddingprocessPrivate(IPP)JointventureJointVentureJVSPVraisestheVarydependingAdditionalsocio-(JV)SPVholdsdebtcapitalontheunderlyingeconomicbenefitsexistingandnewagreement–IPT,duringconstructiontransmission(Tx)Shareholderswillconcession,orJVandoperationownapro-ratamechanismsphasesPrivateinvestorequityholdsmajoritysharesinJVSPVIndependentPowerTransmissions(IPTs)havebeensuccessfullyimplementedinvariousdevelopingcountries,providingarelativelysimplesolutionforexpandingatransmissiongrid.IntheIPTmodel,theutilitycompany(Eskom/NationalTransmissionCompanyofSouthAfrica(NTCSA))entersapurchaseortransmissionservicesagreement(TSA)withanIPT,inwhichtheIPTcommitstoprovidingitstransmissionlinetotheutilitycompany,and,inreturn,theutilitycompanywillpayanagreed-uponavailabilityfee.Concurrently,theIPTprojectcompanymustobtainatransmissionlicensefromNERSA.Variousservicesorpurchaseagreementswill:„ObligatetheIPTcompanytodesign,engineer,procure,andconstructtheprojectandoperatethetransmissioninfrastructure,thatis,conductspecificmaintenanceactivitiesrequiredtoensurethatthelineandotherassociatedinfrastructureareavailabletobeusedwhen13SpecialPurposeVehicle(SPV).Nodirectfinancialcontributionfromthepublicsectorandoff-balancesheetforEskom.14SpecialPurposeVehicle(SPV).Nodirectfinancialcontributionfromthepublicsectorandoff-balancesheetforEskom.JETImplementationPlan2023–202777specified(notethatthisisnotthesameasoperatingthetransmissionsystemwhichremainsanEskom/NTCSAresponsibility)„ObligatetheIPTcompanytomakethecapacityofthetransmissioninfrastructurethatconstitutestheIPTavailabletoEskom/NTCSA„ObligateEskom/NTCSAtopurchasethetransmissioncapacityandmakethepaymentsforsuchcapacityregardlessofthequantityofenergythatistransmittedbytheproject.PaymentsfromEskom/NTCSAtotheIPTcompanywillbereducedtotheextenttransmissioncapacityisnotmadeavailable(availabilitydeductions);andtheprojectcompanyisnotobligatedtoexpandthetransmissionline(s)itwillconstruct,own,andoperate.ThecontractualarrangementforanIPTprojectcantakethreedifferentforms:BuildOwnOperate(BOO);BuildOwnOperateTransfer(BOOT);orBuildOperateTransfer(BOT).Procurementcanbegovernedinoneoftwoways:(1)Whennotgovernedbyaspecificregulatoryprogramme,Eskom/NTCSAasownerandoperatorofthenationaltransmissionsystemwillhandletheprocurement;or(2)TherecouldbearegulatedIPTprocurementprogrammesimilartotheREIPPPPthroughadedicatedIPTprocurementoffice.ForanIPTfinancingmodeltobesuccessfullyimplemented,severallessons15fromSouthAfrica’sREIPPPPprogrammeareapplicable.„Aninvestment-friendlyapproachmustbeadopted.Ifdealsdemonstrateareasonablelevelofprofitabilityandeffectivemanagementofkeyrisks,thereisastronglikelihoodofattractingsignificantprivatesectorinterest.OperatorsandinvestorsparticipatingintheREIPPPPhavedisplayedresilienceinthefaceofpasterrorsandpolicychangeswithinthepowersector.Whiletheyarecautiousaboutfuturepolicyadjustments,theyremainconfidentinthelongevityoftheirprojects.„Externalsourcesoffinancingshouldbeexploited.InternationalDFIsandMDBshaveexpressedastronginterestintransmissiongridinfrastructureinvestmentsandcanplayapivotalroleinenhancinginternalcapabilitiesforprogrammedesignandmanagement.Theycancontributetoareductioninprojectpreparationcosts,creditenhancementsforprojectsponsors,andimportantly,partialriskguaranteescanbolstersovereigngovernmentguarantees.„Well-structured,credible,andtransparentprocurementmechanismsandhigh-qualitycontractingdocumentationmustbeinplace.Arobustprocurementmechanismisessential,includingtheissuanceofRFPs,clearlydefinedqualificationsandevaluationcriteria,andtheestablishmentofbankablepurchaseandimplementationagreements.Transparent,cost-reflective,andunbundledpricingwillneedtobeconfirmed.Appropriatecreditenhancementorsecurityarrangementsthatrenderprojectsfinanciallyviableshouldbeincluded.15WorldBank.(2014).ReviewofSouthAfricaRenewableEnergyIPPProcess.(https://documents1.worldbank.org/curated/en/413401468302464965/pdf/ACS88260WP0P1482120Box385262B00PUBLIC0.pdf).78JETImplementationPlan2023–2027Chapter5:ElectricityOverthemedium-tolong-term,off-balancesheetoptions,suchastheJV,generation-linked,andevenpartialdivestiture,shouldalsobeexplored.ThreeconcessionalloanandthreecommercialloanfacilitiesintheIPGpledgetotheJETIPcouldbeutilisedfortransmissiongridinvestments.ThesearesummarisedinTable7.Table7:IPGofferstotheJETIPsuitablefortransmissiongridinvestmentsLenderFacilityInstrumentDescriptionKfWEUR200millionAFDEUR500millionConcessionalloanBilateralsovereignorloantoEskomUK(AfDB)USD1000millionConcessionalloanBilateralsovereignorloantoEskomGuaranteeIncreaseslendingheadroomofAfDBtothe(concessionalsovereignorEskombyUSD1billionloan)DFC(USA)USD1000millionCommercialDebt,guaranteesand/orpoliticalriskinsuranceforfacilities16privatesector-ledprojects,withupto30%directequityorfundstransactionincompaniesorfundsAdditionalitycriteriaBIIandPIDGUSD500millionCommercialEquity,debt,andguarantees(UK)facilitiesAdditionalitycriteriaTheKfW,FrenchDevelopmentBank(AFD),andUnitedKingdom(UK)facilitiesareforbilateralsovereign/state-ownedcompany(SOC)borrowing,whiletheDevelopmentFinanceCorporation(DFC),BritishInternationalInvestment(BII),andPrivateInfrastructureDevelopmentGroup(PIDG)facilitiesareforcommerciallendingtotheprivatesector.WhenthepledgesweremadeandtheJETIP2023–2027wascompiled,itwasassumedthatEskomwouldbeinapositiontoenterintoloanagreementstoaccesssomeofthesebilateralconcessionalfundsfortransmissioninvestments.TheEskomdebtreliefconditionshavesubsequentlyhaltedthisoption,unlesstheMinisterofFinance,onspecificapplication,grantsanexemptiontoEskomtoborrow.Inlightofthepressingneedtoscaleuptransmissioninvestmentintheshortterm,andthelengthoftimeitwilltaketoprocureIPTs,theroadmapsetoutinTable8isrecommendedbytheJETPMUforconsiderationbytherelevantauthorities.16InthecaseofanIPToranotherformofPPP.AppliestoBIIandPIDG.JETImplementationPlan2023–202779Table8:ProposedroadmapforscalingupinvestmentintransmissionusingJETIPfacilitiesLEVEL1:LEVEL2:LEVEL3:Eskom/NTCSATDPPilotingIPTandotherLong-termsystemtoenhancementprivatefinancingmodelsmanageprivateinvestmentintransmission2023–2024EskomandNTassessEskom/EskomandasuitablePrivatetransmissionNTCSAcapacitytoscaleandinstitution17agreeonthreeexecutealargerTDPusingpilotsforIPTsInvestmentpolicypreparedJETIPconcessionalfinance,bythemandatedministriessubjecttoanexemptionandAnIPTprocurementoffice18forapprovalbyCabinetandsovereignguaranteeapprovedsubmissionbytheShareholderMinistertotheNTCSABoardMinistryofFinanceandEskom/NTCSAnegotiatewithIPGlenderstoconcludeoptimalterms2024–2025ThechosenIPGconcessionalMarketengagementforDesignofaregulatoryloansapprovedbyMinisterthepreparationofpilotframeworkorNTCSApolicyforprocurements;concludetheprocurementofIPTsandEskom/NTCSAscalesupbidpackagesandopenbidotherprivatefinancingmodelstransmissioninvestmentandwindowspurchaseoftransformersforkeysitestounlockREIPPPP2025–2026TDPexecutionathigherscalePilotsprocurementprocessEstablishmentoftherelevantandbidsadjudicationprocurementoffice,andpreparationofprocurementLessonslearntinformthelong-programmetermsystemdesign2026–2027TDPexecutionathigherscaleThreeIPTsreachfinancialProcurementprogrammecloseandcommencecommencesoperationsLessonslearntinformthelong-termsystemdesign17DBSAissuitablycapacitatedtoundertakethisrolebasedonit’smandateandtrackrecord.18DBSAcouldhousethispilotprocurementoffice.80JETImplementationPlan2023–2027Chapter5:Electricity5.4ElectricityDistributionSignificantinvestmentwillberequiredinthedistributionnetworktoaccommodatetheplannedincreaseinREpenetration,includingasignificantincreaseinSSEG.Thedistributionnetworkmustbestrengthenedandexpanded,aswellasadaptedtoaccommodatetheintermittencyofRE,suchaswindandsolarpower.Thisnecessitatesthedevelopmentofadvancedgridmanagementtechnologies,energystoragesolutions,andsmartgridstobalancesupplyanddemandeffectively.Chapter10addressesthespecificchallengesexperiencedbymunicipalitiesinthisregardandproposessustainablefinancingmechanismsthatcanbedeployedtogetherwithsuitablegovernancearrangementswithintheframeworkoftheIntergovernmentalFiscalRelationsAct.Eskomitselfaccountsforapproximately40%ofelectricitydistributioninSouthAfrica,withmunicipalitiesresponsibleforthebalance.TheEskomdistributiongridalonerequirescapitalinvestmentofZAR42.6billionoverthenextfiveyearstosupportaround250majorcustomersthatwillbeaddedtothegridoverthefive-yearhorizon,includingrenewablegenerators.ThesedistributioninvestmentsarecloselylinkedtotheTDP.Forexample,anewsubstationmayrequiredistributioninfrastructuretoconnectittotheexistingdistributionnetworkortoconnectnewbulkloads.Oneoftheprimarychallengesfacingthedistributionnetworkisageingandinefficientinfrastructure.Muchofthecountry’sdistributioninfrastructurewasconstructeddecadesagoandhasnotbeenadequatelymaintainedorupgraded.Asaresult,thesenetworkssufferfromhightechnicallossesduetoinefficienciesandaresusceptibletobreakdowns,leadingtofrequentpoweroutages.Theneedforsubstantialinvestmentsininfrastructureupgradesandmodernisationsisparamount,notonlytoimprovethereliabilityofthegridbutalsotoaccommodatetheintegrationofREsources.ThetransitiontoNewEnergyVehicles(NEVs)(seeChapter7)alsocallsfordistributionnetworkplanningtocaterforcharginginfrastructureinamannerthatsupportsthedecarbonisationofthetransportsectorandensuressustainabilityfortheseinvestments.EquityisacentralpillaroftheJET,andSouthAfricafacesthechallengeofensuringthatallcommunitiesbenefitfromthetransition.Historically,disadvantagedcommunitieshavehadlimitedaccesstoreliableelectricityservices.Whilesignificantprogresshasbeenmadeinexpandingthedistributionnetworktoreachunderservedareas,furtherinvestmentisrequiredtoaddressenergypovertyandpromotesocialinclusion.Simultaneously,affordabilityremainsaconcern,asthecostofupgradinginfrastructureandintegratingrenewablesourcescanresultinhigherelectricityprices.JETImplementationPlan2023–202781Gridresilienceandcybersecurityarealsoemergingascriticalchallenges.Astheenergytransitionprogresses,thedistributionnetworkbecomesmoresusceptibletocyberattacksandextremeweatherevents.Ensuringthesecurityandresilienceofthegridisparamounttopreventdisruptionsthatcouldhavefar-reachingconsequences.Thisincludesinvestmentsincybersecuritymeasuresanddisasterpreparedness.RegulatoryandpolicyframeworksneedtoevolvetosupportthegoalsoftheJET.Inparticular,thereisaneedforacoherentapproachtowheelingofelectricityfromtheEskomnetworktomunicipaldistributionnetworksandviceversa,toenable‘one-to-many’and‘many-to-many’electricitytrading.Atpresent,fragmentedandinconsistentwheelingpoliciesandtariffsmakeitdifficultandtimeconsumingtonegotiatewheelingagreements,inhibitingthegrowthofprivateinvestment.Toaddressthis,adraftnationalwheelingframeworkhasbeensubmittedtoNERSAforconsiderationwhich,ifadopted,wouldapplytoalllicenseddistributors.5.5Decommissioning,Repowering,andRepurposingofRetiringCoalPowerPlantsThedecommissioningofcoalpowerplantshassignificanteconomicandsocialimplicationsforemployeesandcommunitieswhoselivelihoodsaredependentonthevaluechainsoftheselong-standingoperations.TherecentscheduledclosureoftheoldKomatipowerstationinMpumalangahashighlightedtheimportanceofsite-specificplanningforeconomicdiversification,repowering,andrepurposinginvestmentstodeliverneweconomicopportunitiesfortheaffectedcommunitieswellaheadofdecommissioning.IntermsoftheIRP2019coalpowerplantdecommissioningschedule,Eskomwilldecommissionandrepurpose22GWofcoal-firedpowerplantsintheMpumalangaProvinceoverthenext15years,makingasignificantcontributiontomeetingSouthAfrica’sdecarbonisationtargets,andaffectingthelivesofmanycommunities.TheJETIP2023–2027isbasedonthisassumption.Anumberofdevelopmentsin2023arenowinfluencinghowthistimelinewillmaterialiseinpractice.„TheelectricitysupplycrisishasledtoareconsiderationbygovernmentandEskomofthecoalpowerplantdecommissioningschedule,withEskomsuggestingpossibledelaysinthedecommissioningofsomeplantsbetweennowand2030.„NThasundertakenanindependentstudyonthetechnicalfeasibilityofcontinuingtooperatethecoalfleetbeyonditscurrentdesignlife,andiscurrentlyassessingthefinancialandGHGemissionstargetsimplicationsofdoingso.„NECOMisundertakingdetailedmodellingtodeterminetheextenttowhichdelaysinthedecommissioningofcoalplantsarenecessary,basedonthenewcapacitythatisexpectedtomaterialisethroughimplementationoftheEnergyActionPlan.82JETImplementationPlan2023–2027Chapter5:Electricity„TheDMREiscurrentlyupdatingtheIntegratedResourcePlan(IRP)2019.„TheEskomdebtreliefconditionsprohibitEskomfromborrowingwithoutexplicitexemptionfromtheMinisterofFinance.„Eskom’sdecommissioningofKomatipowerstationin2022(asscheduled)hasbeenmetwithcriticismfornotinvestingearlierinrepurposing,repowering,andcommunitydevelopment.ThedecommissioningofKomatipre-datestheJETIP,andtheMDBfundsthatwereraisedbyEskomforKomatiarenotpartoftheJETIPpledges.LessonsfromKomatihavebeenwelldocumentedbythePresidentialClimateCommission(PCC)andarenowkeyinputstothewayinwhichtheAcceleratedCoalTransitionInvestmentPlan(ACTIP)needstobeapproached.TheroadmapsetoutinthisJETImplementationPlanisbasedontheselessons.TheworklistedabovewillinformanyfuturedecisiononchangestoEskom’sdecommissioningschedule.Itwilltakeintoaccountthetechnicalfeasibilityofanysuchchanges,including:compliancewithminimumemissionsstandards(MESs);theirfinancialcostrelativetoinvestmentinalternativeenergysources;thecommitmentsmadeinSouthAfrica’sNDC;otherhealthandenvironmentalconsiderations;andtheextenttowhichanydelaysarenecessarybasedontheexpectedsupply-demandbalance.BasedontheIRP2019,SouthAfricasubmittedanexpressionofinteresttotheClimateInvestmentFunds(CIF)in2020forfinancingtosupportthedecommissioning,repurposing,andrepoweringofretiringEskompowerstationsthroughtheCIF’sAcceleratingCoalTransition(ACT)InvestmentProgramme.SouthAfrica’sACTInvestmentPlan(ACTIP)wasthenformulatedbyEskom,theDepartmentofForestry,FisheriesandEnvironment(DFFE),andtheCIFandendorsedbytheCleanTechnologyFund’s(CTF)TrustFundCommittee(TFC),toretireandreplacecoalgenerationassets,supportrenewableandenergyefficiencyprogrammes,andmanageaJustTransition(JT)fortheaffectedcommunitiesandworkers.TheendorsedACTIPisthebasisforfurtherprojectdevelopmentsthat,ifapprovedbytheCIFTFC,wouldtotaluptoUSD500millioninCIFgrantsandhighlyconcessionalloans,aswellasco-financingintheformofMDBconcessionalloans,andcommercialfinancing(togethertotallingUSD2.6billion),thusformingasubstantivepartofthefinancingpledgedbytheinternationalcommunitytotheJETIPatCOP26in2021.TheACTIPisforthephasedclosureofthethreepowerplants(Hendrina,Grootvlei,andCamden),whichwerescheduledintheIRP2019tobedecommissionedbetween2023and2027andisdesignedtosupportthefollowing:„InvestmentinrepurposingandrepoweringwithREtechnologythroughpartnershipsbetweenthepublicandprivatesectors„Mpumalangacommunity-driveninvestmentsinthefutureGreeneconomy,includingafforestation,agriculture,tourism,andtheREvaluechainJETImplementationPlan2023–202783„AnEnergyEfficiencyinPublicBuildingsandInfrastructureProgramme(EEPBIP)forsocialandeconomicdevelopment,withaninitialfocusontheMpumalangaProvince.Table9showstheallocationoffinancingearmarkedundertheACTIPfortheseinitiatives.ThemajorityofthefundingisconcessionalloansofferedbytheMDBsforrepurposingandcapacityreplacementofcoal-firedpowerplants,combinedwithinvestmentbytheprivatesector.OftheCIFfundingallocated,USD50millionisgrants,andUSD450millionisprovidedashighlyconcessionalloans.Table9:Funding(USD)andsourcesfortheACTIPComponentsCIFMDBsCountryPrivateOthersTotalcounter­sector1502000IBRDIFCAfDBparts200155Project1:RetiringandReplacingCoal-basedPowerGenerationCapacity100Decommissioning10100-40---2605Repurposing23037570165300860-andcapacityreplacementSocio-economic11090-----ImpactProject2:MpumalangaCommunityDevelopmentProjectCommunity-1005-5-1530drivendevelopmentProject3:EnergyEfficiency,DistributedGenerationandCommunityGenerationProgrammesEEanddistributed505745---generationIPTotal5005707025530087530GivenSouthAfrica’sageingcoalfleet,itisonlyaquestionofafewyearsintimingastowhentheseandmuchlargerinvestmentswillneedtobemadeindecommissioning,repowering,andrepurposingatcoalpowerplantsitesacrossMpumalanga.Furthermore,thelessonsfromKomati,thefirstpowerplanttobedecommissioned,clearlyconcludethatitisessentialtocommencewithrepurposing,repoweringprojects,andcommunitydevelopmentinvestmentswellinadvanceofdecommissioningtheoldcoalplants.Inshort,workersandcommunitiesmustbebenefitingfromtheneweconomicopportunitieslongbeforetheoldsourcesoflivelihoodsareremoved.Thesignificanttechnicaladvantagesupportingthisapproachisthatthereis84JETImplementationPlan2023–2027Chapter5:ElectricityampletransmissiongridcapacityinMpumalangatotakeuprenewablegeneration.Therefore,thepriorityistofront-loadworkontherepowering,repurposing,andcommunitydevelopmentinitiativeswhiledecommissioningschedulesarebeingre-evaluated.Withthisperspective,theJETImplementationPlansetsoutahigh-levelroadmapofthreeparallellevelsofactionsoverfiveyearsthatseekstoensurethatSouthAfricabenefitsfromthehighlyconcessionalinternationalfinancingviatheCIFthatisavailabletosupportthecomplexprocessofdecommissioning,repowering,andrepurposingcoalpowerplantsthatwillinevitablyneedtotakeplaceinthecomingdecade.TheACTIProadmapsetoutinTable10isbasedonthefollowingpropositions:„ArisingfromtheoutcomesoftheNTstudies,anythreecoalpowerplantscanbeidentifiedbyCabinetforthefront-loadingofrepurposing,repowering,andcommunitydevelopmentinitiatives.Cabinet’sdecisionwillbemotivatedtotheCIFtorequestanadjustmenttotheoriginalthreeACTIPtargetsites,ifneeded.„Bespoke,community-level,andco-createdplansarerequiredforeachsitetoaddressthesite-specificneedsoftransitioningawayfromcoal-basedincomesandtransitioningintoneweconomicopportunities.ThisworkmustbefacilitatedbysuitablyskilledanddedicatedplanningteamsworkingwithEskomastheasset’sowner,community-basedorganisations,tradeunions,businessassociations,andtheprovincialandmunicipalauthoritiesassoonasthedecisionismadebyCabinetonthechosensites.Developmentopportunitiesforthoseaffectedmayalsobeidentifiedbeyondeachspecificsite.„AdecisionisneededonwhetherornotEskomwillbetheborrowerforthebilateralconcessionalloansintheACTIPpackageand,ifnot,whichorganofstatewilltakethisrole.„TheCIFandMDBswillberequestedtoapprovefundingdraw-downsbytheborrowerforfront-loadedcommunitydevelopmentinitiativesatthechosensites.„TheACTIPworkmustbeproactivelymanagedbyadedicatedProjectsManagementOffice(PMO)whoselocationmustbedecidedbyataskteamcomprisingrepresentativesfromthePresidency,Eskom,NT,DMRE,DFFE,andDepartmentofPublicEnterprises(DPE).„Repurposingandrepoweringaretargetedforprivatesectorinvestment,andcommercialcapitalisreadilyavailableforREgenerationprojects.Eskom’scommercialroleinthesenewinvestmentswillneedtoberesolvedinaconsideration,persite,oftherepurposingofEskomassetsandtheemploymentprospectsforEskomstaff.Thecommercialmodeloptionsmustalsoensurethatbothshort-andlong-termbenefitsandco-benefitsmaterialiseinatangiblewayforthelocalcommunities.JETImplementationPlan2023–202785Table10:High-levelroadmapforimplementationoftheACTIPLevel1:EnablementLevel2:BespokelocalisedLevel3:RepurposingandplanningandearlyrepoweringinvestmentsPreparationofRFPsforrepurposingandrepowering2023–2024RecommendationstoCIFtoServiceproviders19todevelopMobilisationofMDBandapprovethefront-loadingbespokerepurposing,counterpartfundingfromlocalofACTIPinvestmentsinrepowering,andcommunityandinternationalDFIsrepurposing,repowering,anddevelopmentplanswiththecommunityprojectsatthreelocalstakeholdersateachProcurementofrepurposingCPPsitestobedecidedbyCPPsiteandrepoweringpartnersforCabineteachsiteSubmissionofbespokeplansACTIPtaskteamtodriveforfundingapprovalsbyCIFimplementation(Presidency,andMDBsEskom,DPE,NT,DMRE,DFFE)DecisionbyMinisterofFinanceonwhetherornotEskomcanborrowfromCIFandtheMDBsfortheACTIPDecisiononthelocationandresourcingofanACTIPPMODecisionsonpartnershipmodelsforrepurposingandrepowering,andtheprocurementmethod2025–2027FunctioningACTIPPMOleadsDraw-downofCIFgrantsplanninganddeliveryandloans20forapprovedcommunitydevelopmentandeconomicdiversificationinitiativesateachCPPsiteDraw-downofMDBfinance21earmarkedforimpact-mitigation,community-drivenprojects19ProcuredsubjecttothelocationoftheACTIPPMO.20SubjecttodecisionsonwhichentityistheborrowerfortheACTIP.21SubjecttodecisionsonwhichentityistheborrowerfortheACTIP.86JETImplementationPlan2023–2027Chapter5:Electricity5.6Planning,MonitoringandEvaluationTheTheoryofChangeforSouthAfrica’selectricitysectorenvisagesatransitionfromcoal-dependentpowergenerationtoasustainable,low-carbonfuture.ItbeginsbypromotinginvestmentsinREinfrastructure.Asrenewablecapacityincreases,thetheoryanticipatesareductioninGHGemissionsanddecreasedrelianceoncoal,improvingenvironmentalsustainability.Simultaneously,thetransitionaimstocreatejobs,stimulateeconomicgrowth,andenhanceenergyaccess,particularlyinunderservedareas.Throughpolicysupport,privatesectorpartnerships,andcommunityengagement,SouthAfricaaspirestoestablisharesilientandinclusiveREecosystemthatbenefitsboththeenvironmentanditscitizens.JETImplementationPlan2023–202787Figure4:TheoryofChange–ElectricityOUTPUTS(O)SHORT-TERM(ST)OUTCOMESO01O02ChangesinsystemandcapacityDecisionsconcludedonuseNTCSAboardappointedofJETIPconcessionalloansandexecutivemanagementST01forACTIPandtransmissionoperationalConcessionalloansslgnedforinvestmentstransmissioninfrastructureO04O03ST02Off-balancesheetsolutionsUpdatedACTIPapprovedbyNTCSAstrategysupportedfinalisedforEskomthatCIFBoardbyanupdatedTDPwithenableaddressingSouthfundingsecuredtomeetAfrica’stransmissionST03operationalobjectivesinvestmentneedNTCSAoperationalandqualifiednon-executiveO05O06directorsappointedCreationofprojectUpdatedregulatoryandlegalST04managementofficeforframeworkforIPTsincludingIndependentpowerACTIPguidelinesontransmissiontransmissioncontractsarelicencesconcludedwithoperatorsO07O08ST05AssessmentconductedofIPTprocurementsinprogressthecapacityandcapabilityInstitutionalresponsibilityofrelevantmunicipalitiesconfirmedfortheST06andEskomforupgradingprocurementofIPTsAppropriatewheelingdistributioninfrastructureframeworksconcludedO09Investmentimplementationplansfinalisedincludingstrategiestoaccesstherelevantoperationalskillandfinancialresourcesfortheinvestmentneed88JETImplementationPlan2023–2027Chapter5:ElectricityMEDIUM-TERM(MT)OUTCOMESJETIPIMPACT(I)WIDERIMPACTChangesinbehaviourandperformanceI01TransitiontoaGHGemissionsreducedlow-carboneconomyMT01andajust,climate-AccelerationofrepoweringandI02resilientsocietybyrepurposinginitiativesatchosenSocial,economic,mid-centuryEskomcoal-firedpowerstationsandenvironmentalwhichsupportMpumalanga’sdevelopmentco-benefitseconomicdiversificationnotablyimprovedairqualityMT02ACTIPprovidesEskomwithaI03blueprinttodecommissioningotherReliable,securechosencoal-firedpowerstationselectricitysupplyMT03I04Required14000kmsofnewConsiderationofnewtransmissioninfrastructureachievedmodelsforthenation’sby2032electricityneedsMT04I05NecessaryupgradestodistributionJobscreatedintheimplementedacrossthecountryelectricitysectorMT05GWofREgeneratedthroughstand-alonecommercialandindustrialinvestmentsincreasessecurityofelectricitysupplyandreducesenergycostsMT06IPTcontractsconcludedwithoperatorsandconstructioncommencedJETImplementationPlan2023–202789Table11:Themonitoringandevaluation(M&E)frameworkforJETIPinvestmentsinelectricityNarrativesummaryObjectiveIndicatorImpactsReliable,secureelectricitysupplyReductioninenergypovertyHouseholdsinenergypovertywithaccessforlow-incomehouseholdsJobscreatedinREandtransmissionNumberofjobscreatedintheNumberssupplychainsidentifiedindustriesConsiderationofnewmodelsfortheNewmodelsduetoimprovedgridNewmodelsnation’selectricityneedsGHGemissionsreducedReducedGHGemissionsCO2equivalentAirqualitylevelsSocial,economic,andenvironmentalImprovedairqualitylevelsco-benefitsnotablyimprovedairqualityMedium-termoutcomesAccelerationofrepoweringandRepoweringatcoal-firedpowerMWrepurposinginitiativesatchosenstationsRandsEskomcoal-firedpowerstationsRepurposingatcoal-firedpowerstationsACTIPprovidesablueprinttoAgreementontargetsandstandardsApprovedoperatingstandarddecommissioningothercoal-firedmanualpowerstationsRequiredc.14000kmsachievedGridinfrastructureforrenewableKmgenerationbuiltMWNecessaryupgradestodistributionUpgradeddistributionnetworkkmimplementedacrossthecountryMWGrowthinlocalsupplychainforREInvestmentinREsupplychainRandsandtransmissionRandsInvestmentintransmissionsupplychain90JETImplementationPlan2023–2027Chapter5:ElectricityNarrativesummaryObjectiveIndicatorShort-termoutcomesUnlockingconcessionalfundingDisbursementofIPGfundingRandfromtheIPGpackageContractforconcessionaltermsCostoffinanceUpdatedACTIPapprovedbyCIFFinancialcovenantsBoardUpdateACTIPApproveddecommissioningOperationalNTCSAplanIndependentpowertransmissionApprovedrepoweringplancontractsareconcludedwithoperatorsApprovedrepurposingplanMunicipalsupportprogrammeforCIFBoardapprovalApprovedapplicationdistributionupgradesAppropriatewheelingframeworkIndependenttransmissioncompanyBoardofDirectorsapprovedconcludedwithitsownbalancesheetTake-onfinancialstatementsforNTCSAEnableNTCSAtoprocurefromtheLicenceguidelinesmarketoutsideofEskomApprovedprocurementframeworkSignedcontractsSupportplanningatmunicipallevelsImplementingpartnersapprovedApprovedframeworkNERSAdocumentsJETImplementationPlan2023–20279192JETImplementationPlan2023–2027Chapter6:MPUMALANGAJUSTTRANSITION93PURPOSEThepurposeofthischapteroftheJETImplementationPlanisto:„articulatetheopportunitiesandchallengesthatneedconsiderationintheimplementationofMpumalanga’sJustEnergyTransition(JET)„demonstratethealignmentbetweentheobjectivesoftheJETIPandtheprovincialgovernment’sstrategytodiversifyMpumalanga’seconomy„showhowexistingstructuressetupbytheprovincialgovernmentwillbesupportedbytheJETProjectManagementUnit(PMU)andnationalandinternationalstakeholderstoachieveJETIPoutcomes.6.1ContextTheMpumalangaProvinceisattheheartofwhathasbeentermedthe‘MineralsEnergyComplex’,thehistoriccoreofSouthAfrica’seconomy,whichwasanchoredonmining,metal,miningrefiningandprocessing,petro-chemicals,andgeneralmanufacturing.22TheMpumalangaProvincewillbethemostaffectedbythelow-carbontransition,asitishometoover80%ofthecountry’scoal-firedpowerplantsand111coalmines(ofwhich56arestillactive),aswellasSasol’scoal-to-liquidindustrialcomplex.Itisestimatedthatbetween150000and200000jobsareatrisk(about18%oftheemployedprovinciallabourforce),includingabout80000coalminersand15000jobsinthetransportsector.Otherat-riskjobsareinformalandinformalservices,someofwhichhavebeentraditionallyfemale-dominatedactivities.Approximately400000peopleareeitherdirectlyorindirectlyatrisk.Beyondjobs,municipalities’revenuesandserviceswillbeaffected.Forexample,coalaccountsforalmosthalfoflocalrevenuesineMalahleni.Eskomandcoalminingcompaniesprovidekey22Nel,E.,etal.(2023).TheregionalimplicationsofJustTransitionintheworld’smostcoal-dependenteconomy:ThecaseofMpumalanga,SouthAfrica.(https://www.frontiersin.org/articles/10.3389/frsc.2022.1059312/full).94JETImplementationPlan2023–2027Chapter6:MpumalangaJustTransitionpublicservices,likewaterandelectricity,tocommunitiesclosetotheirsites.Withoutadditionalsupport,thesemunicipalitiesmaystruggletocontinueprovidingtheseservices.23TheJETIPspecificallyrecognisedMpumalanga’sJustTransition(JT)investmentneed.TheJETImplementationPlansetsoutaroadmapforthisinvestmentneedanddetailsspecificproactiveinterventionsthatneedtobeprioritisedintheshortterm.TheJETprovidesMpumalangawithanopportunitytodiversifyitseconomyandattractnewskillsandfinancialcapital.ArelevantreferenceisGermany’sRuhrregion,whichdiversifieditseconomyfromcoalmining(employing500000peopleinthemid-1950s)toaknowledge,service,andtechnology-basedeconomywithalargeuniversity,andtransportandengineeringsectors.Mpumalangahascertainattributeswhichpositionsitwellforasimilardiversificationstory.„Ithasawell-connectedinfrastructurenetworkthatincludesroadconnectivity,broadbandconnection,andelectricitytransmissionlines,allbuiltfortheexpansionoftheminingandelectricitysectors.„Ithasawell-establishedagriculturalsector,primedforgrowth.Mpumalangaisalreadyaleadingproduceroffruitsandnuts,amongotheragriculturalproducts.Theprovincepossessesnearly50%ofSouthAfrica’shighpotentialarableland,24creatingpotentialfortheagriculturalandtourismindustries.„TheeasternpartoftheprovinceishometotheKrugerNationalParkandothertouristhotspots,attractingmillionsofnationalandinternationaltouristseachyear.„IthostsanumberoflargecorporatesthathaveimportedskillsandresourcesfromwithinthecountryandbeyondSouthAfrica.Thesecorporatesareincentivisedtodiversifytheirownbusinessoperationswhenconsideringtheglobalshiftstolowercarbonwork.„Ithasoneoftheyoungestpopulationsinthecountry,indicatingtheavailabilityofayoungworkforcethatcanbetrainedanddeployedintonewindustries.Overacenturyofcoal-drivendevelopmentinMpumalangahashadaheavytollonthehealthofitscitizensandhashadvisibleimpactontheenvironment.Likemostcoalregions,theprovinceisahotbedofpollutants,includingnitrogendioxide.Coal-poweredplantsandminesrequirelargequantitiesofwater,whichdisrupthydrogeologicsystems.Theby-productsofthesetwoeconomicactivities,whichincludeacidminedrainageandsurfacerun-off,havethepotentialtocontaminatesurfacewaterandgroundwater,threateningimportantwaterresourcesonwhichpopulationsbeyondMpumalangadepend.23WorldBankGroup.(2022).SouthAfricaCountryClimateandDevelopmentReport.CCDRSeries.WorldBank,Washington,DC.(http://hdl.handle.net/10986/38216).24CentreforStrategicInternationalStudies(CSIS)andClimateInvestmentFunds(CIF).(2021).AFrameworkforJustTransitions.(https://justtransitioninitiative.org/wp-content/uploads/2021/01/Framework-for-Just-Transitions_Download.pdf).JETImplementationPlan2023–2027956.2Stakeholders’FeedbackAtthecoreoftheJETaretheconcernsandimpactsonstakeholders.Todeliveronthe‘just’componentoftheJETIP,stakeholderinputneedstobethedrivingforcethatdetermineswhereinvestmentismostcriticaltoenabletangibleimpactsinMpumalangaandbeyond.ThePresidentialClimateCommission(PCC)undertookacommunityandstakeholderconsultationprocessintheprovince.25Someoftheemergingthemesincluded:„Communitiesunderstandtheimpactofclimatechange.Thereiswidespreadacceptancethatgreenhousegas(GHG)andlocalemissionsmustbereduced.Mostcommunities,however,lackaclearunderstandingofthedynamicsanddetailsofwhatitmeanstoachieveaJustTransitiontoalow-carbonandclimate-resilientsociety.Thereisaclearindicationthatmanycommunitiesfearthistransitionandtheimpactitwillhaveonthem,addingfurtherchallengestotheirexistingday-to-daystruggles.„CommunitiesarewillingtosupportaJustTransition,buttheywanttoseemeaningfuleconomicbenefitsarisingfromitsimplementation.Communitymemberswantrelevantandmeaningfulskills,appropriatetoalternativedevelopmentpathwaysinthetransition,aswellasaccesstowaysofproducinggoodsorservicesasthetransitionistakingplace.„TheJustTransitionisacomplexandnuanceddiscussionaroundtrade-offsperceivedbetweendevelopmentandclimatechange.Communitiesandindividualstakeholdersareconcernedaboutthenegativehealthandenvironmentalimpactsofminingandenergy,buttheyarealsoconcernedaboutpotentialjoblosses.InMpumalanga,therearesectionsofthepopulationwhoarevigorousintheirdefenceofthemines.Thisislargelydrivenbyconcernfortheirlivelihoods.„Thegovernmentiswidelyseenasbeingunresponsiveandnegligentinitsengagementwithcommunities,orinrespondingtotheirconcerns.ThislackofactiononthesideofgovernmentmayhampertheJustTransitiondialogueandimplementationprocess.„RenewableEnergy(RE)isoftenmisunderstood.Severalcommunityrepresentativesexpressedmisinformationandalackofunderstandingofthecostsof,resourcesfor,andcontributionofREtotheJustTransitiontoalow-carbonandclimate-resilientfutureinSouthAfrica.„ThereisalackofclarityastothepositioningoftheJustTransitionprocesswithintheprovincialanddistrictstructuresofSouthAfrica.ThemainstreamingoftheJustTransitionprocesswithinexistingprovincial,district,andlocalgovernanceframeworksneedstobeurgentlyaddressedtoensurecoherentcommunicationandaction.25PresidentialClimateCommission(PCC).(2022).CommunityandStakeholderEngagementonaJustTransitioninSouthAfrica.96JETImplementationPlan2023–2027Chapter6:MpumalangaJustTransition„ThereareseverallocalactorsalreadyworkingwithcommunitiesonclimatechangeandtheJustTransitionacrossthecountry.Thequestionthereforebecomes:‘Isitpossibletoleveragefinancialsupportfortheseactorsaspartnersin,andchampionsof,theJustTransition?’6.3Mpumalanga’sEconomicDiversificationOpportunityMpumalanga’sGreenEconomyDevelopmentPlanisasub-setoftheprovincialgovernment’sVision2030ImplementationPlanandisstronglyalignedtotheJETobjectivessetoutintheJETIPasperTable12.Table12:JETIPobjectivesalignedwithMpumalangaGreenEconomyDevelopmentPlanobjectivesJETIPobjectivesMpumalangaGreenEconomyDevelopmentPlanobjectivesRepurposingcoalplantsREgenerationwithafocusonbroadeningtheeconomicparticipationofthisopportunitywithintheprovinceSupportingalternativeenergyincludingGreenHydrogen(GH2),waste-to-energypowerprojects,andtherepurposingofexistingcoal-firedpowerstations(thelatterbeinginpartnershipwiththeassetowner,Eskom)ImprovinginfrastructureandInvestmentintowaterinfrastructuretoimprovedroughtresiliencedevelopmentandprovideamoreconduciveenvironmentforindustrialisationEnablingthetransitionoftownsandurbanareasthroughtheroll-outofrooftopsolarphotovoltaics(PV),wastemanagementaccordingtocirculareconomyprinciples,andthegenerationofelectricityfromlandfillwasteDiversifyingthelocaleconomyScalingagriculturalopportunitiesbygrowingtheexistingskillsinprimaryagricultureandpromotingagri-processingdevelopmenttocaptureagreatershareofthevaluechainBuildingontheprovince’sexistingtourismfootprintbyenablingincreasedscaleforexistingbusiness,whilstprovidingthenecessaryincentivetoattractnewhospitalityenterprisestotheprovinceInvestinginyouthandfuturePositioningMpumalangaasahubofskillsdevelopmentfortheGreengenerationsEconomywithaspecificfocusonthebatterystoragesupplychaincirculareconomyopportunitiesBuildingcapacityforsuccessCaringforthecoalworkforceJETImplementationPlan2023–2027976.4ImplementationRoadmapforMpumalanga6.4.1ChallengesandRequiredOutputsThekeychallengesandimplementationneedsarehighlightedinFigure5,showingthelinkageswiththeimplementationroadmap.Figure5:ImplementationneedstomeetMpumalanga’sJETLocalcommunities41Planningandco-ordinationTheneedsoflocalcommunitiesImplementationarenotbeingappropriatelyneedstomeetActivityisnotbeingaddressedincurrentplansMpumalanga'sJETco-ordinatedwithinanoverallandstrategiesplanleadingtoduplicationandImplementationneed–32additionalcostsCommunitypreparationandImplementationneed–Co-ordinationwitheectiveexecutioniscriticalforprojectgovernanceandaccountabilityimplementationCapitalandgrantsProjectassessmentThenatureoftheprojectsNomaterialpipelineofwithinMpumalanga’sJETrequireprojectsthathavebeenthroughpatientcapitalandgrantsuntilscaleisprovenfeasibilityassessmentsImplementationneed–Implementationneed–MechanismtoaccessappropriateDevelopprojectoriginationpoolsoffinanceprocesseswitheectivepreparationsupportCh6Fig5Mpumalanga98JETImplementationPlan2023–2027Chapter6:MpumalangaJustTransitionTheMpumalangaprovincialgovernmenthasseveralenablingstructuresinplacetoimproveandchampionco-ordination.ThisincludesadedicatedresourceintheOfficeofthePremierfocusingonclimateconsiderationsandthecreationoftheMpumalangaGreenClusterAgency(MGCA).Theseexistingstructuresneedtobeaugmentedtointroducecommunityandnationalrole-playersintheJET.ThenatureofmanyoftheJustTransitionprojectsinMpumalangaisthattheyrequiregrantandpatientcapital.Sourcesofthesefinancinginstrumentsdoexistinthelocalandglobalmarkets,butaneffectivemechanismisrequiredtomatchprojectswitheffectivesourcesoffunding.Projectreadiness,whichincludesfeasibilitystudiesandthepreparationofduediligencematerial,isdependentonthecapacityoftherelevantimplementingagentsintheprovince.Thereisrecognitionthattherequiredskillswithintheprovincearenotsufficientcurrentlyandthattheimplementationroadmapneedstoconsiderhowbesttofostercollaborationandincreasecollectivecapacitybetweeninterestedparties.Anyco-ordinatingstructureneedstobecomplimentedwithabottom-upapproachtoprojectorigination,orprojectswillfail.Thishasbeenhighlightedduringtherelevantstakeholderconsultationsandwillneedaspecificfocusintheimplementationroadmap.JETImplementationPlan2023–2027996.4.2ImplementationApproachFigure6:MpumalangaimplementationapproachGovernanceandco-ordinationstructurestobefinalised.Theobjectiveistoalignandstreamline,takingintoaccountnationalandregionalconsiderations,alongsidetheneedsofcommunities,labour,business,andindustrywithintheprovince.Thiswillimproveimplementationprocessesandoutcomes.MappingassessmenttobeperformedbytheMGCAandtheProvincialJTstructures.PotentialprojectsacrosstheprovincethataligntoboththeJETImplementationPlanandtheMpumalangaGreenEconomyPlantobeidentified.PrinciplestobesetfortheJETFundingPlatformapplications.Fundingrequirementsofprojectstobeclarifiedforimplementingagentsoperatingwithintheprovince.Ongoingprogrammemanagement.Monitoringandevaluationwhilstpromotingco-ordinationandresolvingbottlenecks.ThisapproachtoimplementationwillneedtoconsiderthefollowingpointsthatareconsistentacrossallJETIPobjectives:„Socialparticipationwithintheeconomicdiversificationopportunityneedstoensurethattransitionplansareco-createdwiththeintendedbeneficiariesandthatintendedoutcomesgetdistributedinabroad-basedmannerforpeoplelivinginMpumalanga.„Socialprotectionforthoseaffectedbythetransitionneedstobedesigned.Inareaswheresimilartransitionshavebeensuccessful,therehasbeenasetofsocialprotectionsofferedtoimpactedworkersandcommunitiesenablingasmoothertransitiontoneweconomicactivities.„Ensuringavailablecapacityandthenecessarylevelofresourcesupportisrequiredatthevariousmunicipalitiesacrosstheprovince.„AcceptanceisneededthatJETIPobjectivesmustbeaugmentedwithadedicatedfocusonenablinginfrastructureincludingroad,rail,andwateracrosstheprovince.„Acknowledgementisrequiredthatmanycommunitiesareanxiousabouttheimpactonlivesandlivelihoodsthatwillarisewithashiftawayfromcoal.Thiswillneedaconcertedeffortonskillsdevelopmentandfront-endingrepowering,andrepurposingopportunitiesaroundexistingcoal-firedpowerstationstodemonstratethefutureforlivelihoods.100JETImplementationPlan2023–2027Chapter6:MpumalangaJustTransition6.4.3Mpumalanga’sOverallPlanTheMpumalangaprovincialgovernment,ledbytheOfficeofthePremier,hasdevelopedaseriesofplansthatseektoaddressthechallengesandopportunitiespresentedbytheJustTransitionintheprovince.ThedraftMpumalangaJustTransitionImplementationPlanhasidentifiedthefollowingsixpriorities:1.CollaboratewithrelevantstakeholderstodesignanddevelopastrategyfortheoperationalisationoftheMpumalangaJustTransitionandClimateChangeForumandSteeringCommitteeandprovidesecretarialsupporttothesebodies,DevelopmentFinanceInstitutions(DFIs),andotherrelevantpartners.2.Facilitatethedevelopmentandimplementationofacomprehensive,cohesive,andintegratedsuiteofclimatechangepoliciesandprogrammes.3.Identify,monitor,andstayabreastofJustTransitioninitiativesplannedand/orunderwayinMpumalangaatanational,provincial,andlocallevel.4.Identifyandmanagetechnicalsupportneedstosupportdecision-making.5.AdviseandsupporttheOfficeofthePremier,PMC,EXCO,andotherrelevantdepartments,partners,andstructuresonmattersrelatingtotheimplementationofJustTransitioninitiativesintheprovince.Drawingonthisdraftprovincialplan,aninterimTheoryofChangehasbeendevelopedwiththeMpumalangaprovincialgovernmentfortheoverallJustTransition.ThisImplementationPlanshowshowthenationalinitiativesfortheJETIP,ledbythePresidency,willcontributetotheMpumalangaplan.ThisTheoryofChangewillberevisedasworkprogressesontheplanandstrategy,withtheinvolvementofawidergroupofstakeholders.TheTheoryofChangeisillustratedinFigure7.JETImplementationPlan2023–2027101Figure7:TheoryofChange–MpumalangaJTOUTPUTS(O)INPUTSO01O02StrategyforKeyco-ordinationstructuresPublicfinanceoperationalisationofestablishedPartnerMpumalangaJTdevelopedcontributionsO04SecretariattoO03RegularmeetingsanddrivetheprocessSecretariatestablishedtostructuresestablishedforsupportgovernmentandinvolvingkeystakeholders,stakeholdersonJTinitiativesincludingprovincialdonorco-ordinationforumO05JTandeconomicO06diversificationplanComprehensive,coherent,developedandintegratedsuiteofJTpoliciesdevelopedO07Pipelineofnational,O08provincial,andlocalJTStrategictrainingprogrammesandprojectsinterventionswithSETAs,developedandtrackedTVETs,universities,andpartnersO09Capacitation/awarenessO10raisingandinvolvementofSecretariatsupportingcommunitiesonJTdevelopmentoffundableprojectsandprogrammesO11M&EsystemforJTactivitiesandoutcomesdeveloped102JETImplementationPlan2023–2027Chapter6:MpumalangaJustTransitionSHORT-TERM(ST)MEDIUM-TERM(MT)JETIPIMPACT(I)OUTCOMESOUTCOMESI01ChangesinsystemandcapacityChangesinbehaviourandReliable,secureperformanceelectricitysupply,withST01accessforlow-incomeMUTTCCFandMUTSCoperatingMT01householdsandgivingstrategicdirectionandInfrastructureconstructed/problem-solvingrehabilitated/maintainedI02JobscreatedinST02MT02renewableenergy,KeystakeholdersinvolvedandAgriculturethrivingandmoreindustrialisation,tourism,supportingrelevantactivitiessustainable,reducingcarbonagriculture,etc.intensityST03I03JTeconomicdiversificationplanMT03Sustainablelivelihoodsbeingimplemented,supportedbyTourismthriving,whilesecured/strengthenedrangeofpartnersreducingcarbonfootprintforSMMEs/communitiesatriskfromclimateandST04MT04transitionimpactsPipelineofprojectsandNewindustrialopportunitiesprogrammedbeingimplemented,created,e.g.inbatteries,I04includingquickwinscablesGHGemissionsreducedST05MT05I05InvestmenthappeninginRESkillsenhancedtosupportSocial,economicgeneration,transmission,andeconomicopportunitiesandenvironmentaldistributionandprovideneededsocialdevelopmentco-benefits,servicese.g.improvedairqualityST06andregenerationProjectsbeingimplementedtoMT06widenaffordabilityofelectricityActiveeconomicandsocialWIDERIMPACTinterventionsinat-riskST07communitiescreatingjobsTransitiontoaCommunitiesinformedandandsupportinglivelihoodslow-carboneconomyactivelyengagedinplanningandandajust,climate-implementingJTinterventionsMT07resilientsocietybyMunicipalitiesfinanciallymid-centuryST08stableAdvanceplanningfordecommissioning,repurposing,andrepoweringST09PlansbeingimplementedforfinancialviabilityformunicipalitiesJETImplementationPlan2023–2027103Aswiththecountryasawhole,Mpumalangaaimstotransitiontoalow-carboneconomyandajustclimate-resilientsocietybymid-century.ThespecificimpactsMpumalangaislookingforareasfollows(aspertheTheoryofChange):„Areliableandsecureelectricitysupplythatlow-incomehouseholdscanaccess(I01)„ThecreationofjobsboththroughtheJustTransition,andalsoviaeconomicdiversificationmorebroadly(I02)(livelihoodsinabroadersenseneedtobemoresecure,especiallyincommunitiesatparticularriskfromclimatedisastersortheeconomicshiftsbecauseoftheJustTransition)„GHGemissionsmustreduce(I04)„Importantco-benefits,forexample,inlandregenerationandimprovedairquality(I05).Tomaketheabovehappen,thesechangesinperformanceareneededinthreetofiveyears’time(medium-termoutcomes):„Infrastructureisconstructed,rehabilitated,andmaintained(MT01).„Keysectors,includingagriculture(MT02)andtourism(MT03),arethriving,andreducingtheircarbonintensity.„NewindustrialopportunitiesarecreatedfortheJustTransitionandeconomicdiversification(MT04).„Toexpandthesesectorsandimproveemploymentandlivelihoods,skillsareenhancedandnewskillsareneeded(MT05).„Activesocialandeconomicinterventionsareneeded,particularlyinat-riskcommunities(MT06).„Lastly,basicservicesareneededfrommunicipalitieswhosefinancesareat-risk,anditisimportantthattheyarefinanciallyviable(MT07).Enablingthisrequiresthesecapacitiesandsystemsinplaceoverthenextonetotwoyears(short-termoutcomes):„Theremustbeeffectiveleadership,direction,co-ordination,andproblem-solvingaroundtheJustTransitionatprovinciallevel.„ApoliticalforumisestablishedwithatechnicalSteeringCommitteetosteerthesystem(ST01),withkeystakeholdersinvolvedandsupportingrelevantactivities(ST02).„AJustTransitionandEconomicDiversificationPlanneedstobedirectinginvestment(ST03),withapipelineofprojectsandprogrammesbeingimplemented,includingquickwins(ST04).„InvestmentisneededinRE(ST05)withprojectstoincreasetheaffordabilityofelectricity(ST06).104JETImplementationPlan2023–2027Chapter6:MpumalangaJustTransition„Communitiesmustbeactivelyengagedinplanningandimplementinginterventions(ST07),andmostnotablyinareaswherepowerplantsaretobedecommissioned,whereadvanceplanningandimplementationisneededfordecommissioning,repurposing,andrepowering(ST08).„Lastly,plansmustbeimplementedtoassurefinancialviabilityformunicipalities(ST09).Thesearethekeydeliverablesneededintheshort-term:„ApipelineofJustTransitionprogrammesandprojects(O07)andskillsdevelopmentinterventions(O08)needstobefacilitatedbytheSecretariat(O10).„TheseneedtobeguidedbyaJustTransitionandeconomicdiversificationplan(O05)andastrategyforoperationalisation(O01),approvedbytheForumwhichhasbeenestablished(O02),andsupportedbyaSecretariat(O03).„Regularmeetingsandsomestructureswillbeneededforco-ordinationofstakeholders(O04).„Policieswillneedtobedeveloped(O06)toenabletheseactivities.Coretogettingeffectiveinterventions,aswellassocialacceptance,isinvolvementofcommunitieswithawarenessraising,capacitydevelopment,andinvolvementinJustTransitionplanningandinterventions(O09).„TheSecretariatneedstobesupportedbyamonitoring,evaluation,andlearning(MEL)system(O11),whichwilllinkwiththeJETPMUMELsystem.6.5PriorityJETInterventionsinMpumalangaWithinMpumalanga’soverallplan,theJETPMUwillfocusonthefollowingshort-termoutcomesandoutputs:„SourcingfinanceforJET-relatedactivitieswithinMpumalanga’splan,inparticularthroughtheJETFundingPlatform(seeChapter4)„EnablingMpumalanga’seconomicdiversificationplanbyexpeditingrepoweringandrepurposingopportunities(seeChapter5)attheoldcoalpowerplantsites„Ensuringthatnationalinterventionsplannedforskillsdevelopment(seeChapter9)andmunicipalities(seeChapter10)areappropriatelyalignedwithinMpumalanga’sImplementationPlan.Thiswillbeundertakenby:„UtilisingtheJETFundingPlatformtolinkappropriatesourcesoffinancetotheimmediateprojectopportunitiesthathavebeenidentifiedbytheprovincialstructuresJETImplementationPlan2023–2027105„ImplementingSouthAfrica’sAcceleratedCoalTransitionInvestmentPlan(ACTIP)inamannerthatfront-loadsrepurposing,repoweringandcommunitydevelopmentatselectedEskomcoalpowerstations,aheadofdecommissioning„Promotingcommunity-drivenprojectsthatempowerlocalpeopletoshifttheirdependenceoncoalvaluechainsbydevelopingneweconomicopportunitiesalongsideexistingactivities,andbyplayingstrongerrolesindefiningtheirtransitionplans.„AugmentingexistingstructuresinMpumalanga’soverallplanwithspecificnationalJETPortfoliosandworkstreamsasoutlinedinthisJETImplementationPlan,particularlyforskillsdevelopment(seeChapter9)andmunicipalcapacityforthejusttransition(seeChapter10).6.5.1JETFundingPlatformTheJETPMU’sJETFundingPlatform(seeChapter4)willbeleveragedinMpumalangaforthefollowing:„Developingappropriatestandardsonfeasibility,duediligence,andreportingthatmustbeappliedtoprojectsbeforetheyareincludedontheJETprojects’pipelineandcreatingarepositoryofthesereports„Identifyinginterestedfundersandmatchingtheiroffersandfundingrequirementswiththedemand-sidepipelineinMpumalanga„Supportingsoundprojectpreparationbyprojectoriginatorstobuildgrantmanagementcapability„CreatingaregisterofprojectswherefundingwassourcedviatheJETFundingPlatformtodemonstrateatrackrecord.6.5.2ImplementingtheACTIPTheallocationofCountryInvestmentStrategy(CIF)fundingforthedecommissioning,repowering,andrepurposingofretiringcoalpowerstationsundertheACTIPrepresentsamaterialportionofthebroaderInternationalPartnersGroup(IPG)fundingpackagethatwaspledgedtoSouthAfrica.Ifmanagedwell,theACTIPwillcomplementtheprovince’seconomicdiversificationplan,balancingtheplannedretirementofcoal-firedpowerstationswithproactiveinterventionsfocusedonnewpowergenerationdevelopmentsandothernewproductiveendeavours,andreskillingandcaringforthecoalworkforce.106JETImplementationPlan2023–2027Chapter6:MpumalangaJustTransition6.5.3SkillsDevelopmentandMunicipalitiesPlannedprovincialinterventionsforskillsandmunicipalitiesneedtobeaugmentedwithnationalsupportandcapacityfromthesetwocross-cuttingPortfoliosoftheJETIP.Thiswillbeimplementedwiththeintroductionoftwonewworkstreamsintheprovincialstructures.Theseworkstreamswillincludetheinstitutionalownersthatareimplementingskillsandmunicipalinterventionsatanationallevel(seeChapters9and10respectively),ensuringastreamlinedapproachtotheimplementationofJETskillsdevelopmentandmunicipalJETinitiativesintheprovince.6.6OutcomesandIndicatorsTable13proposesaninterimapproachtomonitoringandevaluation(M&E)fortheMpumalangaJETImplementationPlan.Table13:ProposedinterimapproachtoM&EforMpumalangaJETImplementationPlanNarrativesummaryObjectiveIndicatorImpactsHouseholdsinenergypovertyReliable,secureelectricitysupplyReductioninenergypovertyNumberswithaccessforlow-incomeNumberofSMMEshouseholdsNumbersofhouseholdsbelowJobscreatedinRE,industrialisation,NumberofjobscreatedinthethefoodpovertylineCO2equivalentemissionstourism,agriculture,etc.identifiedindustriesWaterqualityAirqualitylevelsSustainablelivelihoodssecured/NewSMMEsestablishedandHectaresstrengthenedforSMMEs/existingSMMEsexpandedincommunitiesatriskfromclimateMpumalangaandtransitionimpactsPovertylevelsreducingGHGemissionsandpollutionareReducedGHGemissionsbeingreducedImprovedwaterqualityImprovedairqualitySocial,economic,andAreaofdegradedlandreducedenvironmentalco-benefitsJETImplementationPlan2023–2027107NarrativesummaryObjectiveIndicatorMedium-termoutcomesInfrastructureconstructed/REinfrastructureconstructedrehabilitated/maintained(GW)Infrastructureconstructed/Roadinfrastructurerehabilitatedrehabilitated/maintained(km)WaterinfrastructurerehabilitatedAgricultureandtourismsectorsAgriculturesectorthriving,withDistributioninfrastructurethriving,withreducedcarbonreducedcarbonintensityrehabilitated/maintained(km)intensityGrowthintheagriculturaloutputTourismsectorthriving,with(Rand)reducedcarbonintensityCO2equivalentemissionsGrowthintheagriculturaloutputNewindustrialopportunitiescreatedInvestmentandexpansionin(Rand)innewandexistingvaluechainsindustryCO2equivalentemissionsRandSkillsenhancedtosupportPeopleskilledinrelevantNumberseconomicopportunitiesandprovideoccupationsNumberandvalueofneededsocialservicesinterventionsfocusingonemploymentandlivelihoodsActiveeconomicandsocialInterventionsbeingimplementedinterventionsinat-riskcommunitiesthatsupportemploymentandNumberofcleanauditscreatingjobsandsupportinglivelihoodslivelihoodsMunicipalitiesfinanciallystableMunicipalitiesfinanciallystable108JETImplementationPlan2023–2027Chapter6:MpumalangaJustTransitionNarrativesummaryObjectiveIndicatorShort-termoutcomesMpumalangaJETForumisTheForumismeetingregularlyandMeetingsarehappeningatleastoperatingandgivingstrategiceffectivelyquarterly,withacoregroupofdirectionandproblem-solvingstakeholdersparticipatingMemberstakeholdershaveboughtMemberrole-playersintotheJETendorseandunderstandtheirresponsibilityandaccountabilitiesasrelatestotheJETinMpumalangaJTandeconomicdiversificationplanThePlanisbeingimplementedComponentsofthePlanareisbeingimplemented,supportedbybeingimplementedarangeofpartnersEmergentmodelsofviableJTinterventionsbeingtested(e.g.SocialEmploymentFund,landregeneration)StakeholdersaretakingontherolesAllocationofstaffandbudgetbyrequiredintheJETImplementationkeystakeholderstowardsactionsPlanenvisagedinthePlanPipelineofprojectsandPotentialprojectsprogressingasTrendsonplanning/approved/programmesisbeingimplemented,fastaspossiblewhilemaintainingdisbursedJETprojectsincludingquickwinsqualityInvestmenthappeninginREREgenerationsupportedMWsofnewgenerationgeneration,transmission,anddistributionInvestmentmobilisedingeneration,Randtransmission,anddistributionCommunitiesactivelyinformedSystematicengagementwithSystematicinvolvementofandactivelyengagedinthecommunitystakeholderscommunitiesinplanningofplanningandimplementationofJTinterventionsinterventionsNumberofconstituencieswhoinputtedintotheJTinterventionsAdvancedplanningforPreparationfordecommissioningPlansbeingimplementedfordecommissioning,repurposing,andunderwayrepurposingandrepoweringrepoweringplantsbeingcommissionedPlansbeingimplementedforCostofsupplystudiesavailableCostofsupplystudiesfinancialviabilityformunicipalitiesundertakenforallmunicipalitiesPlansbeingimplementedforMunicipalitiesimplementingMunicipalitiesimplementingfinancialviabilityformunicipalitiesremedialmeasuresremedialmeasuresJETImplementationPlan2023–20271096.7GovernanceGuidedbyconsultationswiththeprovincialgovernment,andmindfulthattheprovincehasestablishedanumberofmulti-stakeholderforumsfocusedontheJET,thegovernancestructuredepictedinFigure8willdriveJustTransitionimplementationinMpumalanga.Figure8:MpumalangaJETimplementation:GovernanceandinstitutionalarrangementsMpumalangaJETActionForum„TheForumwillbechairedbytheOfficeofthePremier.„TheForumwillbeformedbyrealigningexistingstructuresthathavebeeninstitutedbytheMpumalangaprovincialgovernment.„Representationwillinclude:ƒRelevantNational,Provincial,andLocalGovernmentstakeholdersƒCivilsocietyandcommunitystakeholdersƒStakeholdersfromorganisedbusinessintheprovinceƒLabourunions.„Coordinatingstructuretoguideplanning,monitorandevaluateprogress,andreporttostakeholders.MpumalangaGreenClusterAgency(MGCA)JETPMUMpumalangaJETSecretariatNationalpartneronimplementationLocalpartneronimplementationTheSecretariatwillbethesinglepointofcontactforJETalignedactivities.ThiswillincludesupportingtheForumonapprovedobjectivesandco-ordinatingworkstreamsthattakeresponsibilityforexecution.TheJETPMUwillbetheSecretariat’snationalpartner.WORKSTREAMSRepurposingandDiversifyinglocalInvestinginyouthandOtherrelevantrepoweringofcoal-firedeconomiesandcapacityskillsdevelopmentsworkstreamspowerstationsbuildingAppropriateownerswillbedeterminedforeachworkstreamandwillberesponsibleforcollaboratingwiththerelevantstakeholderstoachieveexecutionobjectives.WorkstreamgoalsandprogressupdateswillbeprovidedtotheSecretariatonanongoingbasis.110JETImplementationPlan2023–2027Chapter6:MpumalangaJustTransitionThegovernancestructureinFigure8bringstogetherprovincialandnationalinstitutionstodriveJETimplementationinMpumalanga.Table14showsthemainactivitieseachkeyinstitutionwillberesponsibleforinthiswork.Table14:KeyactivitiesandinstitutionalownersCategoryActivityInstitutionalOwnerGovernanceandstrategyConveningtheJETForumOfficeofthePremierImplementationMpumalangaJETSecretariatMpumalangaGreenClusterAgencyFundingDevelopingstrategyOfficeofthePremierMonitoringandevaluation(M&E)ConstitutingworkstreamsOfficeofthePremierandJETPMUEnablingpolicyenvironmentOfficeofthePremier(local)EnablingpolicyenvironmentJETPMU(national)LocalimplementationpartnerMpumalangaGreenClusterAgencyNationalimplementationpartnerJETPMUSettingupJETFundingPlatformJETPMUOperationalisationofJETFundingJETPMUPlatformProjectmatchmakingJETPMUSettingKPIsandtargetsAllstakeholdersthroughtheOfficeofthePremierMonitoringimplementationOfficeofthePremierandJETPMUEvaluationimplementationOfficeofthePremierandJETPMUExternalreporting(includingOfficeofthePremier,PresidentialClimateconsultations)Commission(PCC),andJETPMUJETImplementationPlan2023–2027111112JETImplementationPlan2023–2027Chapter7:NEWENERGYVEHICLES113PURPOSEThepurposeofthischapteroftheJETImplementationPlanisto:„articulateactionsthatwilldrivetheimplementationofSouthAfrica’stransitionfrominternalcombustionengine(ICE)vehiclestoNewEnergyVehicles(NEVs)andstimulategrowthofthelocalautomotiveandbatterymanufacturingvaluechainsoverthefive-yearperiod,starting2023until2027/8„assigninstitutionalownersandtargetstotheseactionstoensuretheco-ordinatedmobilisationofbotheffortandfinancebyrelevantrole-playersinthepublicandprivatesector„buildontheworkofcurrentprojectdeveloperstoidentifyopportunitiesforscaling-upinvestmentsinviablebusinessmodelswhiletheNEVpolicylandscapeisevolving.7.1ContextTheframeworkforaJustTransition(JT)inSouthAfrica26notestheimportanceofthecountry’sautomotivemanufacturingindustry,andthesignificantinterdependenciesbetweentheindustryanddecarbonisationofthetransportsectorinajustandequitablemanner.TherapidglobaltransitionfromInternalCombustionEngine(ICE)vehiclestoNewEnergyVehicles(NEVs)presentsbothanexistentialchallengeandapromisingopportunityforSouthAfrica.But,withoutadeliberateandco-ordinatedlocaleffort,theindustry’ssustainabilityisatriskandtransportsectoremissionswillbeonatrajectorythatisinconsistentwiththecountry’sNationallyDeterminedContribution(NDC)commitments.26PresidentialClimateCommission(PCC).(2022).114JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesAgrowingNEVsectorcoulddeliversignificantJustTransitionoutcomesintheformofjobretentionintheat-riskautomotivemanufacturinghubsofGauteng,KwaZulu-Natal,andtheEasternCape.Inaddition,itwillleadtoreducedtransportcostsforthepoorandreducedemissionsalongtransportchannels,newindustrialemploymentinlocalNEVcomponentsupplychains,andcontinuedaccesstoexportmarkets.AJustTransitionmeansthatthetransportsector’sdecarbonisationeffortmustbeundertakeninawaythatcontributesmeaningfullytothesesocialandeconomicoutcomes.TheJETIPhighlightsthescaleofinvestmentneededforthetransitiontoNEVsinSouthAfrica’sautomotivevaluechain.ItalsonotesthatlargenumbersofSouthAfricanworkersandsignificantannualexportearningsareatriskiftheindustrydoesnotadapttotherapidtechnologicalandregulatorychangesoccurringinSouthAfrica’sbiggestvehicleexportmarketdestinations.TheJETIPestimatesthataninvestmentofZAR128.1billionwouldbeneededfrom2023–2027forthetransportsectortocontributemeaningfullytoSouthAfrica’sdecarbonisationcommitmentsandtoaJustTransitionoftheautomotiveindustry.InitialworkdonebytheDepartmentofTrade,IndustryandCompetition(DTIC)estimatedthat,basedonthemostambitiousscenariooftransitiontoNEVs,phase1fortheNEVtransitionwouldrequireZAR68billionuntil2035tosupportthelocalvehicleproductionvaluechaintoshiftfromICEtoNEVs;andthatafurtherZAR133billionmayberequiredinphase2tosupportlocalconsumertransition.TheDTICiscurrentlyfinalisingtheWhitePaperforelectricvehicles(EVs)and,withNationalTreasury(NT),isalsoworkingonaNEV-supportpolicyforphase1,whichisduetobeannouncedin2023/24.ThepaceofthetransitiontoNEVswillbeaffectedbyanumberoffactors,including:theavailabilityoffundingforthetransition,particularlyfromJETIPpartners;thespeedofthegridtransitiontorenewableenergy;gridstabilityduetoareasonablereservemarginofenergysupplyoverdemand;technologydevelopmentsthatwillaffectpricepremiumsforNEVscomparedtoICEvehicles;andregulatorymeasuresinmajorexportmarkets.Thescaleofresourcesrequiredforthetransitionwillneedstrongerpartnershipswithboththeprivatesectorandglobalpartners.Inthisevolvinglandscape,theJETImplementationPlansetsoutaJETPortfolioandRoadmapfortheNEVsectorthatreflectscurrentNEVinitiativesbyDevelopmentFinanceInstitutions(DFIs),municipalities,andtheprivatesector,whicharetestingmodelsthatcanbescaledaspolicymeasuresareimplementedandasfinancingismobilised.TheJETImplementationPlanalsosetsoutapropositionfortheIndustrialDevelopmentCorporation(IDC)toleadaco-ordinatingplatformwithstakeholderstocrowdinappropriatesourcesandtypesoffinancetoexpeditegrowthinSouthAfrica’sNEVindustry.JETImplementationPlan2023–20271157.2Stakeholders’FeedbackDuringthePresidentialClimateCommission’s(PCC’s)consultationsontheJETIPinearly2023,stakeholdersraisedseveralconcernsaboutSouthAfrica’stransitiontoNEVs.Table15highlightsthese,categorisedintothemes,andshowshowtheconcernsareaddressedinthisJETImplementationPlan.Table15:StakeholderconcernsStakeholderconcernsHowtheconcernsareaddressedSupplyDependencyontheEUandTheDTICwithNT,arefinalisingtheNEVWhitePaper(jobsandexportmarketsforlocallymadeandreviewoftheAutomotiveProductionDevelopmentlocalisation)cars,placesabout100000Programme(APDP)andincentivepackagetosupporttheautomotivesectorjobsatsectortransitionandprotectemploymentSupplyrisk-componentandregional(batteryvalueautomotivehubswillbeWhilemostlyexportingtoEurope,thesectorexportstochain)severelyaffectedover150countries-astheindustrytransitions,itwillneedtodiversifyandgrowexportstoothermarketsinAfricaEradicatingpovertyandandtheMiddleEast27inequalityaremorepressingmattersthanNEVsSustainableindustrialisationoftheautomotivesectorisasignificantleverforincreasingjobsandskills,povertyInvestmentsmustmakeaalleviation,andimprovedequality-in2022,theindustrysocialcontribution,andnotjustcreatedabout6000newjobs28climatemitigationClarityongovernment’sNEVpolicyandincentiveswilltriggerinvestmentsincomponentlocalisation-inAugust2023,ZAR4.86billionofinvestmentwasannouncedbyovertencomponentcompanies29IDCneedstoplayapivotalroleTheDTIC,withtheIDC,iscurrentlydevelopingtheindevelopingthebatteryvaluenationalbatterystrategy-theIDCcurrentlyhasachainZAR19billionbatteryvaluechainprojectpipelinePrivatesectorshouldalsoInvestmentinthebatteryvaluechainwillrequiremultiplefinancethedevelopmentofthepartnersfromgovernment,DFIs,andtheprivatesector-batteryindustry,notonlyDFIstheinvestmentcostandriskaresubstantialandnooneandgovernmentstakeholdercandrivethisinitiativealoneInternationalincentivesforbatteryproductionareincreasinglycompetitiveanddifficulttomatchinpurelyfinancialterms-SouthAfricawillrequireanappropriatepolicyresponsetosupporttheindustry’sdevelopment27NationalAssociationofAutomobileManufacturersofSouthAfrica(NAAMSA).(2023).TheExportManual.28NAAMSA.(2023).TheExportManual.29(https://www.moneyweb.co.za/news/economy/auto-component-companies-pledge-to-invest-r4-86bn-by-end-2024/).116JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesStakeholderconcernsHowtheconcernsareaddressedDemandCharginginfrastructureshouldInvestmentsine-mobilityprojectsdemonstratepositive(infrastructure)allowforrenewablessocio-economicimpact,suchashigherdriverearningsandyouthemployment-thelowertotalcostofownershipThetransitionmustnotmake(TCO)valuepropositionofNEVsshouldlowerthecostofmunicipalitiesworseoffpublictransportCharginginfrastructureinvestmentwillsupportinvestmentinrenewablesandenergystorageandlowerdemandonthegridInfrastructureinvestmentsforpublictransportandmobilitywillcreateanopportunityformunicipalitiesandEskomtodiversifytheirrevenuemixtoagrowingNEVsectorandhomechargingFundingFundingmustnotplaceaGrantandconcessionalloanfundingisneededtolowerburdenonSouthAfricathecosttosupportmedium-sizedbusinessesandnewentrantsintotheNEVtransportationandmanufacturingDifferenttypesoffundingmustsectorsandcompensateforthecostsoftransitionbeconsideredtolowerthehighcostofcapitalNEVpolicyincentiveswillfurtherlowerthecostoffundingforautomotiveOriginalEquipmentManufacturing(OEMs)andsupplychainlocalisationTherapidscalingofthepublictransportandmobilityprogrammeswillattractprivateandventurecapitalCo-ordinationStrongplanningalignmentTheImplementationPlanproposesthatIDCplayaleadisrequiredduetooverlapsco-ordinatingroleinbothNEVsandGH2investments,betweenGH2,NEVs,andtoalignandoptimiseindustrialdevelopmentwithinelectricityplanninggovernment,anddevelopmentsinthesesectorsDemandToomuchfocusonEVPresentlynoincentivesforprivatecaruseconversionsincentivesforprivatecarusetoNEVs,duetofiscalaffordabilityconstraintsandtiming(consumerconsiderationspurchase,NeedtofocusonpublicpublictransporttoaddressinequalityMunicipalitiesmustplayakeyroleinthetransitionoftransport,andjusticepublictransport-threecitiesareplanningtoimplementlogistics)NEVbusprogrammesNotenoughemphasisontheroleofmunicipalities,publicTheDevelopmentBankofSouthAfrica(DBSA)andIDCtransport,andlogisticsasarebuildingfundingprogrammesforNEVpublictransportdriversfordecarbonisationandmobility/logisticstosupportpilotsandlocalisation-theseprogrammesrequireapproximatelyZAR16billionRoad-to-railinitiativesneedtobedevelopedwiththerelevantSOCsJETImplementationPlan2023–2027117StakeholderconcernsHowtheconcernsareaddressedPolicyandNeedfornationalpolicyTheDTICpublishedaGreenPaperin2021,openingaregulationcommitmentandanincentivediscussiononthecountry’sapproachtoNEVtransitionprogrammetotransitiontheautomotiveindustrytoNEVsTheDTICarecurrentlyfinalisingtheNEVWhitePaper,whichclarifiesthecountry’sapproachtothetransition,Needforsupply-sideincentivesincludinghowgovernmentwillincentivisetheNEVtodriveOEMconversiontotransitionNEVsTheJETImplementationPlanrecommendsco-ordinatedNeedfordemand-sideplanningtodesignaprogrammeofdemand-sideincentiveincentivestotransitionpublicmeasuresforpublictransporttransitiontoNEVstransporttoNEVs118JETImplementationPlan2023–2027Chapter7:NewEnergyVehicles7.3ManagingtheChangeSouthAfrica’sNEVvisionisarticulatedintheDTIC’sWhitePaperthatiscurrentlybeingfinalisedwithingovernment.ItsetsoutanapproachontransitioningtheautomotiveassemblyandcomponentmanufacturingbasefromICEtoNEVssuchthatthecountrycanbuildonitscompetitiveindustrialcompetencytoestablishagloballycompetitiveNEVassemblyandsupplychain.TheoverarchingstrategyfordecarbonisingthetransportationsectorisfurtherechoedbytheDepartmentofTransport(DoT)GreenTransportStrategy(2018–2050),whichaimsforthetransportsectortocontribute5%toSouthAfrica’stotalgreenhousegas(GHG)emissions,downfromabout10%.TheJETIPtargetstransportsectoremissionsreductionandsocio-economicbenefitswhilstsupportingthecountry’smanufacturingambitionsandtheadoptionofNEVtechnologyandrelatedinfrastructureinthevariousmarketsegments.TheJETImplementationPlanstrivestoidentifysourcesoffinancingfortheidentifiedinvestmentneedsandtoco-ordinateinvestments.JETImplementationPlan2023–2027119Figure9:TheoryofChange–NEVsOUTPUTS(O)FUNDINGO01FundingO02FundingIntroductionofgovernment’sNewgrantsandconcessionalloanfinancingsecuredfromglobalandNEVincentiveschemefordomesticsourcestoincreasethescaleatwhichNEVmobilityandautomotivevaluechain(DTIC)publictransportprojectscanbeimplemented(IDC)SUPPLYO03SupplyO04SupplyO05SupplyReducedimporttaxesonNEVsFinancingsourcedtoenableSouthAfricanNationalBatteryandspecificcomponentparts,uYilo’sKickStartFundtoscaleValueChainStrategicPlansuchasbatteriesandpowertechnologyuptakesupportfordevelopedandadoptedelectronics(NT)SMEsO06DemandO07DemandCollaborativeplanbetweenIDC,DBSA,DTIC,DoT,taxiindustry,ReviewbyNTandDTICofthesubsidisedbuscompanies,provinces,andmetrostoadapttheusetaxregimethatisconstrainingofexistingsubsidiesforpublictransporttoincentivisetransitiontodemandforNEVsandpreferredNEVs(DoT)optionagreed(NT)DEMANDO08DemandO09DemandO10DemandIncreasedinternationalgrantandGovernmenttaskteamdesignsEngagementwithconcessionalfinancingtargetedthroughbalancedandaffordableinsurancecompaniestheIDCandDBSAtosupportearly-stagedemand-sideincentivesforandcommercialbankspreparationforagrowingpipelineofNEVs,anddisincentivesforonde-riskingNEVmobilityandpublictransportNEVprojectscarbonintensivetailpipeadoption(IDC/DBSA)byprivatedevelopers(JETPMU)emissions,supportedbyinternationalTA(DTIC,NT)SHAREDO11SharedinfrastructureINFRA-STRUCTURECollaborativeanalysisbetweenstakeholdersofNEVcharginginfrastructureshort-andlong-termneeds,currentdevelopments,currentcriticalinfrastructurefunds,andopportunitiesthatresultsinaco-ordinatednationalstrategyandplanforinvestmentstoscale-upoverthenextfiveyears(EskomDistribution,NAAMSA)SKILLSO12SkillsConsolidatednationalskillingandjobtransitionprogrammeagreedthataddressestheevolvingcapabilityrequirementsoftheNEVsector(NationalAssociationofAutomobileManufacturersofSouthAfrica(NAAMSA),NationalAssociationofAutomotiveComponentandAlliedManufacturers(NAACAM))POLICYANDO13PolicyandregulationsO14PolicyandregulationsREGULATIONSFinalisedNEVpolicybyDTICAgreementbetweenSouthAfricaandEUonautomotivetradeandupdatedGreenTransporttransitionplanthatallowscontinuedexportstotheEUwhilelocalStrategybyDoTindustrytransitionsitsproductionsystems(DTIC)O15PolicyandregulationsO16PolicyandregulationsRegulatorystandardsforNEVsdevelopedfurtherStudyleadstopolicydevelopedonacriticalmineralsbenefitsincentivepolicy(DTIC,NT,DMRE)120JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesSHORT-TERM(ST)OUTCOMESMEDIUM-TERM(MT)JETIPIMPACT(I)OUTCOMESWIDERIMPACTChangesinsystemandcapacityChangesinbehaviourandperformanceST01FundingST02FundingMT01FundingNewincentiveCurrentprojectsadvancetoimplementationandOEMsinvestinSouthsupportsOEMthepipelineofNEVmobilityandpublictransportAfricaforbatteryelectricbusinesscaseforNEVprojectsincreasesvehicle(BEV)productioninSouthAfricaMT02SupplyST03SupplyST04SupplySMEgrowthandemploy-I03ReductioninairpollutionI02Economicdiversificationandinclusivegrowth/jobcreationI01GHGreductionsment,skillsdevelopmentTransitiontoalow-carboneconomyandajust,climate-resilientsocietybymid-centuryPipelineofNEVmobilityandKickStartFundsupportsincreasingpublictransportprojectsincreasesnumberofSMEstotakeupnewMT03SupplyduetolowercostprojectionstechnologysolutionsIncreasedinvestmentinbatterymineralandST05SupplyprecursorsupplychainFundingraisedforimplementationofthebatteryindustryvaluechainMT04Demandstrategy,basedonbankablebusinesscasesforbatteryindustryprojectsLowerprojectcostforpublictransportNEVST06DemandST07DemandprojectsandimprovedviabilitySolutionoptionsidentifiedbyrole-playersIntroductionofincentivestoarecostedandreviewedbyrelevantunlocknewinvestmentsinMT05DemandauthoritiespublictransportPublicsectorbusfleetsaretransitioningtoNEVs,ST08DemandST09Demandlogisticsfleetconversionmovestoscale,andTaxreformsCurrentIDCandDBSA-supportedprojectsadvancetoprivateNEVexpandingimplementedimplementation,andthepipelineofNEVmobilityandpublictransportprojectsincreasesST10DemandST11DemandDemand-sideincentivesandLowerinsurancepremiumsforNEVsanddisincentivesimplementedaffordableassetfinanceproductsforNEVsST12SharedinfrastructureEVcharginginfrastructureinvestmentsincreaseST13SkillsMT06Skills,policyandSkillsprogrammeroll-outregulationsST14PolicyandregulationsST15PolicyandregulationsInvestorsinvestinginbatteryandvehiclePolicycertaintyandfinalCurrentautomotiveexportstoEUmanufacturingandgovernmentroadmapandprotectedunderanagreedtimeframesupplychainspositionannouncedforNEVtransitionST16PolicyandregulationsPolicycertaintyregardingSouthAfrica’sambitiontobecomethecriticalmineralsbeneficiationhubforSub-SaharanAfricaJETImplementationPlan2023–2027121Achievingthisvisionrequirestheadoptionofaco-ordinatednationalimplementationandmonitoringplantoensurecontinuousprogress.TheJETImplementationPlanusestheTheoryofChangetoarticulateanactionableandmeasurableroadmap,usingfivedimensions,asshowninFigure10.Figure10:FivedimensionstoarticulateanactionableandmeasurableroadmapChallengesChallengesthatmust1beovercometoachievethetransitiontoNEVsActionableand5Impact2ActionsmeasurableSocial,(outputs)roadmapforeconomic,andenvironmentalCompletedimplementationimpacttoachieveby2035deliverablesbyinstitutionalownerstoachievethevisionMedium-43Short-termtermoutcomesoutcomesMeasurablechangesinMeasurablechangesinperformancewithin3–5capacityandsystemswithinyearstoachievethevision1–2yearstoachievethevision7.3.1ChallengesandOutputsCh7Fig10NEVsAsistypicalofnascentstagesinnewindustrialdevelopments,therearesixinter-dependentchallengesthataffecttheachievementoftheautomotivesector’stransitiontoNEVs,asshowninFigure11.122JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesFigure11:Sixinter-dependenciesthataffecttheNEVtransitionLimitedfundingincreasestheFundingNEVinvestorsareriskaversedueneedforsupportingpolicytolocalotakeuncertainty1LimitedpolicyincreasesfundingGrantfundingneededtosupportuncertaintyandriskInter-dependenciessupplierdevelopmentthataectthe6PolicyNEVtransition2SupplyInadequateskillsreduces4OEMsexportdemandisforopportunitiestomeetNEVs,whilelocaldemandforsocio-economicpolicySharedNEVsislaggingobjectivesinfrastructureSupplyofNEVstolocalLimitedpolicydecreasesskillsmarketsistoocostlytodevelopmentinvestmentstimulatedemand5Workforceskills3DemandUncertaintyonNEVsgrowthLimitedcharginginfrastructuretrajectorylimitsforwardreducesdemandforNEVsinvestmentsinsectorskillsSlowgrowthinNEVslimitsthebusinesscaseforchargingInadequateworkforceskillsfortheinfrastructureinvestmentNEVvaluechainlimitinfrastructureinvestmentThetransitionoftheautomotivesectorfromICEtoNEVsinthenextdecadewillbeunderpinnedbytargetedinterventionstosupportbothsupply-sideanddemand-siderequirements,assummarisedinTable16.Thechallengestodoingso,thesequencingofmeasuresandgoals,Ch7Fig11NEVsandtheoutputsrequiredtoaddressthesechallengesaredescribedfollowingTable16.Table17showsthesupply-sidefundingrequiredinthenextfiveyearsbyinstrumentforautomotivemanufacturing,automotivesupplychain,andbatteryvaluechaininvestments.Table18setsouttheoutcomesandimpacttargets.Table16:Supply-sideanddemand-siderequirementsSupply-siderequirementsDemand-siderequirementsInvestmentsbyexistingOEMsPublictransportInvestmentsbynewOEMsFleetandlogisticsprocurement,includingroad-to-railInvestmentsinlocalsupplychainmanufacturing,initiativesincludingmineralsandbatterysupplychainsCharginginfrastructureConsumerpurchasesandlocalmarketdevelopmentJETImplementationPlan2023–20271237.3.1.1FundingchallengesOriginalequipmentmanufacturers(OEMs)withautomotiveproductionplantsinSouthAfricahaveproposedthatgovernmentprovidearangeofcashincentivesandtaxreductionstosupportatransitiontoNEVsintheirseven-toten-yearplanningcycles,includingincentivesforlocalconsumeradoptionofNEVs.TheDTICandNTwillmakeannouncementsonthesupply-sideNEVincentiveprogrammeinQ42023/Q12024,buttherearefiscalconstraintstowhatisaffordable.SomeOEMshaveannouncedinitialNEVproductionplansforSouthAfrica,andotherOEMsarelikelytofollowoncethenewAutomotiveProductionDevelopmentProgramme(APDP)NEVincentivesareintroducedbygovernment.Thiswilllikelyspuradditionalinvestmentbycomponentmanufacturers(CMs)tomeetlocalcontenttargets.Demand-sidecashincentivesforprivatevehicleuserstoconverttoNEVsareunlikelytobeviableforthefiscusinthecurrenteconomicclimate.ThiswilllimittheextenttowhichthedomesticconsumermarketscancreatedemandforNEVslocally,withexpectationsthatthesemanufacturingjobswillremainstronglydependantoncurrentandnewexportmarkets,includingtheEuropeanUnion(EU),UnitedKingdon(UK),andUnitedStatesofAmerica(USA).SouthAfrica’sDFIshavetakentheleadinprovidingblendedfinancingsupporttopioneeringNEVprojectdevelopersandmunicipalities,buttheavailabilityoflow-costcapitalisinsufficienttodrivetheseinitiativesatscale.Theprivatesectorisusingcommercialcapitaltofundsomecorporatefleetconversionsandassociatedcharginginfrastructure,wherethetotalcostofownershipwarrantstheseinvestments.Notably,thereareminimalfundsearmarkedfortheNEVsectorinthepledgesofgrantsandconcessionalloansmadebytheInternationalPartnershipGroup(IPG)andotherinternationalfundersofSouthAfrica’sJETIP,eithertosupportlocaldemandorsupply.ThiswillneedtochangetoenableaJustTransitionfromICEtoNEVproduction,andsubsequently,inlocalconsumption.FundingwillalsoberequiredtounlockthepotentialofabatteryvaluechaininSouthAfrica,whichcutsacrossthetransitionplan,asenergystorageisrequiredformobility,renewables,andotherinfrastructure.JETfundsarerequiredtocatalysethissegmentforthebettermentofotherindustriesinlinewithdecarbonisationgoals.124JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesThesupply-sidefundingrequiredinthenextfiveyearsissetoutinTable17,byinstrumentforautomotivemanufacturing,automotivesupplychain,andbatteryvaluechaininvestments.ThegrantfundsproposedforautomotivemanufacturingareinadditiontothecurrentAPDP2AutomotiveInvestmentScheme(AIS)incentiveoverthenextfiveyears.30Fortheautomotivesupplychainandbatteryvaluechaininvestments,theallocationisbasedona30%equitycontributiontothetotalrequirement.Giventheearly-stagenatureofbatterydevelopment,grantfundingofZAR2.8billionisproposed.ComponentmanufacturersandassemblyplantsforOEMs’supplychainscanaffordsmallamountsofcommercialdebtduetothecashgrantsfromAPDP2.Table17:Fundingrequirementsforsupply-siderequirementsofautomotiveandbatteryvaluechains(ZAR’million)from2023to2027/8InitiativesGrants(1)Equity(2)ConcessionalCommercialNotesDebt(3)Debt(4)TaxfreecashgrantAutomotiveassemblyand26538---componentmanufacturing-1500(APDP2NEV)31(A)710125001000Project28003313769-developmentAutomotiverelated16269projects(B)1000ProjectdevelopmentBatteryvaluechain32(C)Totalfundingrequired(D):29338860130(A1)Basedon:DTICTIPS/B&MAnalystStudy.(2021).RecommendationstoadvanceSouthAfrica’sNewEnergyVehicleMarketandDomesticSupplyChainfortheNEVpolicyWhitePaperwhichshowedthatZAR69billionofadditionalAISincentiveswillberequireduntil2035.In2021,theDTICproposeda10%increaseinthecashgrantincentive,whichplacestheminimumfundingrequirementatZAR8.846billionoverthefive-yearperiod.31(A)TheproposedtimingfortheWhitePaper,dueinOctober2023,doesnotallowforincorporationofthatdocumentintheIP,giventhetimeframerequiredtodeveloptheIP,includingCOPcommitments.Therefore,previousstudiesfortheWhitePaperhavebeenutilisedforthistable.ItisnotareflectionoftheSouthAfricanGovernment’scommitment,butsimplywhattheindustryinitiallyrequested.32(C)Grantcalc.=11%XZAR23.65billion.Equitycalc.=30%XZAR23.65billion.ConcessionalDebt=Total–(Equity+Grant);theamountsareindicativeastheyreflectprojectsatvariousstagesofdevelopment.33(C1)BasedontheUKBatteryIndustrialisationCentre(UKBIC)andseedfundingforBritishVolt,undertheUKGovernmentFaradayChallengeprogramme(https://www.ukri.org/wp-content/uploads/2021/10/UKRI-260623-FaradayBatteryChallenge-FundedProjects.pdf).TheUKGovernmentpledged130millionPoundsandsubsequently36millionPoundstowardstheirprogrammetocreateaBritishbatteryindustry.JETImplementationPlan2023–2027125Figure12showsthedemand-sidefundingandinstrumentsneededforthepublictransportandmobileemissionsprogrammesfrom2023to2027/8.Theseestimatesexcludefundingneededforademand-sideincentiveprogramme,whichhasyettobeformulated.ThetotalfundingrequiredforthepublictransportprogrammeisapproximatelyZAR10.46billionandaboutZAR5.88billionforthemobilityabatementprogramme.Theprogrammesassumea50%fundingheadroomabovetheexistingprojectpipelineestimatestocaterfornewprojectsandprogrammecosts.Figure12:Fundingrequirementsfordemand-sidepublictransportandmobilityabatementprogrammes(ZAR’million)5000MobilityPublicemissionstransport40001968FUNDINGREQUIREMENTS(ZARmillion)3834TOTALFUNDINGREQUIRED2468187530001293166534011671158200011541620449125016081000117712931346020232244484176254484494492027/8224224202420252026588410463GrantEquityConcessionalCommercialSource:IDC,fromdataprovidedbytheDBSA,IDC,GreenCape,privateandpublicsectorprojects,publiclyavailableinformation.NEVdemandpathwaystakevariousformsfromretailconsumers,mining,agriculture,last-mileCh7Fig11NEVsdelivery,logisticssupplychains,publictransport,andthee-hailingeconomy.Therearethusdifferenttechnical,infrastructure,andfundingsolutionsforeach.Giventhestart-upnatureoftheseprojects,thefundingmixrequireshigherlevelsofgrant,equity,andconcessionaryfundingtosupportproof-of-concept,piloting,anddemonstrationphases.AlthoughSouthAfricahasamaturefinancialservicessectorandseveralDFIs,thereislimitedscopetoraiseasset-heavypre-seedfunding,andthelocalventurecapitalmarketisrelativelysmall.126JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesWhilsttheapproachintheWhitePaperprioritisestheshiftofproductiontoNEVs,thiswillthereafterneedtobereflectedinincreasedlocalconsumption.Fundingfortheroll-outofcharginginfrastructureisalsovitalandiscurrentlyonlyraisedinassociationwiththemobilityemissions,publictransportprogrammes,andcommercialfleetconversions.Thereisnocurrentprogrammeofnational,provincial,orcity-scaleplanningforelectriccharginginfrastructure.Thischallengeiselaboratedunderthe‘Sharedinfrastructure’section.Requiredactionstoaddressthefundingchallenge:(1)Introductionofgovernment’sNEVincentiveschemeforOEMsandCMs;and(2)NewgrantsandconcessionalloanfinancingsecuredfromglobalanddomesticsourcestoincreasethescaleatwhichNEVmobilityandpublictransportprojectscanbeimplemented.7.3.1.2Supplychallenges„InvestmentbyOEMs:ThescaleandpaceofOEMinvestmentinmanufacturingplantconversionstoNEVproductionwillbeinfluencedbythenatureofgovernment’sincentiveschemeduetobeannouncedin2023/24tosupporttheOEMbusinesscase.Withoutthis,thefutureofOEMproductioninSouthAfricafortheEUandUKNEVmarkets34post-2030willbeatrisk.ReliefoncertainimporttaxesonEVswillassistwithlocalconsumeruptake,thecreationofalocalNEVmarketforOEMstosupply,andthepaceatwhichtransportsectoremissionswillreduce.„Technologyinnovation:LocalinnovationandtechnologydevelopmentinSouthAfricahasstruggledtobridgethegaptocommercialapplications.Theprivatesector’sroleisvitalforscalinginnovationandtechnologydevelopmentbuthasbeenslowtomaterialisedespiteavailableresearchanddevelopmentincentives.TheDepartmentofScienceandInnovation(DSI)throughtheTechnologyInnovationAgency(TIA)establishedthee-mobilityprogramme,uYilo,in2013.Todate,uYilohassuccessfullysupportedseveralenterprises,suchasMellowVans,Microcare,Lattech,EVBackOffice,GoldenArrowBusServices(GABS),ManganeseMetalCompany(MMC),andhasplayedapivotalroleinestablishingaccreditedbattery-testingfacilitiesfortherenewableandautomotiveindustry.uYilorequiresadditionalsupporttoleveragecapabilitiesforlocalmanufacturingscalability.ThroughitsKickStartFund,uYilohasdemonstratedhowtechnologytransfertomarkethappenswithtargetedgrantstostart-upbusinesses,includingsmallandmediumenterprises(SMEs).WithcapitalofonlyaroundZAR3millionperannum,theKickStartFundneedstobescaled-uptounlocktriggerinnovationandadoptionprojects.„Batteryvaluechain:SouthernAfricahasanaturalendowmentofcriticalmineralswhichshouldbethefoundationforbeneficiationandthegrowthofaworld-classbatteryindustrysupplychain.Thekeymineralsincludelithium,manganese,cobalt,nickel,graphite,rare34In2022,threeoutofeveryfourvehiclesproducedwereexportedtotheEUandUK(NAAMSA.2023.AutomotiveExportManual).JETImplementationPlan2023–2027127earths,andcopper.Thebatterycanmakeupmorethan50%ofthecostofanNEV,35makingthisakeyfocusareaforlocalproduction.Theimplicationsfornotlocalisingthebatteryvaluechaincouldmeanthatthelocalcontenttargetof60%by2035willnotbeachieved,andtheimportationofbatteriesbyOEMsmayimpacttherulesoforiginwiththeEU,whichrequireslocalcontentofupto60%toexportvehiclestotheEUdutyfree.Thislocalcontentimperative,alongwiththefactthat,atagloballevel,mobilityapplicationsmakeupabout69%ofbatterydemand,36meansthatthesupportofOEMsiskeyforSouthAfrica’sambitionstolocalisecellmanufacturingandotherNEV-relatedcomponents.TheDTIC,inpartnershipwiththeIDC,isdevelopingabatteryindustryvaluechainstrategy.TheIDChasanactiveprojectpipelinerequiringaboutZAR19billioninvestmentandisalsopartneringwithabatterycellOEMtoundertakeascopingstudyforthelocalisationofcellmanufacturinginSouthAfrica.Forcellmanufacturing,itwillbeimportantforOEMs(NEVsandbattery)todesignatecapitalallocationtoSouthAfricawiththeviewthatAfricaisthenextgrowthopportunity.Challenges,suchasenergy,infrastructure,andrequisiteskillsexistnotonlyinSouthAfrica,butelsewhere.SouthAfricamustavoiddesignationasthelastOEMICEvehicleproductionoutpost.TheremaybeaneedtocreateanAPDPequivalentforcriticalmineralsbeneficiationforcellmanufacturingtoattractinvestmentandbringtheautomotiveandminingsectorscloser.Requiredactionstoaddressthesupplychallenge:(1)Introducegovernment’sNEVincentiveschemefortheautomotivevaluechain;(2)Reviewpolicy-appropriateimporttaxes37onspecificcomponentparts,foratransitionperiod;(3)SourcefinancingtoenableuYilo’sKickStartFundtoscaleitstechnologyuptakesupportforSMEs;(4)Governmenttoadoptstrategyandraisefundingforimplementationofthebatteryindustryvaluechainstrategy;and(5)GovernmenttoexploredevelopinganincentivepolicyforaBatteryCriticalMineralsTrade-RelatedInvestmentMeasures(TRIMS).7.3.1.3DemandchallengesManycountrieshavedemand-sideincentivesforNEVadoptionintheformofcashsubsides,taxincentives,accesstoinnercities,designateddrivinglanes,freeparking,scrappageallowancesforICEvehicles,increasedtaxesonICEimports,amongstothers.38GivenSouthAfrica’sfiscalconstraints,cashincentivesforprivatevehiclepurchasesareunlikely,butotherincentivemeasurescouldbedeveloped,particularlyforpublictransportandlogisticsNEVuptake.35BloombergNEFandIDC,basedonengagementswithOEMsandtakingintoconsiderationotherfactors.36BloombergNEF.(2023).Long-TermElectricVehicleOutlook,2023.Lithium-ionbatterydemandoutlook–EconomicTransitionScenario,BloombergNEF,Avicennedataset.37Taxesincl.importdutiesandadvaloremtax.Althoughimportdutiessupportlocalproduction,advaloremisanexcisetaxongoods.ThecombinationcanincreaseNEVcostby52%.38Indonesia–advaloremof90%onICEV,NEVSexempt;Thailand–exciseduty25%–40%ICEV,0%–8%NEVs,lowerchargingtariffsUSD86/MWh,Singapore–Greenandcarbonemissionsschemes,highertaxesforpollutingvehicles;Malaysia–excisedutytax60%–105%onICEV;Vietnam–exciseduty35%–90%forICEV,5%–15%forNEVs(Source:BloombergNEF).128JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesCurrentfiscalfundingforpublictransportprojectscanpromotetheadoptionofNEVs,includingredirectingsubsidiesforfossilfuels.Publicfundscurrentlyallocatedincludethetaxirecapitalisationandbussubsidyprogrammes.Byreviewingtaxesonpublictransportvehicles,investinginlocalsupplychainsandcharginginfrastructure,andreducingtaxesonthefleetanddeliverysector,itispossibletoincentiviseNEVadoption.Co-ordinationbetweengovernment,transport,andlogisticsindustries,aswellaspublicprocurementoptimisationforscaleeconomies,isessential.Grantfundingisnecessaryfortechnicalassistanceindesigningcost-effectiveNEVprogrammesforpublictransportandlogistics.Othersupportcanincludede-riskinginsurancecoverandassetfinanceforNEVs.LogisticsandpublictransportinSouthAfricacurrentlyhaveasmall-scaleapproachtoNEVadoption.Whilethereisacredibleportfolioofprojects,itlacksbig-ticketitems.TheinvestmentsizeforthepublictransportprogrammeperannumiscurrentlyaboutZAR833million(threeprojects)andforthemobilityprogramme,aboutZAR555million(14projects),plusassociatedinfrastructureprojects.AnotablecaseofcommunityinvolvementandyouthentrepreneurshipistheGreenRidersprojectinCapeTown.But,theimpactofNEVsonsocietyandtheeconomywillonlymaterialisewithscale,thatiswhenlocalisationofvaluechainscreatessustainedandskilledemploymentinmanufacturing-scaleoutput.ThescaleofNEVadoptionisthereforeasignificantdemandchallengetobeaddressedinordertoachievebothclimatemitigationandJustTransitionoutcomesinthetransportsector.Requiredactionstoaddressthedemandchallenge:(1)AcollaborativeplanbetweenDTIC,DoT,thetaxiindustry,subsidisedbuscompanies,provinces,andmetrostoadapttheuseofexistingsubsidiesforpublictransporttoincentiviseconversiontoNEVs;(2)AreviewbyNTofthetaxregimethatisconstrainingdemandforNEVsandthegrowthoflocally-producedNEVandcomponentsmanufacturing,andconsiderationofrelevanttaxreforms;(3)IncreasedinternationalgrantandconcessionalfinancingtargetedthroughtheIDCandDBSAtosupportearly-stagepreparationforagrowingpipelineofmobilityandpublictransportNEVprojectsbyprivatedevelopers;(4)Governmenttaskteamdesignsbalancedandaffordabledemand-sideincentivesforNEVs;and(5)Programmeowners’engagementwithinsurancecompaniesandcommercialbanksonde-riskingNEVadoption.JETImplementationPlan2023–20271297.3.1.4SharedinfrastructurechallengesCharginginfrastructureisvitalfortheNEVtransitionbutisdifficulttofinancewithoutapredictableuserbaseorsubsidies.Furthermore,theinvestmentsareneededinchargingpoints,aswellasforauxiliarycablingandtransformersinelectricitydistributionsystemsthatarealreadybackloggedintheirmaintenancerequirements,supplyconstraint,andarenotdesignedforNEVuse.ThesedistributiongridsarelargelyownedandoperatedbyEskomandmunicipalities,bothofwhicharefinanciallyconstrained.Chargingcapacityrequirementsdiffer,dependingontheNEVsegment’stechnologydesign,scale,phasing,vehicletypes,anddemand.HeavyvehiclesandbusbatterieshavedifferentrequirementstopassengerNEVs.Passengercarsmayultimatelychargeupto70%oftheirneedsathome,heraldingachangedlandscapeforfuellinginfrastructure.Insteadofallowingthiscomplexitytoresultinincrementalandisolatedinvestments,thereisaneedtoplanforoptimalresourceallocationsforNEV-enablingdistributiongridupgradesandtechnologyinstallations.Thecurrentpipelineofbusiness-to-business(B2B)andbusiness-to-government(B2G)NEVprojectsincludecharginginfrastructureinvestmentsfortheirprojectedvolumes,withmostprovidingabufferofabout20%foradditionaldemand,beyondwhichfurtherscaledinvestmentsinchargingstationswouldbeunaffordableperproject.TheseprojectsincludetheuseofRenewableEnergy(RE),tolimitdependenceonelectricitysupplyfromthegrid,andtoreducelong-termcostsandemissions.InthecontextofnonationalincentivestosupportprivatevehicleNEVdemand,charginginfrastructureforthismarketsegmentislikelytogrowinbetter-resourcedlocationsasthecompaniesprovidebespokechargingstationsfortheircustomers.TheNationalAssociationManufacturersofSouthAfrica(NAAMSA)recentlycalledforproposalsforinfrastructureprojectstosupporttheroll-outofnationalcharginginfrastructureforthelightpassengerandcommercialvehiclesmarkets.TherearenogovernmentincentivesforNEVcharginginfrastructure.130JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesTheDTIChasanexistingcriticalinfrastructurefundwhichcouldbeconsideredforprovidingsupporttothedevelopmentofNEVcharginginfrastructure.SouthAfrica’sNationalRoadNetwork’s(SANRAL)nationalroadsnetworkmanagementcouldprovideforthetollroadconcessionairestobuildandoperatecharginginfrastructurebyarrangementwiththeexistingfuelstations.Eskom’sdistributiondivisioncouldtargetcharginginfrastructureasabusinessgrowthopportunity.Requiredactiontoaddressthesharedinfrastructurechallenge:AcollaborativeanalysisbetweenEskomDistribution,SANRAL,NAAMSA,theDTIC,DoT,IDC,andDBSA,andprivatesectorplayersofSouthAfrica’sNEVcharginginfrastructureshort-andlong-termneeds,currentdevelopments,andopportunitiesthatresultinaco-ordinatednationalstrategyandplanforinvestmentstoscale-upoverthenextfiveyears.7.3.1.5SkillsandtransformationTheNEVtransitionwillrequirenewskillsandtheupskillingofexistingtalentsupportedbyindustryandSouthAfrica’sinstitutionsofhighereducationandtraining.Trainingprogrammes,however,needtodevelopintandemwithemploymentopportunitiesintheevolvingsector,andwillhelptostimulatesuchemployment.IndustryassociationshavestartedskillsmappingfortheNEVsector.SkillsdevelopmentinthesectormustequallysupportopportunitiestogrowthenumberofblackbusinessesintheNEVvaluechain.Theskillschallengesandroadmapforaddressingthemareelaboratedinthe‘Skills’chapteroftheJETImplementationPlan.Requiredoutputtoaddresstheskillschallenge:AconsolidatednationalskillingandjobtransitionprogrammethataddressestheevolvingcapabilityrequirementsoftheNEVsector.3939WorkonskillsrequirementshasbeendonebyNAAMSAandNationalAssociationofAutomotiveComponentandAlliedManufacturers(NAACAM).JETImplementationPlan2023–20271317.3.1.6PolicyandregulationTheDoTiscurrentlyupdatingitsGreenTransportStrategywhichwaspublishedin2018.TheDTIC’sNEVGreenPaperwasissuedin2021,andaWhitePaperonNEVsisduetobepublishedinlate2023.TheDTICandNTarecurrentlyfinalisingtheupdatedAPDP2incentivepolicyforNEVproduction.NAAMSAhasbegunengagingDoTandtheNationalRegulatorforCompulsoryStandards(NRCS)onupdatingregulationsforcommercialvehiclestoswitchtoNEVs.Government’spolicyandregulatoryregimeforNEVsisthusintheprocessofbeingclarified.In2022,63%ofOEM’sautomotivevehicleproductioninSouthAfricawasexported,and37%wassoldlocally.InthecontextofrapidlychangingNEVpolicyandregulatoryregimesinthetradingpartnercountries,thereisacallforSouthAfrica’sNEVpolicyandregulatoryregimetobeexpeditedandforittoprovideacomprehensiveincentivepackagethatsimultaneouslyprotectstheOEM’sabilitytoretainandgrowitslocalmanufacturingbaseforNEVproduction,incentivisesinvestmentinlocalbatterymanufacturingandcharginginfrastructure,andpromotestheuptakeofelectricmobility,evenifinitiallyforpublictransportandlogistics.Simultaneously,thereareanumberofinternationaltradechallengesthattheDTICisaddressing.SouthAfrica’stradeagreementwiththeEUallowsforduty-freeimportsofautomotivevehiclesintotheEUif60%ofthecomponentsaremanufacturedinSouthAfricaandtheEU.Batteriesandtheircomponents(>50%ofNEVcost)aremainlysourcedfromChina,posingachallengetothisEUtradeagreement.Atthesametime,theEUGreenDeal,Fitfor55,40thebatterycertificate,andCarbonBorderAdjustmentMechanism(CBAM),41imposeregulationsontailpipeemissions,supplychainemissions,andtheuseofrecycledbatteryminerals,whichcouldmakeitincreasinglychallengingforSouthAfricatoexportcertainautomotiveproductstotheEUinthelong-term.TheUSAInflationReductionAct(IRA)favoursUSA-madeNEVsandEVbatteriesandofferspreferentialtreatmenttoFreeTradeAgreement(FTA)countries,andcountrieswithbilateralcriticalmineralsagreementswiththeUSA.SouthAfricadoesnotenjoythistreatment,astheAfricanGrowthandOpportunityAct(AGOA)isnotaFTA.ThisposesanadditionalpotentialchallengeforSouthAfrica’sbatterymineralbeneficiationandregionalvaluechainambitions,whilstpresentinganopportunityforpartnershipthroughacriticalmineralsagreementforbeneficiatedbatterymineralsandprecursormaterial,andalsoallowingtheUSAtode-riskitssupplychain.4240Vehiclesmustemitlessthan55%emissionsby2030and100%by2035,basedon2021emissionsgCO2/km(https://www.europarl.europa.eu/news/en/press-room/20230210IPR74715/fit-for-55-zero-co2-emissions-for-new-cars-and-vans-in-2035).41TIPS.(2023).TheEuropeanUnion’sCarbonBorderAdjustmentMechanismandImplicationsforSouthAfricanExports.42TheUSAcurrentlysourceabout46%nickelandlithiumand77%cobaltfromnon-FTAcountriesandisforecasttomissits2029100%localcontenttargetforbatteries(S&PGlobalMarketIntelligenceInflationReductionAct:ImpactonNorthAmericametalsandmineralsmarket:FINALREPORT,August2023).132JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesRequiredactionstoaddressthepolicyandregulatorychallenge:(1)FinalisedNEVpoliciesbyDTICthatresultinnewinvestmentcommitments;(2)AgreementbetweenSouthAfricaandtheEUonanautomotivetradetransitionplanthatallowscontinuedexportstotheEUwhilethelocalindustrytransitionsitsproductionsystems;and(3)ContinueddevelopmentbyindustryandregulatorsonregulatoryandconformitystandardsforNEVs.7.3.2OutcomesandImpactsAnunderstandingofthechallengesandtheidentificationofkeyactionstoaddressthem,enablesthetargetingofshort-termoutcomes(measurablechangesincapacityandsystemswithinonetotwoyears)andmedium-termoutcomes(measurablechangesinperformancewithinthreetofouryears).Tobuildthisintoaprogrammeplan,institutionalownersareassignedtoeach,assummarisedinTable18onthenextpage.JETImplementationPlan2023–2027133Table18:Summaryofchallenges,keyactions(outputs)andoutcomes,withtheassignmentofinstitutionalleadsChallengeKeyactions(outputs)Institutional1Fundinglead(1)Introductionofgovernment’sNEVincentiveschemeforDTIC2Supplyautomotivevaluechain(VC)IDC(2)NewgrantsandconcessionalloanfinancingsecuredfromglobalanddomesticsourcestoincreasethescaleatwhichNEVNTmobilityandpublictransportprojectscanbeimplemented(1)ReducedimporttaxesonNEVsandspecificcomponentparts,suchasbatteriesandpowerelectronics(2)FinancingsourcedtoenableuYilo’sKickStartFundtoscaleitsIDCtechnologyuptakesupportforSMEsDSI(3)SouthAfricanNationalBatteryValueChain(VC)StrategicPlanIDCdevelopedDTIC3Demand(1)AcollaborativeplanbetweenIDC,DBSA,DTIC,DoT,thetaxiDoTindustry,subsidisedbuscompanies,provinces,andmetrostoadapttheuseofexistingsubsidiesforpublictransporttoincentiviseconversiontoNEVs(2)AreviewbyNTandtheDTICofthetaxregimethatisNTconstrainingdemandforNEVs(3)IncreasedinternationalgrantandconcessionalfinancingJETPMUtargetedthroughtheIDCandDBSAtosupportearly-stagepreparationforagrowingpipelineofmobilityandpublictransportNEVprojectsbyprivatedevelopers(4)GovernmenttaskteamdesignsbalancedandaffordableDTICdemand-sideincentivesforNEVs,anddisincentivesforcarbonNTintensivetailpipeemissionsEngagementwithinsurancecompaniesandcommercialbanksonIDCde-riskingNEVadoptionDBSA134JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesShort-termoutcomes(onetotwoyears)Medium-termoutcomes(threetofouryears)NewincentivesupportsOEMbusinesscaseOEMsdecidetoinvestinSouthAfricaforbatteryelectricforNEVinSouthAfricavehicle(BEV)productionCurrentprojectsadvancetoimplementation;MostpublicsectorbusfleetsaretransitioningtoNEVs;andpipelineofNEVmobilityandpublictransportlogisticsfleetconversionmovestoscaleprojectsincreasesThepipelineofNEVmobilityandpublicMostpublicsectorbusfleetsaretransitioningtoNEVs;andtransportprojectsincreasesduetolowerlogisticsfleetconversionmovestoscalecostprojectionsTheKickStartFundsupportsdoubletheSMEgrowthandemployment,skillsdevelopmentnumberofSMEstotakeupnewtechnologysolutionsStrategyadoptionbythegovernmentandInvestmentplanningforbatteryindustryopportunitiesfundingraisedforimplementationoftheincreasesinscaleandscopebatteryindustryVCstrategyEstablishedbatterymineralandprecursorsupplychainBankablebusinesscasesforbatteryindustryprojectsOEMannouncementsoninvestmentinSouthAfricaforcellmanufacturingoverthenextseventotenyearsSolutionoptionsidentifiedbyrole-playersLowerprojectcostforpublictransportNEVprojectsandarecostedandreviewedbyrelevantimprovedviabilityauthoritiesIntroductionofincentivestounlocknewinvestmentsinpublictransportTaxanalysisidentifiesviableoptionstoTaxreformsboostNEVsectorgrowthstimulateNEVdemandcoupledwithlocalproduction,forconsiderationbyrelevantMostpublicsectorbusfleetsaretransitioningtoNEVs;andauthoritieslogisticsfleetconversionmovestoscaleDemand-sideincentivesanddisincentivesimplementedCurrentIDCandDBSA-supportedprojectsBanksandinsurerslessriskaversetowardsNEVsadvancetoimplementation;pipelineofNEVmobilityandpublictransportprojectsincreasesInternationaltechnicalassistancesupportsgovernmenttodesigndemand-sideincentivesanddisincentivesLowerinsurancepremiumsforNEVsAffordableassetfinanceproductsforNEVsJETImplementationPlan2023–2027135ChallengeKeyactions(outputs)Institutionallead4SharedAcollaborativeanalysisbetweenstakeholders,NEVcharginginfrastructureinfrastructureshort-andlong-termneeds,currentdevelopments,Eskomcurrentcriticalinfrastructurefunds,andopportunitiesthatresultsDistributioninaco-ordinatednationalstrategyandplanforinvestmentstoNAAMSAscale-upoverthenextfiveyears5SkillsAconsolidatednationalskillingandjobtransitionprogrammethatNAAMSA/addressestheevolvingcapabilityrequirementsoftheNEVsector,NAACAM6Policyandisdevelopedregulations(1)FinalisedNEVpolicybyDTICDTIC(2)UpdatedGreenTransportStrategybyDoTDoT(3)AgreementbetweenSAandtheEUonanAutomotiveTradeDTICTransitionPlanthatallowscontinuedexportstotheEUwhilethelocalindustrytransitionsitsproductionsystems(4)ExploredevelopingacriticalmineralsbenefitsincentivepolicyDTICNTDMRE(5)FurtherdevelopregulatorystandardsforNEVsDTICNRCS136JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesShort-termoutcomes(onetotwoyears)Medium-termoutcomes(threetofouryears)AsharedNEVChargingInfrastructurePlanisInvestmentscommenceaccordingtotheNEVChargingapprovedbyrelevantauthorities,attractingInfrastructurePlaninterestbyinvestorsNationalNEVskillingprogrammeagreedSkillsprogrammeroll-outbetweenindustryandtrainingauthoritiesPolicycertaintyandfinalgovernmentPolicycertaintyleadstoinvestmentdecisionsroadmapandpositionannouncedCurrentautomotiveexportstoEUareprotectedunderanCurrentautomotiveexportstoEUareagreedtimeframeforNEVtransitionprotectedunderanagreedtimeframeforNEVtransitionAnnouncementbymajorbatteryOEMofintentiontoinvestincellmanufacturingPolicystepstopromoteSouthAfrica’sAttractsupplychaininvestmentambitiontobecomethecriticalmineralsbenefactionshubforSub-SaharaAfricaRegulatoryregimeimplementedRegulatorycertaintyleadstoinvestmentdecisionsMeasurableoutcomeswillbequantifiedasoutlinedinTable19.JETImplementationPlan2023–2027137Table19:Quantifiableoutcomemeasures2023–2027/8Grantfundingsecured(ZAR‘million)Current20252027/8Concessionalfundingsecured(ZAR‘million)-ZAR4400ZAR5530Fundingadvancedtopublictransportprojects(ZAR’million)-ZAR1200ZAR20000Fundingadvancedtomobilityprojects(ZAR‘million)-ZAR830ZAR3331Fundingadvancedforcharginginfrastructure(ZAR’million)ZAR760ZAR1965NumberofNEVprojectsfundedZAR272ZAR318ZAR1059NumberofSMEs(localisation/manufacturing)Transportsectoremissionsreduction(CO2tonne/p.a.)4818OEMinvestmentannouncements2712FundingadvancedforbatterysupplychainprojectstbctbcNumberofdirectjobscreated224tbcZAR236704001000tbcIncludingassociatedinfrastructure.TheimpactoftheseNEVsectorinterventionswillbemeasurableinGHGemissionsabatementinSouthAfrica’stransportsector,improvedairquality,improvedandcheaperpublictransport,automotivesectorsupplychaingrowth,increasedemploymentinagrowinglocalisedbatteryvaluechain,mineralsbeneficiationandindustrialisation,relatedskillsdevelopment,andapositiveimpactonthecurrentaccountbalanceduetolowerfuelimports.ThevaluepropositionforSouthAfrica’stransitiontoNEVscanthereforebeseenacrossfourdimensions:economicgrowthandinvestment;JustTransitionforsectorworkersandtransportusers;sectordecarbonisation;andGreenandsustainablemanufacturing.138JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesTable20:ImpactofNEV’ssectorinterventionsImpact(JETIP)Impact(wider)MeasurablemetricsSMEdevelopment(numberofSMEs)Contributiontosavingmanufacturingjobsintheautosector(using2022asbaseyear)CO2emissionreduction(CO2g/km)ContributiontoSouthAfrica’sexportsandtradeAutomotiveindustryemployment(numberofjobsretainedrelationswithEU,UK,andUS(exportdata)andadded)AttractingFDItoSouthAfrica(FDIperinvestment)Empoweringyoungjobseekers(numberofyouthjobscreated)ContributiontolowerfuelimportscostsPubliccharginginfrastructureinstalled(numberofAirqualityimprovement(airqualitymeasures)chargers)Tailpipeemissionsreduction(reductioninICEvehicles)Lowerinvestmentcarbonfootprint(CO2gabated/ZAR(USD))7.4NEVJETPortfolioBuildingontheJETIP2023–2027,theNEVJETPortfolio(Tables21,22,and23)comprisesthreeelements:1.Theintroductionofsupply-sideincentivesfortheautomotiveindustrythatwillunlockNEVproductionandNEVsupplychaininvestmentsandprotectautomotivemanufacturingemployment.ThefundingrequirementforthisisapproximatelyZAR26.5billionoverfiveyears.2.AnNEVprogrammeattheIDCthatmobilisesfundingforandsupportsprojectpreparationinNEVautoassemblyandsupplierparks,componentmanufacturingandsupplychains,batterymineralsextractionandbeneficiation,batteryprecursormaterialsandcomponents,logisticsandcommercialfleets,andassociatedcharginginfrastructure.ThefundingrequirementforthisprogrammeisapproximatelyZAR34.5billionoverfiveyears.3.AnNEVpublictransportprogrammeatDBSAthatmobilisesfundingandprojectpreparationsupportforpublictransportprojects(taxisandbuses)andtheassociatedelectriccharginginfrastructure.ThisfundingrequirementisapproximatelyZAR10.55billionoverfiveyears.Theplanessentiallyrepresentstheintentiontoscaleuponportfoliosofpilotprojectsandprogrammesthatarecurrentlyunderway,totestmodels,andmobilisegrantandconcessionalfinancingthatcanimprovetheirviabilityandattractmoreinvestors.OncegovernmentNEVpolicyisadopted,demandandsupplypathwayswillallowthesepioneeringinitiativestobereplicatedandNEVstobecomenormalisedinSouthAfrica’stransportsystem.NoprovisionhasJETImplementationPlan2023–2027139beenmadeintheforecastfundingforend-userprivateNEVincentives,pendingthefinalisationofgovernmentpolicyfordemand-sideincentives.Table21:ProposedNEVPortfolioandestimatedinvestmentrequired43ProgrammesOwnerDescription(label)NEVsupplychaininvestmentDTIC(P1)InvestmentsrequiredfortheautomotivesupplychaintotransitiontoNEVsandNEVautoprojects,includingassembly,infrastructure,andcomponentmanufacturingforbothlocalandexportapplicationsNEVauto-relatedprojectsIDC(P2a)Newautoprojectsincludeassembly,infrastructure,andsupplierpartprojectsacrossscoping,piloting,andcommercialisationphasesforbothlocalandexportapplicationsNEVbatteryandcriticalmineralIDC(P2b)NEVbatterymineralprojectsincludeinvestmentsinsupplychain/batterycellbatterymineralextractionandbeneficiation,andthemanufacturingdevelopmentofprecursormaterialsandcomponentsMobilityemissionsprogramme/IDC(P2c)DecarbonisingtheNEVmarketsegmentsforgoodsandfundservices,logistics,privatetransport,andgovernmentfleets;charginginfrastructure;andenergystorage(includingassociatedinfrastructureandprogrammesupport);supplychaininvestmentsinlocalassemblyPublictransportprogrammeDBSA(P3)Supportinvestmentsinpublictransport,suchasbuses,taxis,andfleets;fundingthecharginginfrastructureandintegratedenergystorage(includingassociatedinfrastructure);supplychaininvestmentsinthelocalassemblyTotalfundingrequiredTotalfundingrequired(publictransportandmobility)Note:TheNEVPortfolioisnotexhaustiveandmaynotincludeprojectsthataresourcingfundingdirectlyfromlocalandinternationalfinancing.43(P1)FromtheTIPSB&MAnalystNEVstudyfortheDTICWhitePaper,estimatingthatZAR69billionwillberequiredbytheautomotivesectoruntil2035.TheZAR26.5billionisforafive-yearperiod.(P2a)Automotive-relatedinvestmentsareIDCprojectsandanearly-stageestimationforanewassemblyplantandsupplierpark.(P2b)NEVbatterymineralandmanufacturing-relatedprojectscomprisedofZAR19billionforbatterymineralprojectsandZAR4billionforbatterycelldevelopmentandpilotcellmanufacturingplant.ZAR4billionisbasedonsimilarinvestmentsmadebytheUKGovernmentfortheirbatteryprogrammeandestablishingBritishVolt,GBP166million.Publictransportandmobilityemissionsprogrammesarebasedonexistingprogrammesandprojects.Eachprogrammehasanadditional20%allocationforassociatedenergyinfrastructure.(P2c)ThemobilityprogrammehassupportfundingofZAR500millionallocated.(P3)ThepublictransportprogrammehasaZAR2.0billionallocationfortechnicalassistance,innovationandcapacitydevelopment.140JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesEstimatedtotal202320242025202620272027/8investmentZAR‘millionJETIPJETImP2653826538APDPNEVcashincentiveunderdevelopment85195000Variousprojectsfrompre-feasibilitytobankable505023670Variousprojectsfrompre-feasibilitytobankable6800594412665728961652156261001046310171669233628372605577407161613324132821427415528152081640822832240323244874166JETImplementationPlan2023–2027141Table22:Mobility,automotivesupplychain,andbatterymineralsProgrammeownerOnIncluding:trackFundingrequiredAutomotive=ZAR5billionZAR34.5billionBatteryVC=ZAR23.67billione-Mobilityemission=ZAR5.8billionAssociatedinfrastructure=ZAR545millionKeystakeholdersLocalexamplesofprogressGovernment:DTIC,NT,DMRE,DHETMobilityIndustry:NAAMSA,NAACAM,EnergyCouncilƒPipelineofZAR3billionFunders:Partnercountries,DFIs,commercialƒLocalSMEs–GreenRiders,MellowVans,Everlectric,banksInnovation:uYilo,CSIRValternative,ScootHeroRegulations:NRCS,SABSEducation:DHET,SETAs,universitiesInfrastructureƒInvestmentsbyRMBandStanLibinchargingƒLocalSMEs–ZimiChargers,Aeversa,Gridcars,andRubiconrolling-outchargersƒNon-MotorisedTransport(NMT)projectsBatterymineralsƒIDCbatterymineralpipelineofZAR19billionAutomotiveƒZAR4.86billioncomponentsupplyinvestmentsƒBMWZAR4.5billionNEVinvestmentScienceandInnovationƒuYiloe-mobilityprogrammeandfundInput(challenges)FundingƒAppropriatefundingtosupportallbusinessSupplyƒLocalisationandproductionofNEVsandmodelsandstagesacrosstheNEVsegmentsandvaluechainsbatterycellsiscriticalforregionaldevelopmentandsupportofourautomotivemanufacturingPolicy&RegulationstransitionƒIncentivesforBEVSandFCEVsƒSupportforinnovationandcapacitydevelopmentƒTradepoliciesbetweenSouthAfricaandtheEU/DemandUKandtheUSAƒMechanismtosupportuptakeofNEVsƒIncentivesforbeneficiationofbatterymineralsƒChargingInfrastructureSupportandcellmanufacturingƒOthersharedinfrastructure,suchasEVCo-ordinationhomologationtestingstationsNRCS,SABSƒCo-ordinationacrossJETwillbecrucialtotheEducationeffectiveimplementationoftheprogrammesƒDHET,SETAs,universities142JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesActionstodeliveroutcomesOutcomesƒNEVpolicyfinalisedbyDTICandNT(Q42023)ƒStablepolicyframeworkandroadmapforSouthAfrica’stransitiontoNEVsƒTrademeasureswiththeEUandUKwhichmitigatesagainstunintendedconsequencesofƒPartnercountriescommitfundstoNEVsthetransitionontheautomotivesectorImplementationPlanƒOEMstodeveloptheirbusinesscaseforNEVƒInvestmentbytheautomotiveandbatteryOEMsproductioninSouthAfrica,onthebackoftheNEVpolicyƒFundingprogrammesforpublictransportandmobilityabatementƒExploremechanismforabalancedandaffordabledemand-sidesupportƒGrantandconcessionalfundingprovidedbypartnercountriesƒIDCtocreateafundingprogrammeformobility,infrastructure,andsupplychaininvestmentandƒFundingpartnershipsestablishedbetweenIDC,broaderinitiativesDBSA,andpartnercountryfundersƒIDCtofundinnovationandcapacityƒSouthAfricatoretainexportbenefitapreferentialdevelopmentmeasureforNEVsƒIDCtosecurefundingfrompartnercountriesƒIncreasedfundingfore-mobilitytechnicalandinstitutionsassistanceandpilots(minZAR30millionperannum)ƒEstablishmentofaJETco-ordinationunitatanationalleveltosupportprogrammesandƒIncreasenumberofstart-upsandSMEsfundedprovideoversightƒCapacityandskillsdevelopmentfundedbyIDCƒDTICtodeliverSouthAfricanationalbatteryprogrammevaluechainstrategiesandgameplan,andco-ordinateimplementationofthestrategyƒDemand-sidesupportandincentivesforNEVsdevelopedƒPartnercountriestofacilitateinvestmentandstrategicpartnershipbetweentheirOEMsandƒGrowingpipelineofnewtransactionsandprojectstheIDCƒEstablishedbatterymineralandprecursorsupplyƒDTIC,withNTandDMRE,toexploredevelopingchainacriticalmineralsbeneficiationandcellmanufacturingTRIMSincentivepolicyƒOEMannouncementoninvestmentinSouthAfricaforcellmanufacturingoverthenextseventotenyearsƒWell-co-ordinatednationalandprogrammaticimplementationofJETIPJETImplementationPlan2023–2027143Table23:PublicTransportProgrammeProgrammeownerOnFundingrequiredIncluding:trackAssociatedinfrastructure=ZAR833millionZAR10.6billionTechnicalassistance=ZAR2billionKeystakeholdersLocalexamplesofprogressGovernmentFundingƒNT,DoT,local,andprovincialgovernment.ƒZAR2.3billionforDBSApublictransportprogrammeIndustryƒTransportsectorPipelineFundersƒZAR4.2billion;projectsincludingGA,FlexEV,2CitiesƒPartnercountries,DFIs,commercialbanksInnovationInfrastructureƒuYilo,CSIRƒBusoperators,FlexEVRegulationsƒNRCS,SABSScienceandInnovationƒStellenboschUniversityandRhamEquipmente-minibusprojectInput(challenges)SupplyPolicyandRegulationsƒHighcostofNEVsforpublictransportprojectsƒPublictransportpolicyincentivesarenotsufficient(+54%dutiesandtaxes)forNEVsƒGridinfrastructureandrenewablessupportƒDecentralisedprocurementforaggregationofsupplymodelsDemandƒNeedtodevelopamechanismtosupportdemandCo-ordinationƒCo-ordinationacrossJETwillbecrucialtotheoruptakeofNEVseffectiveimplementationoftheprogrammesƒChargingInfrastructureSupportƒCo-ordinationacrosscitiesandprovincesforFundingpublictransportprojectsƒAppropriatefundingtosupportallbusinessmodelsandstagesacrosstheNEVsegmentsandvaluechains144JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesActionstodeliveroutcomesOutcomesƒNEVpolicyfinalisedbyDTICandNT(Q42023)ƒStablepolicyframeworkandroadmapforSouthAfrica’stransitiontoNEVsƒTrademeasureswiththeEUandUKwhichmitigatesagainstunintendedconsequencesofƒPartnercountriescommitfundstoNEVsthetransitionontheautomotivesectorimplementationplanƒOEMstodeveloptheirbusinesscaseforNEVƒInvestmentbytheautomotiveandbatteryOEMsproductioninSouthAfrica,onthebackoftheNEVpolicyƒFundingprogrammesforpublictransportandmobilityabatementƒExploremechanismforabalancedandaffordabledemand-sidesupportƒGrantandconcessionalfundingprovidedbypartnercountriesƒIDCtocreateafundingprogrammeformobility,infrastructure,andsupplychaininvestmentandƒFundingpartnershipsestablishedbetweenIDC,broaderinitiativesDBSAandpartnercountryfundersƒIDCtofundinnovationandcapacityƒSouthAfricatoretainexportbenefitapreferentialdevelopmentmeasureforNEVsƒIDCtosecurefundingfrompartnercountriesƒIncreasedfundingfore-mobilitytechnicalandinstitutionsassistanceandpilots(minZAR30millionp.a.)ƒEstablishmentofaJETco-ordinationunitatƒIncreasenumberofstart-upsandSMEsfundedanationalleveltosupportprogrammesandprovideoversightƒCapacityandskillsdevelopmentfundedbyIDCprogrammeƒDTICtodeliverSouthAfricanationalbatteryvaluechainstrategiesandgameplan,andco-ƒDemand-sidesupportandincentivesforNEVsordinateimplementationofthestrategydevelopedƒPartnercountriestofacilitateinvestmentandƒGrowingpipelineofnewtransactionsandprojectsstrategicpartnershipbetweentheirOEMsandtheIDCƒEstablishedbatterymineralandprecursorsupplychainƒDTIC,withNTandDMRE,toexploredevelopingacriticalmineralsbeneficiationandcellƒOEMannouncementoninvestmentinSouthAfricamanufacturingTRIMSincentivepolicyforcellmanufacturingoverthenextseventotenyearsƒWell-co-ordinatednationalandprogrammaticimplementationofJETIPJETImplementationPlan2023–20271457.5NEVJETGovernanceEachoftheJETImplementationPlanPortfolioswillbedrivenbyinstitutionsthathaveboththecapacityandmandatetohostandleadmulti-facetedinvestmentprogrammes.FortheNEVsector,thegovernanceandinstitutionalmechanismwillbeestablishedafterfurtherengagementandfinalisationwithkeystakeholders.Thereisawell-establishedautomotiveindustrystructureoperatingundertheexecutiveoversightoftheMinisterofTrade,IndustryandCompetition,whichincludestheautomotiveindustryleadership,tradeunionleadershipandgovernment.Thisstructuremanagesvariousworkstreams,someofwhichinterfacewiththeNEVprogrammesandtheSkillsPortfoliosetoutinthisImplementationPlan.TherecommendedoptionfortheJETNEVcoordinationroleis,therefore,toexpandtheexistingautomotivestructuremandatestoincludetheNEVwork.AfurtherrecommendationisthatadedicatedJETNEVSecretariatrolebelocatedattheIDCtoprogrammemanagetheday-to-dayNEVPortfoliowork.Regardlessofthefinalgoverningmechanism,thefollowingneedtobeinplacefortheNEVPortfoliotogaintraction:„ANEVcoordinatingstructurecomprisingrepresentativesfromDTIC,DoT,DSI,NT,DBSA,industryassociations,organisedlabour,civilsocietyorganisations,amongstothers„Relevantinstitutionsappointedtomanageworkstreams/programmes,asagreedbythecoordinatingstructuretoachievetargetedNEVoutputsandoutcomes„DedicatedJETNEVSecretariatsupporttoNEVworkstreams/programmeswhichcanalsoprocuretechnicalassistanceasneeded„JETNEVSecretariatworkingwiththeJETPMUtomobilisefinancing(grants,concessionalloans,commercialloans,guarantees)tosupporttheNEVPortfolioofinvestmentprojects„Monitoringofactivities,outputs,outcomes,andimpactsoftheNEVprogrammesandprovidingpublicreportsonresults.TheNEVprogrammesidentifiedinthisImplementationPlanshouldbeledbytherelevantinstitutionsthataremanagingthework,asindicatedinFigure13.146JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesFigure13:ProposedJETNEVCouncilJETNEVCO-ORDINATINGSTRUCTURE„MonitorsdeliveryofJETNEVImplementationPlanacrossworkstreams,ensuringkeyrole-playerparticipationandresults„ProvidesprogressreportstoJETPMUinPresidencyforJETGovernmentSteeringCommitteandJETInter-MinisterialCommitteereviewsMembersJETNEVSecretariatGovernment:IDC-basedprogrammemanagementofficeDTIC,IDC,DSI,CSIR,Eskom,SALGA,„SinglepointofcontactforpublicandprivateMetros,SANRALpartiesworkingonNEVinvestmentsIndustryassociations:„SupportscouncilandworkstreamstoensureNAAMSA,NAACAM,labourunions,alignment,integration,andvisibilitycivilsociety„MobilisesfundingforWorkstreams„Mobilisesfundingforprojectdevelopers„ConvenesforumsofprojectdeveloperstoidentifychallengesandaccesssupportWORKSTREAMSAutosectorMobilityPublicBatteryChargingtransportvaluechaininfra-DTICIDCstructureNAAMSA,ProjectDBSAIDCNAACAM,NTdevelopersEskomDOT,Metros,NTDTIC,NT,DMRE,DistributionOEMsDOT,SANRAL,Metros,NT„Singleinstitutionalowner(JETNEVMember)responsibletodriveeachworkstream’stargetoutput„Keyrole-playersfromJETNEVCouncilandothersaremembersofeachworkstream,fulfillingdefinedfunctionsInstitutionalownerStakeholdersJETImplementationPlan2023–2027147AnnexureA:RiskMatrixThetablepresentstheImplementationPlanrisks,institutionsresponsibleformitigatingtherisk,andtheresidualrisks.Dependenciesonotherstakeholdersarealsoindicatedasthismaycreatebarrierstomanagingrisks.RiskInstitutionDependenciesLikelihoodofImpactresponsibleoccurringInternationalgrantfundingisnotprovidedPresidencyIPG,nationalHighMediumtosupportNEVimplementationplangovernmentTaximplicationsforcountry-to-countrygrantNTIPG,NationalLikelyMediumfundingNograntfundingprovidedPresidencyIDC,NT,DBSAHighMediumDTICNEVpolicyupdatedoesnotDTICDTIC,NTUnlikelyHighmaterialiseIDC/DBSAUnlikelyHighDTICProgrammesarepoorlydesignedtoachievePresidencyimpactPoorco-ordinationbetweenstakeholdersPresidencyPG,PMU,otherUnlikelyHighFundingprovidedbyIPGnotalignedwithPresidencyIPG,DFIsHighHightheprogramme’srequirementsIDCDBSA,NTLikelyMediumHighcostoffundingprovidedEskomloadsheddingEskomEskom,HighMediumEskommunicipalitiesLikelyMediumUnderestimationofthecostofauxiliaryDBSALikelyMediuminfrastructureupgradesEskom,municipalitiesPublictransportprojectshinderedbystakeholderissuesMunicipalities,cities,taxiassociations,busoperators148JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesMitigant(linktoinstitutionresponsible)Residualrisk(can’tmitigate)PartnercountriescommittosupportingNEVplanGrantfundinginsufficientforneedsBilateralcountryagreementsrequiredandalignedCountrieswithoutbilateralagreementswon’tbeabletowithrequirementsfromNTfordevelopmentgrantsprovidegrantsNTtoprovideadditionalcashgrantincentivesLimitedfundingforearlystageandpilotsthroughexistingindustrialandtransportpoliciesNewincentivesnotattractiveforNEVlocalisation;DTICdevelopedframeworkforCabinetSouthAfricabecomeslastoutpostforICEVsconsiderationbyOctober2023SomeinvestmentsmayfalloutsideoftheprogrammesProgrammestobedesignedinacollaborativeormaynotmeettherequirementsorcriteriaprocesswithstakeholdersandmandatesclearlydefinedIPGcountryDFIsundertakeowninitiativesandprogrammesPresidencytosupportco-ordinationwithprogrammeowners(IDC,DBSA,DTIC)IPGfunderstolendsNGOsandlendersoutsideofprogrammeIPGfunderstoinvestinprogrammealignedfundsIPGfundingshouldhaveasignificantgrantGiventhehighinterestrateenvironment,costofcomponenttooffsetriskpricingand/orprovidefundingwillbehighdeepconcessionaryfundingEskominterventionsandincreasedREandgridLoadsheddingleastforanotherfiveyearsbutatlowerinvestmentoff-setsgenerationconstraintslevels(<2000MW)EskomarelookingatgridupgradesforEVsandMunicipalitiesmainlyresponsibleforgridupgradesanddevelopmentproductsforcustomerscosts;higherCAPEXexpenseDBSAandDoTtoensurethatprojectsandcitiesareSecondarycitiesandsmallprovincesmayfalloutsidealignedofprojectscope;onlymaincitiesalignJETImplementationPlan2023–2027149RiskInstitutionDependenciesLikelihoodofImpactresponsibleoccurringCostofNEVsdoesnotcomedownandachievepriceparitywithintwotothreeNTDoTUnlikelyHighyearsIDCDFIs,IPGLikelyHighFunds/programmestakemorethan12monthstoestablishanddisburseIDCNationalUnlikelyHighSouthAfricadoesnotsecurethefundinggovernment,orIPformanufacturingofbatterycellsforvariousmarketsindustry,funders150JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesMitigant(linktoinstitutionresponsible)Residualrisk(can’tmitigate)Demand-sidepoliciescanbeemployedbyNTandNEVpricesreachparityoverlongerperiodduetorawDoTtosupportadoptionmaterialshortagesIDCfast-trackdevelopmentandimplementationofInstitutionshavetheirowninternalprocesseswhichprogrammes.willdelayimplementationofprogrammes.IDCactivelypursuingpartnershipwithglobalSouthAfrica’sdemandnotbigenoughforcellbatteryOEMs;IDCacceleratesinvestmentinbatterymanufacturing;autoOEMssourcingfromdifferentsupplyvaluechainandowninvestmentstobringbatteryOEMs,limitingscaleeconomiesNEVstoSouthAfricaJETImplementationPlan2023–2027151AnnexureB:DetailedImplementationPlanProgrammesDescriptionNEVsupplychaininvestmentsInvestmentsrequiredfortheautomotivesupplychaintotransitiontoNEVsandNEVautoprojectsincludeassembly,infrastructureandcomponentmanufacturingforbothlocalandexportapplicationsNEVauto-relatedprojectsNEVautoprojectsincludeassembly,infrastructureandsupplierparkprojectsacrossscoping,piloting,andcommercialisationphasesforbothlocalandexportapplicationsNEVbatteryandcriticalmineralsupplyNEVbatterymineralprojectsincludeinvestmentsinbatterychainmineralextractionandbeneficiationandthedevelopmentofprecursormaterialsandcomponentsBatterycellassemblyanddevelopmentDevelopmentofbatterycelltechnologyandbatterycellplantPublictransportprogrammeSupportinvestmentsinpublictransport,suchasbuses,taxis,andfleets;fundingthecharginginfrastructureandintegratedPublictransportenergystorage(includingassociatedinfrastructure);supplychaininvestmentsinthelocalassemblyNEVpublictransportpipelineTaxiprojectSupportinvestmentsinpublictransport,suchasbuses,taxis,andBusprojectfleets;fundingthecharginginfrastructureandenergystorageGauteng(includingassociatedinfrastructure);supplychaininvestmentsinAssociatedinfrastructurethelocalassemblyTechnicalassistanceNEVprojectsforminibustaxis(MBT)andbuses,includingpilotingandassemblyofvehiclesEVtaxiproject(includingvehiclesandchargingfacilities)EVbusprojectinCapeTownEVbusprojectwithtwocitiesinGauteng,fundedbyDBSAEnablingandauxiliarydistributioninfrastructureinvestmentrequiredtosupporttheroll-outofadoptionprojectsEVbusprojectwithtwocitiesinGauteng,fundedbyGEF/DBSA(technicalassistance)152JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesEstimatedtotal202320242025202620272027/8investmentZAR‘millionJETIPJETImP2653826538APDPNEVincentiveunderdevelopment851950005000505019670Variousprojectsfrompre-feasibilitytobankable40004000Batteryvaluechaininitiativesunderdevelopment(seedfunding)610010463-1017166923362837260561006976-678111215581891173637504163-235597968124611173300120480720960102048537897979797978331820151189471191942492231980396396396396396JETImplementationPlan2023–2027153ProgrammesDescriptionMobilityemissionsprogramme/fundDecarbonisingtheNEVmarketsegmentsforgoodsandservices,logistics,privatetransport,andgovernmentfleets;charginginfrastructure;andenergystorage(includingassociatedinfrastructure)MobilityemissionsabatementDecarbonisingtheNEVmarketsegmentsforgoodsandservices,requirementlogistics,privatetransport,andgovernmentfleets;charginginfrastructure;andenergystorage(includingassociatedinfrastructure)NEVadoptionandlocalisationprojects/NEVpilotsacrossthelastmiledelivery,logisticsandotherpipelineapplicationsincorporatingcharginginfrastructureandassemblyandmanufacturingofvehiclesandbatteriesIDCe-mobilitystudyIDCstudyone-mobilityincludingpre-feasibilitystudiesfore-mobilityopportunitiese-trucksLocalcompanyassemblinge-trucksandsupplyingchargers;plottingwithtwocorporatecompaniesCorporatechargingservicesBusinessprovidingchargingnetworkforcorporateclients;pilotingwithtwocorporatesDeliveryvansDeliveryandchargerserviceprovidertologisticscompaniesforretailandcourierdeliveryservicesDeliverycargovansDeliverycargovanserviceproviderforretailanddeliveryservicesDeliverybikesproject1e-bikedeliveryservicewithbatteryswoptechnologyDeliverybikesproject2e-bikedeliveryservicewithbatteryswoptechnologyDeliverye-bicyclese-bicycledeliveryservicecompanybasedinCapeTownandGautengGameEVsManufacturerofelectricgamedrivevehiclese-miningvehiclesCompaniesthatmanufactureelectricdrivetrainvehiclesforminingapplicationsEVbakkiesLocalmanufacturerandassemblerofICEVandNEVLCV(bakkies)SOEfleetelectrificationSOEplanstorunpilotstotransitionminibus,panelvans,etc.andinstallinfrastructure154JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesEstimatedtotal202320242025202620272027/8investment1266572896ZAR‘millionJETIPJETImP680059441650156268003902272777314530103397429992725502123928117627750502005050505010010025253853296113469826991001601286405510039569618814243030902702007054542626JETImplementationPlan2023–2027155ProgrammesDescriptionInfrastructureproject1Chargingandenablinginfrastructureinvestmentrequiredtosupporttheroll-outofadoptionprojectsInfrastructureproject2Charginginfrastructure(includingsoftinfrastructure)fore-mobilityapplicationsPublicNMTinfrastructureProjectstolinktownshipstourbancentresthroughNMTroadsandlanes;createenablingenvironmentformobilityservicesAssociatedinfrastructureEnablingandauxiliarydistributioninfrastructureinvestmentrequiredtosupporttheroll-outofadoptionprojectsEarlyadoptionandinnovationSupportinginvestmentsinearlyadoptionprojectsforNEVandthedevelopmentofalocalsupplychainandinnovationecosystem–thesupportwillalsoincludethesharingofintellectualproperty,patents,andtechnologypartnershipsbetweenIPGandSouthAfricaninstitutions,innovators,andentrepreneurs;charginginfrastructureandenergystorage(includingassociatedinfrastructure)InnovationfundUyiloKickStartFundFeasibilitystudyValuechainstudytoinvestigatethelow-carbonmanufacturingofNEVsforelectro-mobility,logistics,publictransportapplicationsandpre-feasibilitystudiesonlocalisationopportunitiesFeasibilitystudytoinvestigatethelocalisationofbatterymanufacturinginSouthAfricaforvariousmarketsProgrammesupportSectorresearchandplanningtoaccuratelyassessintegrationandinterdependencies;marketopportunitiesandtiming;detailedsocio-economicandtechno-economicstudiestosupportinvestmentplanning,JTplanning,reskillingprogrammes;andR&DsupportTotalfundingrequiredTotalfundingrequired(excl.ind.dev.andsupplychain)156JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesEstimatedtotal202320242025202620272027/8investmentZAR‘million110150-4135JETIPJETImP10421111060786011760155641316545162152180035760603603006060606060307750501600500100100100100100577407161613324132821427415528152081640822832240323244874166JETImplementationPlan2023–2027157AnnexureC:ProgrammeOverviewPublicTransport(busesandtaxis)Thepublictransportsectorisanareawhereboththenational,localgovernment,cities,andtheprivatesectorcanadvanceprocurementofelectricbusesandminibustaxis(MBT).Thisalsoincludestheprivatefleetsprovidingpassengerservicestolocalgovernment(forexample,GoldenArrowandPutco);andMBTsthatarealargecomponentofthetransportsectorandthelargestprivatetransportsectorinSouthAfrica,servingmainlylower-incomehouseholds.44Government,throughtheDoT,hasalreadystartedlookingatthedecarbonisationofpublictransportthroughtheGreenTransportStrategyandcurrentlyhastwoincentiveprogrammesrunningtosupportbothbusesandtaxis,PublicTransportNetworkGrant(PTNG),andTaxiRecapitalisationProgramme.45Infrastructuresupportwillbecriticalandsupportwillberequiredfrommultiplestakeholders,suchasmunicipalities,cities,Eskomtoeffectgridupgradestosupportchanginginfrastructure,andTransnettosupportenhancementofrailoperationsandtransitiontolower-carbonlocomotives.ThepublictransportprogrammeforJETImplementationPlanrequirestrusteddomesticinstitutionsthathavethecapabilitytoleveragefundingfrompartnercountries,andtoadministerandimplementtheprogramme.TheDBSAhaspartneredwiththeGlobalEnvironmentFacility(GEF)tosupportdevelopingcountriestotransitiontoelectricmobility.TheWorldBank(WB)servesasthetrusteeforGEF,andDBSAhasbeenanaccreditednationalagentsince2014.TheDBSAprogrammeundertheauspiceof‘AcceleratingtheshifttowardelectricmobilityinSouthAfrica’,aimstomovetowardsalow-carbontransportsectoranddemonstratetheviabilityofdeployingelectricbusesinvariouscitiesthathaveexpressedinterest.Theprogrammehasreceivedinterestfromthreecities,namelyCityofJohannesburg,CityofTshwane,andtheeThekwiniMunicipality.Theinitialpilotswillseektodeploy50EVbusesoverthenextfiveyears,withtheprojectcommencingin2024.44JETIP,2023–2027.45Authorsnotes,discussionswithDoT.158JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesFigure14:Componentsofup-scalinge-mobilityinSA’spublictransportsectorProjectcomponentsDemonstratingandup-scalingelectricmobilityinthepublictransportsectorinSouthAfricaInstitutionalcapacityDeploymentandPolicyenhancementandScalingupofbusfleetbuildingdemonstrationofelectricpilotreplicationIncreaseoffleetsizeTosupportthebusesForanintegratedandimplementationofsustainablemass-transitalarge-scalepublicComprehensivefeasibilitytransportsolutionforSouthtransportsectorstudiesanddemonstrationAfricancities(knowledgehubinco-operationwithDSI,ofelectricbusesuYiloandSANEDI)TechnicalAssistanceTechnicalAssistanceTechnicalAssistanceInvestmentplusInvestmentGEFCo-GEFCo-GEFCo-GEFCo-financingfinancingfinancingfinancingSource:DBSA.TheSouthAfricanNationalEnergyDevelopmentUnit(SANEDI)istheapprovedimplementationpartner,theexecutingentity,andprojectmanager,andDBSAistheimplementingagency.Theprogrammeconsistsoffourkeyareas:1.Policydevelopment2.PilotdevelopmentCh7FigAnnexure3.Capacitybuilding4.Scaleupofe-busesTheDBSAprogrammeallowsforotherfunderstoparticipateintheprogramme,therebyaligningwiththeJETImplementationPlantoattractfundsfrompartnercountries.Theprogrammesupportsstrategiesatacityleveltoreducecarbonemissionsandimproveairquality.Itdemonstrateselectrictransportworkingincities,thusallowingcitiestolearnanddevelopcapacity.Thiscreatesanenablingenvironmentwhichallowsforpolicydevelopmentarounde-bustechnologyandknowledgehubsforcitiestoshareexperiencesandlearnings.TheprogrammewillalsoallowcitiesandbusoperativesaccesstograntandconcessionalJETImplementationPlan2023–2027159fundingwhichwillreducethecostoffundingandmatchthetenorofservicecontracts.Citieswillbenefitfromoperatinglower-costfleetsandreducedmaintenancewhileprovidingsustainableandloweroperatingcosttransportationservicestothepublic.PublicTransportProjectsOthernotableprojectsthatmakeupthebalanceofthepublictransportprogrammeistheGoldenArrowBusService(GABS)electricbusprojectsandtheFlexEVelectrictaxiproject.BothprojectsarebasedinCapeTownandwillcontributetotheCityofCapeTown’sstrategyfortheelectrificationoftransport.GABS(establishedin1861)isthemajorpublictransportbusserviceoperatorinCapeTown,withacurrentbusfleetof1100busesandatotalof2500employees.GABStransportasizeablenumberofcommutersdailyandisanestablishedmarketplayerinthepublictransportindustryinCapeTown.In2021,GABSwasthefirstcommuterbusoperatortopilotandfieldtesttheuseofelectricbuses.46Thepilot,usingtwobusesbuiltbyBusmarkwhichusedBYDcomponents,demonstratedthebusinesscaseforusinge-buses.GABSiscurrentlytestinga65-seaterBYDbusandhasbeenmandatedbytheirboardtocommencefleetreplacementof60e-busesperannum.GABSislookingtoassemblethesebuseslocallywithanOEM.Theprojectwillalsorequiretheinstallationofchargingandrenewablesolarinfrastructure(<100MW).Byreplacingits1100-busfleet,GABSwillreducecarbonemissionsby67kilotonnesofCO2peryear.47FlexEVisastart-upcompanyfocusingontheelectrificationofthetaxisector.ThecompanyplanstorollouttwopilotprojectsinStellenboschandCenturyCityinCapeTownandlaunchapproximately80e-MBTsandtwochargingfacilitiesoverthenexttwoyears.Thereafter,itplanstorolloutregionalprojectsinGauteng,EasternCape,andDurbanoverthenextfiveyears,buildingafleetofcloseto1500e-MBToverthisperiod.TheprojectalsoplanstolocallyassembleMBToncethevolumesandthebusinesscasecanbeproven.Itisestimatedthatthetaxiindustryemitscloseto34milliontonnesofCO2perannumand,therefore,itiscriticalfortheJETIPthatthetaxisectorhasthetechnologyandsupporttodecarbonise.The46GreenCape.(2023).Electrificationofpublictransport.47GreenCape.(2023).Electrificationofpublictransport.TheCO2emissionfactorusedwas2692kgperlitreofdieselfuelconsumed(DEA,2017,ascitedinKorneliusetal.,2022).160JETImplementationPlan2023–2027Chapter7:NewEnergyVehicleschargingfacilitieswillincluderenewablesolarandenergystorageandfacilitatetheupgradingofthesurroundinggridinfrastructure.TheestimatedinvestmentrequiredforthepublictransportprogrammeisapproximatelyZAR10.46billionoverthenextfivetosixyears.TheamountisgreaterthanthebudgetintheJETIPduetotheadditionalDBSAprogrammeandimproveddatafromtheotherprojects.GrantfundingrequiredisestimatedatZAR1.6billionwiththebalanceofequity,privatecapital,concessional,orcommercialfunding.A20%bufferhasbeenconsideredforadditionalrelatedcharginginfrastructureinvestments,suchasgridupgrades.Theinvestmentrequiredhasbeensetat50%abovetheprojectpipeline,toallowforotherprojectsnotyetidentifiedtobefundedthroughtheJETImplementationProgramme.MobilityEmissionsProgrammeMobilityemissionsabatementreferstoNEVsegmentsthatcaterforB2BandB2Gsectorsoftheeconomy.Overthepastfewyears,thegrowthine-commerceanddeliveryserviceshasseensignificantgrowthinvehiclesontheroadstomeetconsumerdemands.Thesevehiclesrangefromscooters/motorcyclestolighterdeliveryvehicles,tothree-wheelcargocarriers.Thelogisticssectorisalsofacingpressuretodecarbonisesupplychainsthatservicemajorlocalandglobalcompaniesandcoversvariouscategoriesortransporttypologies,suchasprimary(bulkgoods),corridor(nationalroads),ruralandmetropolitan.48TheinefficienciesinSouthAfrica’srailinfrastructureshavemeantthatmoregoodsaretransportedbyroadthaneverbefore.IntermsofCO2emissions,metropolitanfreightcontributescloseto50%ofalllogisticsemissions,followedbyruralandroadcorridorfreight.AllthesetypologieswillrequiredifferentsolutionsandtechnologyofferswhentransitioningtoNEVmobilityandwillhaveanimpactonemissionsreductionovertheshort-tomedium-term.ThelightdeliveryvehicleparcinSouthAfricaisestimatedat2673783vehiclesin2021,withheavydeliveryvehiclesestimatesat388383.49StudiesundertakenbyGreenCapeandBloombergNEF50showthatthelogisticssegmentislikelytotransitionfasterduetotheTCOsavings,whichreducesthedilemmaofthehighpurchasepriceofNEVsfacedbypassengercarbuyers.TCOlooksatthepurchasepriceplustherunning/maintenancecostofthevehiclesandtherevenue/incomeearnedbythevehicle.Thismakesthemobilityabatementattractiveforfunders,asROIcanbecalculated.Companies,suchasUberandWoolworths,havecommittedtodecarbonisingtheirdelivery,withWoolworthspartnering48WWF.(2016).GreenhouseGasEmissionsfromPassengerTransportinGauteng:anInvestigationperIncomeGroup.49GreenCape.(2023).SustainableMobilityMarketAnalysisandOpportunityReport.50GreenCape.(2023).SustainableMobilityMarketAnalysisandOpportunityReport;BNEFGlobalEVOutlook,2023.JETImplementationPlan2023–2027161withlocalcompanyEverlectrictosupplyLDVsforitsDashservice51andUbercommittingZAR200milliontosupportbusinessesinGautengusinge-mobilitysolutionsonitsplatform.52Thefundingapproachformobilityandlogisticsleanstowardsaphased‘learningaswedo’pathway,whichallowsforinvestmenttobede-riskedandtheimpactofNEVonelectricityinfrastructuretobephasedinovertime.Projectstypicallystartwithaproofofconcept(POC)stageandthengraduatetoapilot,demonstration,andcommercialstageasbusinessesincreasetheirfleetvolumes,buildinginfrastructurenetworksanddiversifyingbusiness/productofferings.Scaleeconomiescanbeachievedduringthedemonstrationorcommercialstageswhereconsiderationforlocalisationofvehicles,chargers,batteries,andinfrastructurecanbemadebasedoneconomicallyviablebusinesscase.Thisiswherethepowerofmobilityadoptionleadstothecreationoffactoryjobsandwidersocialeconomicimpacts.TheMobilityEmissionsProgramme/FundwillbehousedatadomesticDFI,suchastheIDC,andwillsupportfundingforthefollowingareas:„NEVlocalisationprojects„Earlyadoptionandproofofconceptpilots„Infrastructuresupport„Policyandresearchdevelopment„Innovationandcapacitydevelopment.Theprogrammewillfundprojectswithafocusontwo-andthree-wheeledvehicles,lightdeliveryvehicles(excludingpassengervehicles),mediumandheavycommercialvehicles,miningandagriculturevehicles,andindustrialvehicles.TheprojectpipelinefortheprogrammeisapproximatelyZAR3billion,whichincludesprojectsandbusinessesatvariouslevelsofmaturitywithconsiderationforadditionalinfrastructureat20%oftheprojectpipeline.ThetotalprogrammefundingisZAR5.88billion.Currently,theIDCisundertakingane-mobilitylocalisationstudywhichcommencedinSeptember2023.Thisstudywillincludepre-feasibilityundertakingsonanyviableopportunitiestoassembleNEVsinthenon-passengervehiclessegmentsinSouthAfrica.51(https://businesstech.co.za/news/motoring/593952/woolies-to-ramp-up-rollout-of-electric-delivery-vehicles/).52(https://www.dailymaverick.co.za/article/2023-08-10-uber-eats-invests-r200m-to-create-economic-opportunities-for-youth-in-township-economies/).162JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesMobilityProjectsTheprojectpipelineconsistsofafewnotablebusinessesthatprovidemobilitysolutionstovariousdemand-sidepathwaysseekingtodecarbonise:„GreenRidersisaturnkeyGreen,e-mobilitysolutiondedicatedtocreatingasignificantsocialimpactwhilebuildingaprofitablecompany.Thecompanycurrentlyoperatesafleetof100e-bikesandplanstoexpandto600bikesby2024.Thereafter,theyaimtoachievecloseto16000ridersandcreatesustainablejobsforSouthAfricansoverthenextfiveyears,whilealsoreducingthesector’scarbonfootprint,tomaketheplanetabetterplaceforall.GreenRidersintendtorecruit,train,andskillthousandsofpeopleandplacethemoncustom-designede-bikeswhicharepurpose-builtinCapeTownforharshAfricanterrain.TheGreenRidersprojecthasresultedinriderincomedoublingduetothelowertotalcostofownership.„ValternativeisaDurban-basedcompanywhichintendstoroll-oute-bikesandbatteryswopstationstoservicefooddeliveryandcourierclientsusingtheUberplatform.ThecompanywillundertakeaPOC/pilotprojectin2023and,thereafter,intendsexpandingitsfleetto>200e-bikeswiththegoalofreaching3000bikesby2028.BoththesebusinessesprovideservicesandaresupportedbyUberSouthAfricawhichhasatargetofnetzeroby2040.„MellowVans,athree-wheelcargovehiclemanufacturingcompanybasedinStellenbosch,wasoneofthefirste-mobilitycompaniesinSouthAfricaandcurrentlysuppliesseveralretail,delivery,ande-commercebusinesses.Theycurrentlyassemblelocallywithupto70%localcontentandarelookingtoexporttheirproducttooverseasmarkets.„Otherprojectsincludethelocalmanufacturingofe-gamedrivevehiclesfortheeco-tourismsector.Logisticsprojects,includingthelocalassemblyofelectrictrucksandthepilotingofDCchargingstationswithcorporatesforfleetintegration.Eskomisundertakingane-mobilityprojecttotransitiontheirfleet,wherebytheywillprocureabout15vehiclesforfivesites,includingcharginginfrastructureandinfrastructureupgrading.ThiswillcontributetowardstheirJETcommitments.Charginginfrastructureprojectsincludetherollingoutofcharginginfrastructureforcorporatesoverthenexttwoyears.Miningequipmentsuppliesofscoopers,loaders,andhaulershavebeenprovidingbatteryelectricvehiclestominingcompaniesandlookingtoexpandlocalproductionofthesevehicles.„Publicenablingprojectsincludetheupgradingofpublicroadsforexclusiveusebynon-motorisedtransport(NMT)vehiclesandcreatingsafepassageforpeopleinurbanandinformalareasclosetomajorurbanhubs.Thesafepassageinitiativeallowsforprivateandpublicpartnershipstoaddresstheinterconnectedcrisiswithinurbansprawls.Itcreatesanenablingspaceforservicesrelatedtoe-mobilitytobeoffered,thusmakingtaxis,e-hailing,micro-mobility,andtransformedlandusetorapidlyreduceGHGemissionsrelatedtotransportchannels.ThepilotprojectissettolaunchfromLangatothecentralbusinessdistrict(CBD)inCapeTown,withotherprojectsplannedforTshwane,Soweto,Sandton,andJohannesburgoverthenextfiveyears.JETImplementationPlan2023–2027163InnovationandTechnicalAssistanceProgrammeTheinnovationandtechnicalassistanceprogrammecanbelinkedto,orincorporatedin,theprogrammesforpublictransportandmobilityabatement.TheDBSAprogrammeprovidesforZAR2billiontechnicalassistance.TheDSI‘suYiloprogrammeisane-mobilityprogrammewhichsupportstechnologydevelopmentandpilotprojectsforNEVsandhasassistedseveralofthecompanies,suchasGreenRiders,MellowVans,MMC,andsoon.TheuYiloKickStartFundisanidealvehicletochannelfundingfrompartnercountriestosupporttheinnovationandtechnicalassistancerequirementforJET.Inaddition,thefundcansupportsharedtechnicalservices,suchastestingandhomologationstationsforNEVsandskillstrainingprogrammes.AutomotiveValueChainTheImplementationPlanisinlinewiththeNEVroadmapoftheDTICpublishedin2021,whichincludesthefollowingphases:„Phase1:FocusontheassemblyofNEVsprimarilyforexport,whilepreparingforlocalsales,andfinalisetheNEVcomponentsforlocalmanufactureandpilotprojects.„Phase2:GrowthedomesticconsumptionmarketbyexpandingthelocalNEVcomponentmanufacturingsector.Thiswillhelpfacilitatetheshifttofullelectrification.„Phase3:FocusprimarilyonthedomesticmarketforNEVs,especiallyBEVsandfuelcelltechnologies.TheJETIPisalignedwithDTIC’sNEVroadmapandprovidesaholisticsupportpackagefortheindustry(mainstreamandinfant).ThephasedapproachbygovernmentwillcreateanenablingenvironmentforNEVproductionandaddressresourcemobilisation,focusingonat-riskexports.Thecurrentpolicytool(APDP2)forNEVsisunderdevelopmentbytheDTICandNT,subjecttobudgetaryconstraintsandadditionalproposedtaxincentives.ThenewpolicyincentiveswillhopefullyallowcurrentandnewOEMstodemonstratethebusinesscaseforattractingNEVproductionvolumestoSouthAfricaandreducethecostofimportedNEVstostimulatelocaldemandandlowerretailprices.Toacceleratethisplanandfast-trackdeploymentoflocallyproducedNEVsintheSouthAfricanmarket,thecountryneedsadditionalsupport.Theautomotivesupplychaininitiativescoverseveralareasandissupportedbyavarietyofmechanisms,includinggrantincentivedevelopmentandcommercialfinanceandprivatecapital.Theautomotivesectorhasseveralsupportingmechanisms,suchastheAPDP2andAutomotiveIndustryTransformationFund(AITF).However,asdemonstratedintheJETIP,therequirementfortransitioningissignificantlyhigherandmorefundingsupportisrequired.164JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesTheJETIPproposedfundingsupportofZAR70billionforend-userincentives(insubsequentphasesofimplementation)andprioritisationofaboutZAR41billionformanufacturingsupportfortheautomotiveandbatterymineralsvaluechain.ManufacturingSupplyChainSeveralOEMsarealreadyproducinghybridelectricvehiclesinSouthAfricaforthedomesticandexportmarket,suchasToyota,MercedesBenzSA,andBMW.Recentannouncements,includingfromBMWSouthAfrica,indicatethattheywillinvestclosetoZAR4.5billiontomanufacturethenewX3plug-inhybridsinSouthAfrica.StellantishasalsoannounceditsintentiontosetupamanufacturingfacilityinSouthAfricaandhavesignedamemorandumofunderstanding(MOU)withtheDTICandIDCtoundertakeaprojectworthZAR3billion.TheSouthAfricancomponentindustryalsorecentlyannouncedinvestmentsworthZAR4.85billiontosupportcurrentproduction.ManyOEMs,suchasBMW,GWM,BYD,andToyotaalreadyhaveNEVofferingsfordomesticconsumers,andwithinthenexttwotothreeyears,itisestimatedthatNEVswillreachpriceparityorganicallywithICEinSouthAfrica.TheIDCwillseektoinvestclosetoZAR5billionoverthenextfiveyearsinvehicleassemblyandcomponentsuppliers.BatteryValueChainThepipelineforbatterymetalandmineralsexceedsZAR19billiontotalprojectcosts,andtheseprojectsaremainlyfromtheIDCprojectdevelopmentpipeline.Projectsareatvariousstages,fromscopingtopre-implementation,andfocusonbatteryminerals,suchasnickel,manganese,cobalt,graphite,lithium,rareearths,andothercriticalminerals,suchascopperandvanadium.TheIDCwillalsopartnerwithaglobalbatterycellOEMtoundertakeascopingstudyforthelocalisationofcellmanufacturinginSouthAfrica.AprojectcostofZAR50millionhasbeenbudgetedforthisstudy.Theimportanceofthebatteryvaluechainandmanufacturingcapabilityforbatterycellmanufacturingcannotbeoverstatedenough.Thebatterymakesupmorethan50%ofthecostofNEVsandvalueadditionfromaproductionperspective.Theimplicationsfornotlocalisingthebatteryvaluechainwillmeanthatlocalcontentof65%by2035willnotbeachieved,andtheimportationofbatteriesbyOEMsmayimpacttherulesoforiginwiththeEU,whichrequireslocalcontentofupto60%toexportvehiclestotheEUdutyfree.Overall,theImplementationPlanallocatesapproximatelyZAR4billiontowardsbatterycellmanufacturingdevelopmentandcapacitybuilding.JETImplementationPlan2023–2027165Thestrongpipelineofprojectsisatestamenttothecountry’sabilityandpotentialforestablishingabatterysupplychainfortheworld,asanalternatesourcingdestinationforbatterymanufacturinginputs,suchasprecursors,foils,contactors,andsoon.Manycountries,suchastheEUandUSA,arefacedwithaeitherasinglesourcechallengeforbatterymaterialsorwillnotmeetnationaltargets.53Thisprovidesanopportunityforbatterycellmanufacturerstostartestablishingasupplybaseforbatterycellmanufacturing.SouthAfricahasexistinglegislation,especiallytheMineralandPetroleumResourcesDevelopmentAct(MPRDA),theRoyaltiesAct,andtheIncomeTaxAct(ITA),allofwhichcreatetheframeworkforasystemofincentives,levies,andrebatesthatcanactasa‘CriticalMinerals/MetalTRIMS’,likeAPDP.Today,mining,automotive,andthetransportindustryarejoinedatthehipduetotheelectrificationoftransportandtheneedtodecarboniseit.Apropagativeopportunity,linkingtwoindustries,willbepivotalandthesupportofJETfundsandpartnercountriesisvital.EvidenceofprogresswillincludethecurrentflourishingSouthAfricanbatteryassemblysegmentforenergystorageandtelecomsworkingwithcompanies,suchasPolariumandBlueNova.Thus,theskillsbaseforbatteryassemblyexistsandwillgrow.53TheUSA,undertheIRAandCriticalMineralsAct,isforecasttohavedifficultyachievingits100%localcontentrequirementsforbatteriesby2029.CurrentlytheUSAsourcesmorethan46%–77%ofbatterymineralsfromnon-FTTAcountries(S&PGlobalMarketIntelligenceInflationReductionAct:ImpactonNorthAmericametalsandmineralsmarket:FinalReport,August2023).166JETImplementationPlan2023–2027Chapter7:NewEnergyVehiclesJETImplementationPlan2023–2027167168JETImplementationPlan2023–2027Chapter8:GREENHYDROGEN169PURPOSEThepurposeofthischapteroftheJETImplementationPlanisto:„articulatekeyactionstodrivetheimplementationofSouthAfrica’sGreenHydrogen(GH2)55andGH2-derivativeindustryandsupportmanufacturing(forexample,fuelcellsandelectrolysers)fortheinitialfive-yearperiod(2023–2027)„assignownersandtargetstotheseactionstoensuresustainablegrowthwithinSouthAfrica’sGH2industry„buildonexistingbodiesofworkandthelatestfeedbackfromprojectdevelopersandfundingpartnerstodevelopawell-definedandtechnicallyfeasibleImplementationPlan.55AllreferencestoGH2forpurposesofscopeofapplicability,extendtoPower-to-X(PtX)andX-to-Power(XtP)technologiesandprojects:Power-to-X(PtX):Conversionofrenewableelectricity(Power)intoGH2-basedproducts(X).ThisincludestechnologiesandprojectsforproductssuchasGH2itself,Greenammonia(NH3),e-methanol,SustainableAviationFuel(SAF)amongstotherGreenchemicalsandfuels,andbeneficiatedheavymanufacturingproducts,suchasGreensteel.Italsoincludessustainablecarbonsourcingtechnologiesandprojects.X-to-Power(XtP):ConversionofPtXproductsintoelectricityfromhydrogenusedaslong-termstoragetoprovideseasonalbalancingforthepowersystem(bothintheformoffuelcelltechnologyorasdirectcombustioningasturbines).170JETImplementationPlan2023–2027Chapter8:GreenHydrogen8.1StakeholderConcernsDuringthestakeholderengagementsconductedbythePresidentialClimateCommission(PCC)inearly2023,GH2concernswerehighlightedacrossfivecorethemes.Table24outlineshowtheseissuesareaddressedintheGH2implementationplan.Table24:StakeholderconcernsandhowtheyareaddressedThemeConcernsraisedHowconcernsareaddressed1.EnergyGH2shouldnotcompeteREdedicatedtotheproductionofGH2mustpassthetestofsecuritywithSouthAfrica’s‘additionality’fortheGH2beingproducedtobeconsideredenergycrisiscertifiably‘Green’-thisisasafeguardtoensurethatGH22.FundingproductiondoesnotcompeteforREandconflictwithenergyEradicatingenergysecurityobjectivespovertyisamorepressingpriorityGH2canbeakeyleverinaddressingtheenergycrisis-typically,REcapacityisdeliberately‘overbuilt’(2–3Xelectrolysercapacity)tomaximiseGH2productionefficiencywhichallowsthe~20%–40%surplusenergyfromGH2plantstobefedintothegridSubstantialscalingofGH2projectsisanticipatedpost-2028,whichisdisconnectedfromthetimehorizontosolvetheshort-termenergycrisisSouthAfricacurrentlyfaces(e.g.NECOMinitiativesaimedataddressingtheenergycrisistargetedforcompletionbefore2028)GH2projectscanserveasanchordemand,rationalisingcriticalsharedinfrastructureprojects(forexample,gridexpansion),especiallyinremoteregionswithlimitedindustrialactivity,andfurtherincreasedemandforskillsandlocallymanufacturedgoodsthatareintegraltootherJETIPpriorities(e.g.REvaluechain)GH2shouldnotdirectGrantfundingwillbesourcedfromglobalfundsthathavecriticalgrantfundingringfencedgrantsandconcessionalcontributionsforsupportingawayfromtheenergyGH2initiatives-ifSouthAfricadoesnotpursuethesegrants,crisisandotherpressingtheywillbeallocatedtoothercompetingGH2producingissuescountriesExistingfundsdedicatedtoGH2supportaspartoftheJETIPhavebeensourcedfromdevelopmentfinanceinstitutionswithadedicatedmandateforGH2supportTheGH2implementationplandoesnotseektoobtaingrantsearmarkedforotherJETsectorsorprioritiesJETImplementationPlan2023–2027171ThemeConcernsraisedHowconcernsareaddressed3.WorkforceInsufficientlocalSouthAfrica’shighunemploymentrateimpliesthattrainingupskillsworkforceskillstodeliveraworkforcecapableofdeliveringSouthAfrica’sGH2ambitionthepipelineofprojectsrepresentsasignificantopportunityInvestmentsmustbemadetobuildtheskillsneededtorealisethisopportunityandthiswillrequireanationallyco-ordinatedeffortTheGH2economycanserveasanchordemandfortheseskilledworkersandhelpbridgetheunemploymentgapGH2willprimarilyrequireskillsandjobsintheREvaluechain,alignedwithotherpriorityareasintheJETIP,whichcanhelp,intheearlyyears,todrivefocusonwhatskillsdevelopmentisrequired-however,skillstoanchorlocalmanufacturingofcomponentsintheGH2valuechainmustalsobedevelopedinparallel,atadifferentpaceandscale4.ExecutionInsufficientdetailsontheThisImplementationPlanoutlinesactions,milestones,andplanJETIP’sexecutionplanownerstodelivertheJETIP5.TransparencyTransparencyonAGH2implementationdashboardwillbedevelopedandmadeprogressandfunduseispublicaspartoftheJETImplementationPlanrequired8.2Context8.2.1SouthAfrica’sGH2OpportunitySouthAfricahasmultiplestructuralandstrategicadvantagesthatunderpinits‘righttowin’intheglobalGH2market:„World-classRenewableEnergy(RE)resourceswithgloballycompetitiveloadfactors,putSouthAfricaonparwithemergingleaderssuchasChile,Namibia,Australia,SaudiArabia,andMorocco.„Amplelandisavailablefordevelopment,unlikemoredevelopedeconomieslikeGermany.SouthAfrica’sRenewableEnergyDevelopmentZones(REDZ)canaloneaccommodateupto370GWand550GWofworld-classwindandsolarphotovoltaics(PV)56respectively,enablingthelarge-scaleproductionofGH2atgloballycompetitiveprices.„SignificantPlatinumGroupMetals(PGM)reservesexistthatcanbeasourceofcompetitiveadvantageinthelocalisationofthemanufacturingofkeytechnologies,suchasfuelcells56NBI.(2021).DecarbonisingSouthAfrica’sPowerSystem.172JETImplementationPlan2023–2027Chapter8:GreenHydrogenandelectrolysers.Itmustbenoted,however,thatthisspecifictechnologyspaceisnascentandother(non-PGMbased)technologiesarebeingexplored.SouthAfricamustobjectivelymonitorthesekeytechnologysignpostsinitsdrivetowardslocalisationtoavoidanchoringonanon-competitivetechnology.„Downstreambeneficiationtechnology,capabilities,andexistingassetbase(includingFischer-TropschandDirectReducedIron(DRI))canenabletheproductionofhigh-valueGreenproducts,suchasSustainableAviationFuel(SAF)Greenbunkerfuels,Greenmethanol,andGreensteel.„Stronggeo-politicalandtraderelationshipswithleadingGH2markets,suchastheEuropeanUnion(EU),UnitedKingdom(UK),Japan,andSouthKoreamayallowSouthAfricatoaccessandcollaborateonthedevelopmentofkeytechnologies,suchasfuelcellsandelectrolysers,andbeabletocompetitivelyplacefinalGH2-basedproductsinthesemarkets.„GloballyadvancedJustEnergyTransitionPartnership(JETP)constructshavedemonstratedpioneeringJETpartnershipswithdevelopedcountries,andSouthAfricaiswell-positionedtoleverageexistingJETIPmechanismsforfosteringco-ordinatedeffortsandcollaborationinmutuallybeneficialtrade,finance,anddecarbonisationagreementsthatformthefoundationofaJustTransition.Byleveragingthesestructuraladvantages,SouthAfricacandevelopacompetitiveGH2ecosystemintheregionthatcanhelppreserveandgrowaresilientindustrialbase.Inthe‘demanduplift’scenario,SouthAfricacouldproduce~7mtpaofGH2-basedproductsforbothlocalandexportmarkets,57asshowninFigure15.Ifrealised,thiscouldincreasethegrossdomesticproduct(GDP)byupto~5.9%(real)or~ZAR500billion58by2050.Moreover,SouthAfrica’sgloballycompetitiveGH2productionenablescost-effectivedecarbonisationofexistingdownstreamindustries,suchassteel,cement,petrochemicals,andheavy-dutytransportbyenablinga10%–15%emissionsreductioninthesesectors.59Anaffordabledecarbonisationpathwaythathasviable‘lastmile’decarbonisationlevers(likeGH2)iscriticalforthesesectorsanddownstream-associatedindustriestoremainresilientastheworldtransitionstoalower-carboneconomy–especiallygiventhecontextofglobalregulationssuchastheEUCarbonBorderAdjustmentMechanism(CBAM),whichputs~50%ofSouthAfrica’sexportsatrisk.60Bydecarbonisingtheiroperationsearly,thesesectorscancapturea‘Greenpremium’inproductsalestodownstreamnicheindustries.Forexample,althoughtheproductioncostofGreensteelpre-2030isexpectedtobe~2Xthecurrentgreyalternative,whenusedintheproductionofanaveragelightmotorvehicleproducedintheEUitwilladd,onaverage,EUR500tothecostofa~EUR30000car.6157DTICandGreenHydrogenPanel.(2022).GreenHydrogenCommercialisationStrategy;7mtpaisGH2equivalent.58WorldBankGroup.(2022).SouthAfricaCountryClimateandDevelopmentReport.59NBI.(2022).ItallHingesonRenewables.60NBI.(2022).ItallHingesonRenewables.61WorldEconomicForumandBostonConsultingGroup(BCG).(2021).Net-ZeroChallenge:Thesupplychainopportunity.JETImplementationPlan2023–2027173Figure15:GH2applicationandforecastgrowthfortheSouthAfricanGH2productforlocalandexportconsumptionH2andderivativeApplication7.0MtpaGHproductionapplicationconfiguration77.0mtpaGHproductionIndustryAmmoniaFeedstockDEMANDEVOLUTION(mtpaGHproduction)6MethanolFeedstock5DemandproductionupliftH2Feedstock4RefineriesFuelcell,combustion,3.8mtpaGHproductionscenariodirectreductionSteelCombustion3High-temperatureFuelcellprocessHeavyroadMobilityO-highwayFuelcell2RailH2FuelcellShipping(ocean)AviationNH3MeOHCxHyFcoumelbcuesllt/ionCxHyCombustionExportPowerH2adaptedturbinesH2Fuelcell/combustion13.8mtpaGHproductionandheat270KtpaGHproductionNH3MeOHCxHyFcoumelbcuesllt/ion0Long/midstorage2020UsecasesacrossFeedstock/203020402050industry,mobilityH2NH3MeOHCxHyfuelcell/powerandheatingcombustionAlocalGH2industrycansupportthecontinuedindustrialisationofSouthAfrica.ThiscanbeachievedthroughtheGH2industryincreasingtheroll-outofREtoenableaffordable,RE-basedelectrificationacrossallsectors,drivinggrowthinnewGreencommodities,forexample,Ch8Fig13GreenH2PGMsusedinmembraneelectrodeassemblies(MEA)forfuelcellsandelectrolysers,Greenagriculturalproducts,anddownstreambeneficiationtoproduceGreenbunkerfuels,SAF,Greenmethanol,Greensteel,andGreenexplosives,asillustratedinFigure16.ThiscontinuedindustrialisationduetothegrowthoftheGH2industry,willdrivefurtherdemandandgrowthinsupportingsectors,suchastransport,throughincreasedlogisticsrequirements,railandroaddevelopment,manufacturingfornewREequipment,andconstructionthroughestablishingnewmanufacturingsites,workforcehousing,andinfrastructureexpansion–providingnumeroussmall,mediumandmicroenterprises(SMMEs)withsupplychainopportunities.Thiscantransformunderdevelopedregionsintoindustrialhubs.Forexample,theCoegaGreenAmmoniaPlantisusingexistingtrainingcentrestoskillthelocalcommunity,attractinglocalmanufacturing,amongstotherinitiativesintheCoegaIndustrialDevelopmentZone,tocreateanindustrialhubintheEasternCape,theprovincewiththehighestunemploymentinSouthAfrica.62FurtherexamplesofthisindustrialisationareprovidedinAnnexureB.62StatisticsSouthAfrica.(2023).,QuarterlyLabourForceSurvey,2022:Quarter4.174JETImplementationPlan2023–2027Chapter8:GreenHydrogenFigure16:GH2candriveindustrialisationacrossfourcoresectors(RE,mining,agriculture,andbeneficiation)andthreesupportsectors(transport,manufacturing,andconstruction)▪IncreaseavailabilityofdevelopedMining▪ExistingcommoditieswithnetzerolandforREprojectsproduction(e.g.H2poweredfurnace)Fourcore▪ExcessREexportedtogridtosectors▪ExplorationfornewGreenmineralsenableaordableelectrificationdeposits(e.g.PGM,lithium)acrosssectors▪GH2fuelforminingvehicles▪IncreasedREdemandtoaccelerateREskillsandAgriculturemanufacturingcapacityindustryRenewableenergy▪Greenbunkerfuel,SAF,Beneficiation▪GNH3forfertiliser,todevelopGreenMeOHandotherPtXproductscompetitiveforGreenproducts▪Greensteel,decarbonisedcement,▪GH2fuelforFCEVtractorsandfarmandotherheavymanufacturingproductsmachinery▪GreenexplosivesfromGreenNH3supply▪Desalinatedseawaterforselectuse-cases(e.g.hydrophonics)ThreesupportsectorsTransportManufacturingConstruction▪PipelinesrequiredforGH2derivativesand▪RE:windturbinetowers,nacelles,solar▪ConstructionofGH2,GNH3andby-productspanels,etc.REsites,andgridinfrastructure▪Roadandrailnetworksrequired▪Grid:pylons,wires,substationcomponents,▪Constructionofroads,ports,andportforlogisticsetc.facilities▪Trucking,rail,andshippingcompanies▪GH2:fuelcell,electrolyser,H2vehicles,etc.▪Constructionofdwellingsand‘newcity’forlabourforceNumerousSMMEsupplychainopportunitiesInscenarioswithGH2exportsandassociatedindustries,upto1.8million63morejobscouldbecreatedeconomy-wideby2050thaninscenarioswithoutGH2exportsanduse.ThiscomplementsandacceleratestheongoingGreenjobexpansionobjectivewithinSouthAfrica’sJET,withmanufacturingandREvaluechainstheprimaryjobdriversduetothegrowingdemandforlocallymanufacturedcomponentslikefuelcells,membranes,solarPV,andwindturbines,andCh8Fig14GreenH2isinlinewiththevisionoftheSouthAfricanRenewableEnergyMasterplan(SAREM)tounlockindustrialandinclusivedevelopment.64Thesehigh-valueindustriesarepivotalinfacilitatingaJustTransition,anchoringhigh-quality,sustainablejobs,andenhancingthevaluepropositionfornewentrantstotheeconomy,black-ownedlocalbusinesses,andthoseimpactedbythe63Presidency.(2022).SouthAfrica’sJETIPfortheinitialperiod2023–2027.64DMRE,DSI,&DTIC.(2023).SouthAfricanRenewableEnergyMasterPlan,DraftVersionforReview7July2023.JETImplementationPlan2023–2027175energytransition(forexample,individualswithinminingvaluechains).However,thispotentialremainscontingentuponwell-structuredskillsdevelopmentprogrammes.Additionally,GH2projectsserveasademandanchorforcriticalinfrastructureandinitiativesinSouthAfrica’sJETbyenhancingtheirviability(businesscase),forexample,byenablingtheexpansionofthegridtoremoteregionsoftheNorthernCapewithlimitedindustrialactivity,Boegoebaaideepwaterport,andGreenreskillinginitiatives.TheGH2industrycouldalsoenablebetterutilisationofexistinggridinfrastructurebyabsorbingexcessREduetolocalgridcapacitybeingexceededifSouthAfricaweretoadoptacurtailmentoperatingregime.65Torealisetheseopportunities,intheshortterm,localdeveloperswillhavetoadheretoexportmarkets’regulations,suchastheEU’sDelegatedAct,tosecuretheofftakeneededtoestablishtheindustry.Whilebothlocalandexportmarketsareessential,securingexportofftakeintheshorttermiscritical,asthesemarketswillbeabletomeettheaffordabilitythresholdsearlierthanthelocalmarketduetothelargeamountofGreenstimuluspackagesbeingobserved,forexample,theGreenDealintheEU.TosafeguardagainstpotentialconflictswithnationalenergysecurityandotherJETobjectives,fourguardrailsmustbeadheredtoinordertocapturethefullbenefitsofalocalGH2industry:„Localisingvaluechains,wherecompetitive,mustbenationallyprioritised,andlocalcontentrequirementsscaledatapacethatbalancesestablishingtheindustryandmaximisingsocio-economicimpact,includingthegrowthofnewblack-ownedlocalbusinesses.„Localdemandandexportmarketsmustbescaledconcurrently,albeitatadifferentpace,tosecurenewGreenvaluepoolsgloballyandenablethedecarbonisationoflocaldownstreamindustries.„LocalbeneficiationofGH2intofinalproducts,suchasGreensteelandGreenfuels,mustbeprioritisedwhereviable,tomaximisesocio-economicimpactandcontributetolong-termenergysecurity.„UnduefinancialstrainontheaverageconsumermustbeavoidedbypreventingGH2-drivencostincreasesin,forexample,electricityorsteelcosts.GH2shouldinsteadbetargetedwhereitisalreadyaffordable,andatindustrysegmentscapableofhandlingtheGreenpremiumduringtheGH2industry’searlydevelopmentstages,thatis,thefirst10–15years.65EngineeringNews.(2023).Eskommullingnewcurtailmentapproachtounlockinggridcapacityasitpursues47priorityprojects.(https://www.engineeringnews.co.za/article/eskom-mulling-new-curtailment-approach-to-unlocking-grid-capacity-as-it-pursues-47-priority-projects-2023-08-25).176JETImplementationPlan2023–2027Chapter8:GreenHydrogenAgainstthebackdropoflessthan10%(real)GDPgrowthbetween2012and2022,66whichislessthanthe15%populationincreaseoverthesameperiod,67moreofthesamewillnotbeenough.SouthAfricamustactquicklytoseizetheopportunitythatGH2represents.OthercountrieswithcompetitiveGH2prices,suchasAustraliaandChile,havealreadycompletedtheirGH2strategiesandmadesignificantprogressinestablishinganintegratedsupplybase.SouthAfricamustimplementpoliciesandregulationstosupportestablishingandgrowingthelocalGH2industry.Ifnot,itwillmissanopportunitytoobtaina~ZAR500billionor~5.9%(real)higherGDPby205068tohelpalleviateitstriplechallengeofunemployment,inequality,andpoverty.8.2.2CurrentGH2DevelopmentsinSouthAfricaSouthAfricahasmadeprogressinestablishingitsnationalGH2strategy,supportingpoliciesandregulationsinadjacentsectors(forexample,RE),securinglow-costfundingfrominternationalpartners,andestablishingtraderelationswithleadGH2marketstobegincapturingtheGH2opportunity,asseeninTable25.Table25:ProgressmadeinestablishingSouthAfrica’sGH2industryDimensionProgresstodateStrategyPresidency’sJETIPfor2023–2027(2022)DTICandGreenHydrogenPanel’sGreenHydrogenCommercialisationStrategy(GHCS)(2022)CabinetapprovaloftheCountryInvestmentStrategy(CIS)(2022)TheDSIHydrogenSocietyRoadmap(2021)PoliciesRenewableEnergyDevelopmentZones(REDZ)definedforREdeployment,creatingandpriorityareasforgridinvestmentsandacceleratedpermittingregulationsSpecialEconomicZones(SEZ)regulationstoaccelerateandincentiviselocalmanufacturingthroughreducedcorporatetax,acceleratedtaxallowanceandemploymenttaxincentives,e.g.NamakwaSEZforGH2andGNH3forcompaniesintheNorthernCapeandAtlantisSEZforREmanufacturingintheWesternCapeGenerationlicenseremovaltomovebeyondasinglebuyerelectricitymodelandenablelarge-scalewheeling66StatsSA.(2023).GDPTimeseries2022Q4.67StatsSA.(2023).Countryprojectionbypopulationgroup,sexandage(2002–2022).68WorldBankGroup.(2022).SouthAfricaCountryClimateandDevelopmentReport.JETImplementationPlan2023–2027177DimensionProgresstodateFundingKfWDevelopmentBank-IndustrialDevelopmentCorporation(IDC)Programme:EURO23milliongrantprogrammeforsupportingcatalyticprojectsinSouthAfrica’sGH2economyinthedevelopmentandconstructionphase.InternationalPartnersGroup(IPG):~USD8.5billionpledgedtotheJETIP,withaminimum~USD0.7billionproposedforGH2–inaddition,theIPGandothershavesignificantfundsavailableforprivatesectorprojectsSA-H2Fund:USD1billiontargetfundlaunchedwithaninitialEURO50millionseedfundingonbehalfoftheNetherlandsgovernmentthroughInvestInternational,inpartnershipwithIDC,DBSA,Sanlam,andClimateFundManagersPtXDevelopmentFund:EUR270millionwasestablishedbytheGermanFederalMinistryforEconomicCo-operationandDevelopment(BMZ),withSouthAfricaonthetargetcountrylistTradeGermany:SouthAfricaandGermanysignedajointdeclarationofintenttocreateaSouthrelationsAfrican-GermanGH2taskforcetoformaliseGH2bilateralagreements-thisisonthebackofGermanydoublingitsGH2targetto10GWandanewimportstrategytodiversifyimportchannelsNetherlands:Memorandumofunderstanding(MOU)betweenSouthAfricaandtheNetherlandsforco-operationinGH2,REandJETUK:MOUbetweenSouthAfricaandtheUKforco-operationinscience,technology,research,andinnovation,whichincludesthehydrogeneconomyJapan:GH2relationshipthroughgovernmentandbusinessdelegation–thisisonthebackofJapantargetingoverUSD100billionofGH2investment,andTokyocommittingtoincreaseGH2supplysixfoldto12mtpaby2040SouthKorea:SouthAfricasuccessfullyinitiatedaGH2relationshipwithSouthKoreathroughgovernmentandbusinessdelegationUnitedStates:TheU.S.TradeandDevelopmentAgency(USTDA)willtakeeligiblecandidatesfromSouthAfricatotheUnitedStatesinthefirstquarterof2024foraReverseTradeMissiontoobserveinnovativedesign,manufactureandoperationsofUSGH2technologyandservicestosupportJETIPGH2goals.SouthAfricaisdevelopingapipelineof24projectsworthmorethanZAR300billiontoestablishitsGH2industry(asseeninTable26),withsmall-scaleprojectsexpectedtocomeonlineinthenextonetotwoyearsandlargerprojectsaround2030.DetailsontheprogressoftheseprojectsareavailableinAnnexureA.AlthoughSouthAfricahasmadegoodprogressonitsstrategies,funding,traderelations,andprojects,challengesstillneedtobeovercometoestablishitsGH2industry.Theplantoaddressthesechallengesisoutlinedinthenextsection.178JETImplementationPlan2023–2027Chapter8:GreenHydrogenTable26:SouthAfrica’spipelineof24projectsunderdevelopmentforexecutionintheshort-andmedium-term,withthefirstnineprojectsgrantedStrategicIntegratedProject(SIP)statusProjectnameProjectdescriptionDevelopersCODProductionPrieskaPowerReserveGH2andammoniafromsolarandMahlakoaPhahla2026/714ktpaGH2windenergyInvestments,80ktpaGNH3UbuntuGreenCentralEnergyHydrogen:Phase1CorporationBoegoebaai(Cenec),IDCAtlanthiaGreenGH2andGNH3productionfromUbuntuGreen20267KtpaGH2/Ammonia/solarandwindenergyEnergy3.5KtpaGNH3Hydrogen:Phase1UpilangaSolarNorthernCapeGH2andNorthernCapeandGreenH2Park:ammoniaproduction,andEconomicPhase1infrastructureprogrammeDevelopmentTradeandInvestmentSasolburgPromotionAgency,HySHiFTSecundaSasolCoegaGreenGH2andGNH3productioninAtlanthiaGreen20277.3KtpaGH2/AmmoniaProject:FreeportSaldanhafromsolarHydrogen36.5KtpaGNH3Phase1andwindenergySouthAfricanHydrogenValleyGH2productionfromsolarEmvelo,Energia,19.8KtpaGH2energyinternationalProjectRhynbowtechnicalpartnersinGermany,DBSA60MWGH2productionSasolandIDCSAFproductionusingexistingENERTRAG,Sasol,Aug16.4KtpaGH2/SasolSecundaassetswithnewLinde202636.1KtpaSAFelectrolysersandREGNH3productioninCoegaHiveHydrogen2028237KtpaGNH3IndustrialDevelopmentZoneSouthAfricaSeveralGH2projectstotransformAngloAmerican,2030185KtpaGH2byregionaroundJohannesburg,DSI,Bambili2030MogalakwenaandDurbanintoaEnergy,ENGIEhydrogenvalleyHeavy-dutyhydrogenfuelAngloAmerican,2025cellvehiclecorridorbetweenBambiliEnergy,JohannesburgandDurbanEngie,Sasol,TotalEnergiesJETImplementationPlan2023–2027179ProjectnameProjectdescriptionDevelopersCODProductionSaldanhaBayGreenLarge-scaleGH2productionMainstream2027/860–80KtpaGH2HydrogenProjectwithArcelorMittalSouthAfrica’sRenewablePowerSaldanhaWorkssteelplantasananchorofftakerSaldanhaHydrogenGreenDirectReducedIron(DRI)ArcelorMittalSouth20281200KtpaDRIDirectReducedIronusingGH2AfricaEnertragGreenNH3productionfromREENERTRAGN/A30KtpaGH2/PostmasburgenergynearPostmastburg120KtpaGNH3RenewstableH2powerplants(XtP)forHDFEnergySA20251800GWhp.a.ofMpumalangabaseloadelectricitygreenelectricityEnertragIndigenZero-carbonmethanolENERTRAGN/A22KtpaGH2/productionnearGqeberha120Ktpae-MeOHIPMComponentElectrolyserandfuelcellIsondoPrecious20253MnMEAp.a.frommanufacturingcatalystsandmembraneMetals(IPM)1tonnePGM/9GWelectrodeassemblyp.a.electrolysermanufacturingequivalentIPM/NCPHydrogenRoll-outofHydrogenRefuellingIsondoPrecious20252.5KtpaGH2RefuellingStationsStationsand300fuelcelltrucksMetals(IPM)NCPdeploymentandbuses300fuelcelltrucks/busesProjectPhoenixFuelcellmanufacturingMitochondria20261000×250kWfuelecosystem(250kWsystems)EnergySystemscellsystemp.a.(250MWp.a.)CapeStackGreenH2Mobility:GH2forlonghaultransportationRRSInvestment20261600000Nm3GH2Phase1PilotGreenH2Mobility:GH2forlonghaultransportationRRSInvestment2031N7CorridorPhelanGreenGH2andGNH3productionPhelanGreen203085KtpaGH2/480.22HydrogenHydrogenKtpaGNH3OmniaSasolburgGNH3productionOmnia,WKN,202818KtpaGH2/100GreenAmmoniaWindcurrentKtpaGNH3180JETImplementationPlan2023–2027Chapter8:GreenHydrogenProjectnameProjectdescriptionDevelopersCODProductionCare-O-SeneCatalystsforSAFproductionSasolSAandGermany,UniversityofCapeTown(UCT),FraunhoferInstituteforCeramicTechnologiesandSystems(FraunhoferIKTS),HZB,INERATEC,KarlsruherInstituteofTechnologyundisclosedbytheprojectsponsor8.3PortfolioImplementation8.3.1TheoryofChangeSouthAfrica’sGH2visionistoestablishagloballycompetitiveGH2industryforlocalandinternationalconsumptiontodrivesocio-economicandeconomicdevelopmentthroughcontinuedindustrialisation.Achievingthisambitious,long-termvisionrequiresasystematicactionandmonitoringplantoensurecontinuousprogress.TheTheoryofChangewasusedtodevelopanactionableandmeasurableimplementationprogrammealongfivedimensions:„Challenges:ChallengesthatmustbeovercometoestablishacompetitiveGH2industry„Outputs:Completeddeliverablesbyinstitutionalownerstoachievethevision„Short-termoutcomes:Measurablechangesincapacityandsystemswithinonetotwoyearstoachievethevision„Medium-termoutcomes:Measurablechangesinperformancewithinthreetofiveyearstoachievevision„Impact:Socio-economic,economic,andenvironmentalimpactby2035thatmeasuresthedeliveryofthevision.JETImplementationPlan2023–20271818.3.2ChallengesSouthAfricamustovercomesevenchallengestosetupacompetitivelocalGH2industry.8.3.2.1FundingGrantfundingshortage:Amega-projecttypicallyspends~10%69ofthetotalprojectcostduringthedevelopmentphase.Thisamountsto~USD1billionfora~USD10billionmega-project.However,GH2mega-projectsfacesignificantadditionalchallengesduetotechnologyandofftakeuncertainty,unclearregulationsdefiningwhatis‘Green’inkeymarkets,andtheproject-on-projectriskforthesubstantialsupportinggridandportinfrastructurerequired.Inthishigh-riskenvironment,~80%ofprojectsgloballyaretypicallycancelledinthedevelopmentphase,atasubstantialcostofupto~USD1billion,dependingonwhereinthedevelopmentlifecycletheprojectwascancelled.Asimilarrisk-returnprofileappliestosmallerGH2projects.Thisrisk-returnpayoffforGH2projectsisinsufficientforanindividual,privateinstitutiontoinvestinGH2projectdevelopment.Grantfunding(notconcessionaldebt)orfirstlossequitywithreasonabletermsfromlocalorinternationalinstitutionsforindividualprojectstudiesisneededtoreducetheriskofearlyphasedevelopment(asseeninFigure17),aswellasnationallyco-ordinatedstudiestomakebetteruseofsharedinfrastructureandreduceproject-on-projectrisk.Thiswillallowthesignificantsocio-economicandeconomicimpactthataGH2industryenablestoberealisedinSouthAfrica.AlthoughSouthAfricahasfundsfromtheInternationalPartnersGroups(IPGs)forGH2,thisisprimarilyconcessionaldebt,andmoregrantfundingisneeded.SouthAfrica’sGH2economyneedsatleast~USD100millionofgrantfundingtocatalyseearly-stageprojectdevelopment,ofwhichithasalreadysecured~USD25million.Basedonbenchmarksseeninotherindustries,thisUSD100millionofgrantfundingwillbeabletocrowdinanadditionalUSD300–900millionprivatesectorfunding70(thatis,equity)tomeetitstotaldevelopmentfundingneeds,asthegrantfundingde-riskstheearly-stagedevelopmentstudies,andprovidesadditional,externalcredibilitytotheprojects.However,SouthAfricaneedstoactquicklytosecurethisadditionalgrantfundingfrominternationalfinanciers,asitiscompetingwithotherdevelopingnationsandGH2developers.Itisworthnotingwhendrivingengagementstosecurethe~USD100milliongrantfunding,thatthisisonly~0.03%ofSouthAfrica’scurrent~USD400billionGDP71andminorcomparedtothe~USD25billion(~ZAR500billion)72increasedGDPtheGH2industrycouldenableby2050.Requiredoutput:SourcednewgrantfundingfromdedicatedGH2globalfundstoincreasetotalgrantfundingavailableforGH2developmentstudies.69IncludingFrontEndEngineeringDesign(FEED)costs.70NBI.(2023).FinancingSouthAfrica’sJustTransition(3x–9xfundingmultiplier).71StatsSA.(2023).GrowthDomesticProduct,FourthQuarter2022.72WorldBankGroup.(2022).SouthAfricaCountryClimateandDevelopmentReport.182JETImplementationPlan2023–2027Chapter8:GreenHydrogenFigure17:Illustrativeequity,anddebtfundingsourcesthroughoutaGH2projectlifecycleIllustrativefundingneedoveramegaGreenH2projectlifecycleFIDBasicdevelopmentIdeapackagingPre-feasibilityFeasibility~USD10–200MnProjectexecution~USD5–15Bn>USD1MnUSD1–10MnUSD5–40MnExecutionDevelopmentCo-developerGrantsEquityCommercialbanksDevelopmentfinancedebtEquityDebtTypeoffunderGrantfundsGrantfundsGrantfundsGrantfundsGrantfundsEquityEquityEquityEquityEquityConcessionaldebtConcessionaldebtConcessionaldebtConcessionaldebtCommercialbanksCommercialbanksCommercialbanksCommercialbanksConcessionaldebtGrantfundingandotherconcessionalfinancewithlimitedrepaymenttermsandpartnerCommercialbanksequitycontributionsareneededtoovercometheriskintheearlydevelopmentstageswhereitisuncertainiftheprojectisviable.Concessionalfinanceneededalongsidetraditionalsourcestoimprovecompetitiveness.Ch8Fig15GreenH2Highcostofcapital:SouthAfrica’scostofcapitalcouldbe~7.4%73(USD-basis,nominal)withlow-costGreendebt.Like-for-like,thisishigherthancompetingGH2exportcountries(forexample,~5.9%ofAustralia,~7.0%ofMoroccoand~6.4%ofChile74).ThekeydriverofSouthAfrica’shighercostofcapitalisitscountryriskfactor–comprisingthelocalisationfactor(laboureffectiveness,andsoon),sovereignrisk(political,macro-economic,andsoon),andforexrisk.Therefore,despitefavourableREloadfactors,SouthAfrica’shighcostofcapitaldiminishesitsglobalcostcompetitiveness,giventhehighcapitalexpenditure(CAPEX)intensityandlimitedoperationalexpenditure(OPEX)costsofGH2projects.Toovercomethishighercostofcapital,amixofconcessionalfinancesources(includinglow-costconcessionaldebtandcreditguarantees)isneededuntildemandmarketsmatureandtechnologycostsstabilise,allowingtheindustrytobefullyfundedbycommercialsources.73Assuminga70–30debt-equitysplit,acostofequityof16%(nominal)andlow-costGreendebtof4.6%(nominal).74Assumingthesamedebt-equitysplit,costofequityandcostofdebt,withthedifferencebeingthecountryriskfactorandcorporatetaxrate.JETImplementationPlan2023–2027183Requiredoutput:Increasedavailabilityof,andaccesstolow-costfundinginstruments(forexample,concessionaldebt,Greenbonds,andcreditguarantees)andpoliciesandmeasure(forexample,ex-posttaxbreaksforcostoverrunsduringexecutionontechnologieswithhighlyuncertaincostevolutionsuchaselectrolysers,andforeignescrowaccounts)toreducetheperceivedandactualriskofinvestmentinSouthAfricanGH2projects.8.3.2.2SupplyTechnologyaccess:ToensureSouthAfrica’sGH2economyisgloballycompetitiveandcancontributetoSouthAfrica’scontinuedindustrialisation,developersmustbeabletoaccessandcollaborateonthedevelopmentandmanufacturingofkeytechnologycomponentsandservicesintheGH2valuechain.Thisiscriticaltoensurethatcertainmanufacturingprocessandserviceelementscanbecompetitivelylocalisedtoavoidfurther‘dollarisation’oftheeconomy.Thiswillrequirecollaborationbetweenleadingglobaloriginalequipmentmanufacturers(OEMs)andSouthAfricandevelopersandSMMEs,particularlyonfuelcells,electrolysers,REcomponents,75andGH2vehicles.Specifically,anenablingenvironmentmustbeinplacefortheseglobalOEMstostrikecompetitivedealswithSouthAfricandevelopersandSMMEstodothefollowing:„Secureaccesstotheproductioncapacityofkeytechnologies(forexample,fuelcellsandelectrolysers)„SecureIPsharingorco-developmentrightstokeytechnologies.Requiredoutput:Establishedgovernment-to-governmentrelationshipsandanenablingenvironmenttoattractglobaltechnologyandlocalmanufacturinginvestmentsinkeyelementsoftheGH2andsupportingvaluechainstoensurethelong-termsecurityofsupplytodriveindustrialisationoftheSouthAfricaneconomy.Projectpreparation:ThelimitedvisibilityonthestatusofGH2projectsunderdevelopmentandthelackofstandardisationoftheprojectinformationneededforeachstageofdevelopmentinhibitsprojectsfrombeingevaluatedconsistently.Forexample,thereisnostandarddefinitionofthecostingaccuracyandrequirementsforthedifferentphasesinaprojectlifecycle.ThislackofstandardisationincreasestheriskoftheGH2projectpipeline,limitingthefundingthatcanbeattracted.Thesocio-economicbenefitofprojectsinthepipelinearealsonotsufficientlyarticulated.Thislimitsthefundingthatcanbeattracted,asgrantorconcessionalfinancierstypicallywanttocatalyseormaximisethepositivesocio-economicimpactwiththeirfunding.Developingaprojectpreparationtemplatethatspecifieshowthecost,developmentprogress,andsocio-economicimpactmustbedeterminedateachstageoftheprojectlifecyclewillreducetheperceivedriskandbetterarticulatethebenefitsofprojectstoattractgreaterfunding.75LocalisingsolarPVandwindenergyvaluechainsareakeyfocus,ashighlightedinSAREM.184JETImplementationPlan2023–2027Chapter8:GreenHydrogenRequiredoutput:Establishedworld-classanddifferentiatedprojectpreparationstandardforGH2projectstoguideprojectdevelopmentintheregion,withprojectinformationsharedonaportaltoattractglobalinvestors.8.3.2.3DemandProductplacement:GH2anditsderivativesarenascentwithhighcostsrelativetogreyalternatives.Thisresultsina~1.2Xto2X+‘Greenpremium’76forofftakersanddownstreamvaluechains.Inaddition,duetothehighuncertaintyandpotentiallyhigh-costandslowlearningratesonthesupplyside,offtakersarewaryofcommittingtooearlytolong-termcontracts.OvercomingthisGreenpremiumwillrequiresupportonboththesupply(forexample,thelowerfinancingcosts,andaccesstobest-in-classtechnologymentionedabove)anddemandside.Onthedemandside,financialinnovationisrequiredtolowerpriceuncertaintyforofftakers,forexample,viaContractforDifference(CfD)instrumentsbetweenlocaldevelopersandbothinternationalandlocalofftakers.Furthermore,traderelationswithkeyexportmarketsarerequiredtocreateanenablingenvironmentforcommercialdealsbetweenlocaldevelopersandinternationalofftakers.Requiredoutput:Establishedgovernment-to-governmentrelationshipsandanenablingenvironmentwithleadmarkets(thatis,marketsabletoaffordGreenpremiumtofacilitateexporttradedealsanddevelopedmechanismstoincreaseandsecureofftake(forexample,Germany’sH2GlobalschemeandtherecentlyproposedCfDmechanismbyJapan77).AbilitytomarketexcessRE:WhendesigningaGH2plant,REplantsaretypicallyoversizedbyafactorof2–3Xtheelectrolysercapacity,resultinginupto~20%–40%curtailedenergy.Withoutbeingabletoevacuateandmonetisethiscurtailedenergy,thelevelizedcostofhydrogen(LCOHs)couldincreaseby~10%–20%.78Toensurethispowercanbeevacuated,improvingprojecteconomics,andcontributingtoSouthAfrica’senergysecuritywithoutburdeningtheconsumer,afit-for-purposemarketmechanismisrequiredasatemporarysolutionuntilanationalelectricityspotmarketisavailable.IfprojectsarenotabletoevacuateandsellexcessRE,SouthAfricanGH2productionpriceswillstruggletobecompetitiveevenagainstmarketswithmuchworseloadfactors(forexample,Germany).Requiredoutput:EstablishedmarketmechanismthatenablestradingofexcessREfromGH2projects.76Greyammoniacosts~USD700/tNH3comparedtoGreenNH3costof~USD800–1400/tNH3at2030atcarbontaxofUSD200/tCO2e.77WEF.(2023).EnablingMeasuresRoadmapforLow-EmissionHydrogen.78AtthebreakevencostofproducingtheelectricitywithinGH2plant.ThiscostiscomparabletocurrentREIPPPcosts,andlowerthantheEskomTariff.JETImplementationPlan2023–20271858.3.2.4SharedinfrastructureLimitedgrid,port,andothersharedinfrastructuretobringprojectsonline:GH2andGH2-derivativeplantsrequirecriticalinfrastructuretobeinplacebothforcompetitiveproductionandfinalproductplacement.Forexample,thereisnobusinesscaseforthefirstwaveofmega-projectswithouttheabilitytoexporttointernationalmarkets.Clarityandcertaintyonportinfrastructureandaccesstoback-of-portfacilitieswillbecriticaltobuildinvestorandofftakercertainty.AnotherexamplerelatestotheabilitytoevacuateexcessREfromGH2plants–criticaltoensuringtheproject’seconomicviability–whereclarityandcertaintyonspecificgridinfrastructureinvestmentsarecritical.However,significantuncertaintyexiststodayonthecurrentdevelopmentstatusandtimelinesofspecificcriticalsharedinfrastructureprojects(forexample,the~400kVtransmissionlineneededasafirststeptoconnecttheNorthernCape-basedREsupplywithWesternCapedemand).Thisuncertaintydrivessignificantproject-on-projectriskandcaninvalidateaproject’sbusinesscase.Project-on-projectriskisaglobalproblemfacedbyGH2developersandcanbeasourceofnationalcompetitiveadvantageifeffectivelyandtransparentlyaddressed.SouthAfricawouldalsobeabletounlockacompetitiveadvantageifitisabletoco-developandintegrategridandpipelineinfrastructurewithNamibia,asthisincreasesaccesstoworld-classREresourceswhilstsharingexpensiveinfrastructuredevelopmentcosts.Requiredoutput:Createdanationalinfrastructureprogrammeplantoco-ordinate,accelerateandprovidevisibilityonthedevelopmentofallenablinginfrastructureprojects(port,grid,pipeline,andrail)acrossindustriesandspecifyhowinfrastructuredevelopmentcostswillbeshared(sothatonedeveloperdoesnottakeontheriskoftheentireinfrastructureproject).Slowpermittingandco-ordination(betweenstate-ownedenterprises(SOEs)andgovernmentbodies):GH2projectsrequiremanypermitsfromdifferentgovernmentbodiesandstate-ownedcompaniesforinfrastructuredevelopment(forexample,Eskomforgrid,Transnetforportandpipeline,DepartmentofForestry,FisheriesandEnvironment(DFFE)forenvironmentalauthorisation,andlocalandprovincialgovernmentforconstructionauthorisation,roadaccess,andsoon).Streamliningandco-ordinatingapplicationsthroughestablishingindustrial‘clusters’topoolapplicationscanaligninfrastructuredevelopmentacrossgovernmentdepartmentsandinfrastructureowners(forexample,EskomandTransnet),whichlimitstheneedtoreapplyforpermitting,andensuresmaximumutilisationofsharedinfrastructure.Thisco-ordinationcanfurtherreducetimelineandcostrisksbyprovidinggreaterclarityonthepermittingrequirementsandallowingpermitapplicationsearlierintheprojectlifecycle,asiscurrentlyachievedthroughrequiringlowerenvironmentalapprovalrequirementsinREDZregions.Requiredoutput:Simplifiedpermittingprocessestoincreaseco-ordinationandspeedamongstdifferentgovernmentdepartmentsandSOEs,stipulatingclearrequirementsforeachpermit.186JETImplementationPlan2023–2027Chapter8:GreenHydrogen8.3.2.5TechnologyincubationandworkforceskillsInsufficientlocalresearchanddevelopment(R&D)andinnovationcapacitytosecureaglobalcompetitiveadvantage:SouthAfrica’sR&DexpenditureasapercentageofGDPisalmost75%lower79thantheworldaverage,whichlimitsitsabilitytodrivetechnologyinnovationandestablishalong-termcompetitiveadvantageintheGH2valuechain.SouthAfricamustprioritisefundingbothpublicandprivateinstitutionsatthefrontlineofR&DandinnovationonkeyGH2valuechainelementswhereitcanbuildacompetitiveadvantage(forexample,fuelcellandelectrolysercomponentmanufacturing,GH2beneficiationproductionapplicationssuchasSAFandDRIforGreensteel)toanchordemandforahigh-skilledworkforceofthefutureandsecureSouthAfrica’scompetitivepositionintheglobalGH2industry.Outputrequired:Increasedandfast-trackedR&Dfundingforpublicandprivateresearchtopromoteinnovationandlong-termcompetitiveadvantageintheGH2valuechain.Insufficientskillsacrossthevaluechaintodelivertheprojectpipelineandmaximisesocio-economicimpact:TheGH2pipelinerequiresaworkforcecapableofdesigningandconstructingprojectsontime,withinbudget,andattherequiredquality.Itisunclearwhatskillsarerequiredorwhethertherearesufficientskillsacrossthevaluechain,particularlyinREdevelopment–thelargestemploymentleverinGH2projects.Itisalsounclearwhatskillsarerequiredandavailableinwhichregions.Skillingorreskillingtheworkforcetomeetthisdemandcanunlocksignificantsocio-economicbenefitsthroughnew,decentjobs.TheapproachtoskillsplanningforJETimplementationissetoutinChapter9.Outputrequired:DevelopedaconsolidatednationalskillingandjobtransitionprogrammethatconsidersthejobrequirementsforGH2.79WorldBank.(2019).WorldDevelopmentIndicatorsDataset.ThemostrecentavailableannualdataforSouthAfricaisfrom2019.JETImplementationPlan2023–20271878.3.2.6PolicyandregulationsTransparencyonwheelingcosts:Feedingexcesselectricityintothegridandreceivingafairtariffinreturniscriticalforensuringcompetitivelevelizedcostofhydrogen(LCOH)andcontributingtoenergysecurity.Clarityonthewheelingframework,astheNationalEnergyCrisisCommittee(NECOM)iscurrentlydriving,iscrucialtoreducingprojectriskandmovingmoreprojectstowardfinancialviability.Inthelongterm,anancillarymarketisneededasGH2plantsandXtPprojectswillalsobeabletoprovidegridstability.Requiredoutput:ProvidedaclearwheelingframeworkandcostregimeforGH2producersacrossthenationalgrid.ExportmarketregulationsthatconsiderSouthAfrica’sstartingpoint:BeingabletoexportGH2andGH2-derivativesiscriticalforthefirstwaveofSouthAfricanGH2projects.Keyexportmarkets–suchastheEUthroughtheDelegatedAct–areleadingindefiningregulationsdeterminingwhatcanbeconsideredacertifiable‘Green’product.Adheringtothiswillbecriticaltosecuringofftakeandprojectviability.SouthAfricandevelopersmusthaveaseatatthetabletoensurethattheirlocalcircumstancesandstartingpointareconsideredincriticalelementsofthelegislation–thisiscoretothefoundationsofaJustTransition.Notably,aviable,clearinterpretationofthelegislationshouldbeaffordedtoallSouthAfricanprojectswithoutdriftingawayfromthecoreprinciplesofwhatthislegislationistryingtoachieve.Keyelementsincludetheinterpretationofthefollowing:1.Additionality80forSouthAfrica-baseddevelopers2.Temporalcorrelation81forSouthAfrica-baseddevelopers3.Proportionalallocationprinciples82forSouthAfrica-basedGH2-derivativesproducers4.Sustainablecarbonsourcingrequirements.83Requiredoutput:Established‘onevoice’onSouthAfrica’sofficialpositionand‘asks’onkeyinternationalregulations–notably,theEU’sDelegatedAct.80Electrolysersmustbedirectlyconnected(cableorPPA)tonewREproductionsources.81REmustbeusedwithinacertainperiodaftergeneration.82Processtoallocateanindividualproductsemissionfromthatofafacility/process.83CO2sourcingcriteria,includingtypesoffeedstockandprocesses,forproducinge-fuels(e.g.SAF).188JETImplementationPlan2023–2027Chapter8:GreenHydrogen8.3.2.7CommunityengagementImpactedcommunitiesandbroadersocietyunawareofthesocio-economicbenefitofGH2industry:Thereislimitedunderstandingwithinsocietyaboutthepositivesocio-economicimpactsoftheGH2economy,includinghowthisindustrycancreatenewjobsacrossskillsets,stimulatelocaleconomies,improveinfrastructure,andleadtocleanerlivingenvironments.Althoughsignificantprogresshasbeenmadeinquantifyingthesocio-economicbenefitthattheGH2industrycanunlockamongstprivatedevelopersandnationalinstitutions,therehasbeenlimitedengagementwithcommunitiesdirectlyimpactedbytheGH2industryandbroadersociety.CommunityengagementsareimportanttobridgetheGH2awarenessgap,ensuretransparency,addressconcerns,andhighlightthedirectandindirectbenefitstogainsociety’ssupport(thatis,itssociallicensetooperate).Withoutthissupport,theSouthAfricanGH2industrywillnothavethelegitimacyneededtoscale.Requiredoutput:Developedanengagementstrategytocommunicatethesocio-economicbenefitsofestablishingaGH2industrytoimpactedcommunitiesandbroadersociety,andaddresstheirconcernseffectively.ThesevenchallengesthatSouthAfrica’sGH2industryfacesareintrinsicallyinterconnectedandmustbeaddressedsimultaneously,asillustratedinFigure18.Forexample,GH2developmentstudiesareinherentlyhigh-riskduetotheindustry’snascency(bothfromasupply/technologyperspectiveandfromademand/‘whatcanthemarketafford’perspective).Thisrisk,inadditiontotheproject-on-projectriskmentionedearlier,makesitdifficultforinvestorstofullycommittoprovidingthescaleoflow-costfundingrequired.Withoutinvestorsbehindtheproject,offtakersarenotwillingtocommit,whichmeanstheprojectdoesnotgoahead,thereforeinvalidatingtheneedforsharedinfrastructure,workforcedevelopment,communityengagement,andpolicyreform.Therearemultiplesequences/startingpointsfromwhichthisviciouscircleofinterdependenciesplaysout–thekeypointbeingthatanintegrated,collaborativeapproachisrequiredtoensuretheright‘catalytic’actionsaretakentoovercomethesechallenges.JETImplementationPlan2023–2027189Figure18:TheseveninterdependentchallengesthatSouthAfrica’sGH2industrymustovercomeLimitedfundingincreasesneededforsupportingpolicyLimitedpublicsupportlimitsPolicyLimited,unclearpolicyincreasesuncertaintyandriskurgencyforpolicysupport7FundingUnclearbenefittowidereconomylimitspublicsupport1Fundersriskaverseduetotechnologyandotakeuncertainty6CommunitySevenchallengesGrantneededfundingtothatmustovercomehighdevelopmentriskengagementsimultaneouslybe2SupplyLimitedworkforcereducesovercomeforpositivesocio-economicimpactSouthAfrica'sOtakerswaitingtobenefitGH2industrytofromlearningratesLimitedpolicydecreasesskillsmaterialiseFirmdemandneededfordevelopmentinitiativesprojecttoprogress4Workforce53DemandSharedskillsinfrastructureLimitedinfrafrastructureincreasescostsbeyondaordabilitythresholdUncertaintyonprojectandProjectuncertaintylimitsinfrastructureinfrastructuredevelopmentlimitsdevelopmentskillingprogrammesInsuicientskillstodevelopprojectsandinfrastructureCh8Fig16GreenH2190JETImplementationPlan2023–2027Chapter8:GreenHydrogen8.3.3OutputsOutputs,ordeliverables,foreachofthesevenchallengeswith18supportinginitiativesandinstitutionalownershavebeendevelopedtoachieveSouthAfrica’slong-termvisionofcreatingacompetitivelocalandglobalGH2industry,asshowninTable27.TheIndustrialDevelopmentCorporation(IDC)hasbeenproposedasthefunding,sharedinfrastructure,andstakeholderinstitutionalownerduetoitssuccessinsecuringfundinganddrivingSouthAfrica’sGH2commercialisationstrategy.TheDepartmentofTrade,IndustryandCompetition(DTIC),DepartmentofHigherEducationandTraining(DHET),DepartmentofScienceandInnovation(DSI),andthePresidencyhavebeenproposedastheinstitutionalownersforthesupplyanddemand,technologyincubationandworkforceskills,andpoliciesandregulationchallenges,respectively,astheyarealreadydrivingtheseinitiatives.AsingleinstitutionalownerhasbeenassignedtoeachoutputtoensureclearresponsibilityandownershiptodeliverresultsattherapidpacerequiredtoensurethatSouthAfricacancapturetheGH2opportunity.Althoughasingleinstitutionalownerhasbeenassigned,thisdoesnotmeanthattheownercanoperatewithoutthekeystakeholders.Forexample,DBSA,thePIC,andNationalTreasury(NT)arekeystakeholdersforthefundingoutputs.JETImplementationPlan2023–2027191Table27:OverviewoftheproposedinstitutionalownersforactionstodeliveroutputtoovercomethechallengesChallengeProposedOutputFundinginstitutionalownerSourcednewgrantsfromdedicatedGH2fundstoincreasetotalgrantfundingavailableforGH2developmentstudiesIDCIncreasedavailabilityof,andaccessto,low-costfundinginstrumentstoreducetheperceivedandactualriskofinvestmentinSouthAfricanGH2projectsSupplyDTICEstablishedgovernment-to-governmentrelationshipsandanenablingenvironmenttoattractglobaltechnologyandlocalmanufacturinginvestmentsinkeyelementsoftheGH2andsupportingvaluechainstoensurethelong-termsecurityofsupplydriveindustrialisationoftheSouthAfricaneconomyDemandDTICEstablishedaprojectpreparationstandardforGH2projectstoguideprojectdevelopment,withprojectinformationsharedonaportaltoattractglobalSharedIDCinvestorsinfrastructureEstablishedgovernment-to-governmentrelationshipsandanenablingenvironmentwithleadmarketstofacilitateexporttradedealsanddevelopedmechanismstoincreaseandsecureoff-takeEstablishedmarketmechanismthatenablestradingofexcessREfromGH2projectsCreatedanationalinfrastructureprogrammeplantoco-ordinate,accelerateandprovidevisibilityonthedevelopmentofallenablinginfrastructureprojects(port,grid,pipeline,andrail)acrossindustriesandspecifyhowinfrastructuredevelopmentcostswillbesharedSimplifiedpermittingprocessestoincreaseco-ordinationandspeedamongstdifferentgovernmentdepartmentsandSOEs,stipulatingclearrequirementsforeachpermit192JETImplementationPlan2023–2027Chapter8:GreenHydrogenActionstodeliveroutput(supportinginitiativestoachieveoutput)EngagenationalandinternationalDFIs,donorsandpartnersforagreatermixofdevelopmentfinance,particularlyincreasedgrantfunding,withreasonablecommercialtermstohelpde-riskdevelopmentstudies,therebyhelpingattractthelow-costprivatecapitalneededtocloseprojects’fundinggapsDevelopblendedfinanceinstrumentsthatcanleverageconcessionaldebtavailabletocrowdincommercialsourcesoffunding(i.e.equity),aswellasfinancialinstruments(e.g.ex-posttaxbreaksintheeventofelectrolysercostoverruns)toreducetheperceivedriskofbusinessinSouthAfricaandlowertheoverallcostofcapitalDevelopandintroducestandardsforGH2production,storage,refuelling,transportation,andenduseEstablishgovernment-to-governmenttraderelationshipstosecureaccesstotechnologyandIPforelectrolysers,fuelcells,andH2vehicles(e.g.whatSouthAfricahistoricallyachievedwithToyota)EvaluateandaddresstheshortfalloflocalmanufacturingcapacityincriticalstepsoftheGH2andassociatedvaluechains(e.g.electrolysercomponents,fuelcellmanufacturing,H2vehiclemanufacturing,andsoon)withapipelineofprojectstoensurelong-termsupplysecurityanddrivetheindustrialisationoftheSouthAfricaneconomyReviewandrefineSEZincentivesandaligninterpretationofSEZrulesandguidelinesinamannerthatenableslocalGH2projectdevelopmentProvideastandardtemplatethatspecifiesthetypeandaccuracyofdata(e.g.thecostingmethodandaccuracy,socio-economicimpact)fordeveloperstocompleteforeachstageofdevelopment(e.g.feasibility,FrontEndEngineeringDesign(FEED))withthisinformationmadepubliclyavailableonaportalforpotentialinvestorsandfinancierstoaccesstheriskandpositivesocio-economicimpactLeverageconcessionalfinancetoestablishinnovativeCFDmechanismstobridgetheaffordabilitygapinlocalofftakeanddealsbetweenSouthAfricandevelopersandglobalofftakers.Establishgovernment-to-governmentrelationshipswithkeyofftakemarketstosecurefavourableagreements(e.g.exporttariffexemptions,pricesubsidies,long-termoff-take)toplaceproductsDefineandimplementafit-for-purposetemporarymarketmechanismtotradeexcessrenewableswithawillingbuyeratafairpriceuntilthenationalelectricityspotmarketisavailableCo-ordinateinfrastructure‘masterplan’withfirmgovernmentandinfrastructureowner(e.g.EskomandTransnet)commitmentsforfinalinvestmentdecision(FID)andcommercialoperationdates,visibilityontheproposedfundingmodelandaportalfordeveloperstotracktheprogressoftheseinfrastructureprojectstoreducetheproject-on-projectriskSimplifyandco-ordinatepermittingprocessestoincreasespeedamongstdifferentgovernmentdepartmentsandSOEs(thatis,createaone-stophubforinfrastructureaccessanddevelopment),throughwhichpoolingapplicationscanaligninfrastructuredevelopmentacrossgovernmentdepartmentsandinfrastructureownerstomitigateanytimelinedelaysJETImplementationPlan2023–2027193ChallengeProposedOutputinstitutionalownerTechnologyDSIandDHETIncreasedandfast-trackedR&Dfundingforpublicandprivateresearchtoincubationpromoteinnovationandlong-termcompetitiveadvantageintheGH2valueandworkforcechainskillsPoliciesandPresidencyDevelopedaconsolidatednationalskillingandjobtransitionprogrammeregulationsconsideringthejobrequirementsforGH2andotherJETinitiativesProvidedaclearwheelingframeworkandcostregimeforGH2producersacrossthenationalgridEstablished‘onevoice’onSouthAfrica’sofficialpositionand‘asks’onkeyinternationalregulationsCommunityIDCDevelopedacommunityengagementstrategytocommunicatethesocio-engagementeconomicbenefitsofestablishingaGH2industrytoimpactedcommunities(e.g.GH2SEZs)andbroadersocietyandaddresstheirconcernseffectively8.3.4Short-TermDashboardTheshort-termdashboardshowninFigure19definesmetricstomeasureprogress,capacity,andsystemswithinonetotwoyears,thatis,over2024–2025.Thesemetricsensurethatenablersacrossallsevenchallengesareinplacetoimprovecompetitiveness,reducerisk,andundertakeprojectdevelopmentatpace.Further,itensuresthatpilotprojectsaredeliveredtoestablishthelocalGH2industry.Thedashboardprimarilytargetscompletingdiscretedeliverables.However,therearefourmetricswithquantitativetargets:„USD100milliongrantfunding:Thisvaluetargetedasgrantfundingcancrowdin3X–9Xprivatesectorfunding84tomeetthetotaldevelopmentcostofUSD300million.„Fivebilateralagreements:ThisistargetedasSouthAfricahasalreadymadesubstantialprogresswithfivecountries(SouthKorea,Japan,Denmark,Netherlands,andGermany)andshouldbeabletosignbilateralagreementswiththesecountrieswithinonetotwoyears.84NBI.(2022).FinancingSouthAfrica’sJustTransition.194JETImplementationPlan2023–2027Chapter8:GreenHydrogenActionstodeliveroutput(supportinginitiativestoachieveoutput)AllowprojectdevelopmentexpensestobenefitfromR&DtaxallowancestosupportinnovationofGH2processesanddevelopmentofthefirstwaveofGH2projectswithhighlyuncertainreturnoninvestment(ROI).Fast-trackandincreasefundingtopublicandprivateR&Dinstitutionsandtechnologyaccelerators,togetherwithrequiredsupportprogrammeswhereSouthAfricahasaclear‘right-to-win’toanchoragloballycompetitiveR&DcapabilityReviewtheskillsrequiredacrosseducationlevelsforGH2andthebroaderJETanddevelopaconsolidatednationalroadmapthatoutlinestherolesoftheprivateandpublicsectorstodeliverandfundskillstrainingtoclosetheskillsgapandmaximisesocio-economicimpactDevelopawheelingframeworkwithclearconditionsfor(andcostsassociatedwith)wheelingonthetransmissionanddistributiongridstoallowthesaleofexcessREfromGH2productionandaccessingREindifferentregionsofthecountryEstablishanationalforumtoserveasonevoiceforthelocalGH2industryandpresentacoherentbusinesscaseforfairandfavourableinterpretationsoflegislationandregulationsinkeyexportmarkets,inparticulartheEuropeanUnion’sDelegatedAct,thatconsidersSouthAfrica’sstartingpointandchallengesUndertakecommunityoutreachandtownhallengagementsonthesocio-economicbenefitsoftheGH2economyandtoaddressconcerns„1ktpaGH2refuelling,20KtpaGH2productionandthreefuelcellandelectrolyser-relatedprojects:Thisisthepipelineofpilotorsmall-scaleprojectsunderdevelopment.„USD5millionR&Dpublicsectorfunding:Thisisthespendingforecasttodevelopalong-termcompetitiveadvantagewhereSouthAfricahasacompetitiveadvantage,forexample,DRI.JETImplementationPlan2023–2027195Figure19:Illustrativeshort-termdashboard(2024–2025)tomeasurecapacityandsystemsoutcomesILLUSTRATIVESTATUSCompletedOntrackAtriskofslippingBehindscheduleFunding1~USD100Mn7Nationalinfrastructuremasterplangrantfundingsecured1withkeydatesandportaltotrackprojectprogresssetupInfrastructure2Fivebilateralagreementsfor8OneStopPermittingShopthattechnologyaccessandproductstreamlinesandco-ordinatesallplacementsecured2permittingsetup31KtpaH2refuellingstations9Nationalskilling/jobtransitioninoperationprogrammedevelopedwithfocusTechnologyincubationonrequiredskillsacrossJETSupplyandworkforce420KtpaGH2production10USD5Mnp.a.publicsectorfrompilotprojectsskillsfundingforresearchanddevelopmentsecured5Threefuelcell-relatedandPolicyand11Nationalforumforelectrolyser-relatedmanufacturingregulations'voiceofSouthAfricaGH2'forexportmarketregulationprojectsinoperationCommunityestablishedengagement(e.g.catalyst,MEA)12CommunityengagementplanDemand6WheelingframeworkandREtradingplatformforexcessrenewablesinoperation1.Grantfundingcancrowdin3x–9xprivatesectorfunding[NBI,FinancingSA'sJustTransition.(2022)]tomeetthetotaldevelopmentcostofUSD300Mn.2.SAhasmadesubstantialprogresswithSouthKorea,Japan,Denmark,Netherlands,andGermany,andshouldbeabletosignbilateralagreementsin1–2years.Note:Remainingtargetsbasedonpipelineofprojectsandinputsfromstakeholdersduringengagementsessions.8.3.5Medium-TermDashboardCh8Fig17GreenH2Themedium-termdashboard,showninFigure20,definesmetricstomeasureperformanceoverthenextthreetofiveyears,thatis,2026–2028.Thesemetricsmeasureprojectdevelopmentandkeyenablersforprojectsmaterialisingacrossdemand(offtake),funding,andsupply(localfuelcellandelectrolysermanufacturingcapacity)suchthatlarge-scaleprojectsbegintocomeonlinetowardstheendofthedecade.Therationalebehindthemetricsisasfollows:„Projectsinoperation:The500KtpaofGH2targetisinlinewiththecommercialisationstrategyandisrequiredtoachievethe2050‘demanduplift’targetof~7mtpa.Thisincludesbothsmall-andlarge-scale85projects.„Offtakesecured:100%finalproductofftakeisneededforprojectstoprogressbeyondfinalinvestmentdecision(FID),whilstthe30%targetin2025providesaleadingindicatorofthequantumofviableprojects.Thisincludesbothlocalandexportofftake,expressedasGH2equivalent.85Definitionofsmallandlarge-scaleistobedefined.Small-andlarge-scaleoperationscanbemonitoredasseparatemetrics.196JETImplementationPlan2023–2027Chapter8:GreenHydrogen„Concessionalfunding:TheUSD5billionconcessionaldebttargetwillaccountfor~50%ofthetotalprojectdebtrequirementtoimprovethecostofcapital.Grantfundingisnotincluded,asgrantfundingisprimarilyneededintheshorttermtofunddevelopmentstudiesandpilotprojectexecution.Thepriorityinthemediumtermhasshiftedtofundingtheexecutionofprojects.„Electrolysermanufacturing:The100MWp.a.targetwillonlyenablelocalproductionof~10Ktpa,whichissmallrelativetoSouthAfrica’s~7mtpatargetin2050.Therefore,initialelectrolysersiteswillserveaspilotprojectsforproofofconceptbeforesettingupmulti-GWlocalmanufacturing.„Fuelcellmanufacturing:The250MWp.a.isinlinewiththecurrentfuelcellproductionpipeline.Figure20:Illustrativemedium-termdashboard(2026–2028)tomeasureperformanceoutcomesILLUSTRATIVESTATUSCompletedOntrackAtriskofslippingBehindscheduleSTATUSCURRENTTARGET202520271ProjectsinoperationXKtpa270Ktpa500Ktpa12TotalfinalproductotakesecuredX30%100%23ConcessionalfundingsecuredXBnUSD1BnUSD5Bn34ElectrolysermanufacturingXMWp.a.20MWp.a.100MWp.a.45FuelcellmanufacturingXMWp.a.10MWp.a.250MWp.a.51.InlinewithGHCSandisrequiredtoachieve2050targetof~7mtpa(incl.small-andlarge-scaleprojects).2.Finalproducto-takeof100%isneededforprojectstoprogressbeyondFID,whilst30%targetin2025providesleadingindicatorofthequantumofviableprojects.3.Accountsfor~50%oftotalprojectdebtrequirementtoimprovecostofcapital(grantfundingisnotincluded).4.Onlyenableslocalproductionof~10ktpa,hence,willserveaspilotprojectsforproofofconceptbeforesettingupmulti-GWlocalmanufacturing.5.Inlinewithcurrentfuelcellproductionpipeline.Theroadmap,illustratedinFigure21,outlinesthedeadlineforthe18supportinginitiativestomeettheshort-andmedium-termoutcomes.Ch8Fig20GreenH2JETImplementationPlan2023–2027197Figure21:GH2implementationroadmaptoachievetheshort-andmedium-termoutcomesPlanningandframeworkdevelopmentProjectexecutionandindustrialisationMarch2024March2025March2026March2027March20281DFI,donor,andpartner3GH2standards6SEZreforms8SEZreforms2Newlow-costdebtengagementandfinancing49Bilateralgovernmentinstruments13DevelopmentexpensesagreementsasR&Dtaxallowance5Localmanufacturing16Wheelingframeworkpipelinetransparency7Projectpreparation17Nationalforumforexporttemplateandportalmarketregulationsforfinanciers18Community10TemporaryREengagementstradingmarket11Nationalinfrastructuremasterplan12Streamlinedandco-ordinatedpermitting14R&Dfunding15NationalskillingandjobtransitionprogrammeXFundingXSupplyXDemandXSharedXTechnologyincubationXPoliciesandXCommunityinfrastructureandworkforceskillsregulationsengagement8.3.6Long-TermDashboardThelong-termimpactdashboard,showninFigure22,measuresprogressagainsttheoverarchingvisionforGH2anditsrolewithinthebroaderJETIP.Therefore,theimpactdashboardincludesCh8Fig19GreenH2arangeofsocio-economicimpactmetricssuchasdirectandindirectjobscreated,individualsre-skilled/up-skilledandSMMEgrowth,aswellaseconomicindicatorssuchasGDPgrowthandtradebalanceimpact,andenvironmentalimpactthroughGHGreduction.Therationalebehindthemetricsisasfollows:„Directjobscreated:The2035productiontargetis~2mtpa,~30%ofthe~7mtpaproductiontargetin2050.86Assumingadirectjobmultiplierof2,87thefulldirectjobpotentialfromthe1.8milliondirectandindirectjobsis~600000in2050.Scalingthisinwiththe2035productiongivesadirectjobtargetof180000.„Indirectjobscreated:Applyingthesamescalinglogicasdirectjobsonthe~1.2million2050indirectjobs,the2035indirectjobtargetis360000.86DTICandGreenHydrogenPanel.(2022).GreenHydrogenCommercialisationStrategy;7mtpaisGH2equivalent.87WorldBank.(2022).CountryClimateandDevelopmentReport.198JETImplementationPlan2023–2027Chapter8:GreenHydrogen„Individualsupskilled/reskilled:Theindividualstobeskilledaretakenasthesumofthedirectandindirectjobscreated.Thistargetwillbeupdatedaftertheconsolidatednationalskillsroadmapisdeveloped.„SMMEgrowth:SMMEscurrentlycontribute~40%ofGDPinSouthAfrica.88The50%targetrepresentsanincreaseinthecurrentbase.„GDPgrowth:Applyingthesamescalinglogicasfordirectandindirectjobs,the2035targetisa1%increaseinGDP(ZAR120billion).„Tradebalance:ZAR60billionpositivetradebalanceimpactif30%ofGDPimpactisexport-driven,isinlinewiththelowerboundoftheproductionforexportdemandfromthecommercialisationstrategy.89„GHGImpact:160MtCO2eGHGreductiontargetalsoscaleswiththe2050targetof541MtCO2e.Figure22:Illustrativeimpactdashboardtomeasurethelong-term(2035)impactagainsttheoverarchingvisionILLUSTRATIVESTATUSCompletedOntrackAtriskofslippingBehindscheduleSTATUSCURRENTTARGET1DirectjobscreatedXXX2035+18000012IndirectjobscreatedXXX+36000023Individualsup/reskilledSocio-economicXXX+50000034SMMEshareofGH2GDPimpactXXX50%45GDPgrowthXXX+1%56TradebalanceimpactEconomicXXX+ZAR60Bn6Environmental7GHGreductionXXX-160MtCO2e71.Scalinginlinewith~6000002050directjobpotentialwith30%ofthetotal2050GH2productioncapacity.2.Applyingsamescalinglogicasdirectjobson~1.2million2050indirectjobs,2035indirectjobtargetis360000.3.Sumofthedirectandindirectjobscreated,roundeddown.4.SMEscurrentlycontribute~40%ofGDPinSouthAfrica;50%targetrepresentsanincreaseinthecurrentbase.5.Applyingsamescalinglogicasfordirectandindirectjobs,2035targetisa1%increaseinGDP(ZAR120Bn).6.If30%ofGDPimpactisexport-driven,inlinewithlowerboundofproductionforexportdemandfromGHCS.7.Scaleswiththe2050targetof541MtCO2e.88OECD.(2022).FinancingSMEsandEntrepreneurs2022:SouthAfrica.Ch8Fig18GreenH289DTICandGreenHydrogenPanel.(2022).GreenHydrogenCommercialisationStrategy;7mtpaisGH2equivalent.JETImplementationPlan2023–20271998.4PortfolioGovernanceandInstitutionalArrangementsDuetoitsmandate,capacity,andestablishedtrackrecordinthesector(bothnationallyandinternationally),theIDCwillconveneaGH2JETAdvisoryCommitteeofmultiplestakeholders,andestablishaGH2JETSecretariattoenabletherapiddeliveryneededtocapturethisindustrialisationopportunity,asshowninFigure23.ThemandateoftheGH2JETAdvisoryCommitteeistodothefollowing:„Provideacentralpointforallprivatedevelopers,publicsectorinstitutions,andindustrybodiestoengageonSouthAfrica’sGH2developmentprogressandchallenges„Enablerapidimplementationoftheactivitiesbysupportingandco-ordinatingactivitiesacrossthesevenGH2workstreamsoftheImplementationPlan.„Thebodywillnothaveanydecision-makingpowerinexecutinginitiativesasitactsasasupportfunction.TheGH2JETSecretariathasthreefunctionalroles:„EnsureallsevenGH2workstreamsaredrivingtowardstheoverallGH2visionandtargets„Identifyandmanageinterdependenciesacrossworkstreams,forexample,localR&Dprogressthatcanenablesupplysecurity„Trackandprovidevisibilitytostakeholdersontheprogressacrossallworkstreams.TheGH2JETSecretariatwillreceiveandprovidefeedbacktotheAdvisoryCommitteeofpublic,private,civilsociety,andlabourinstitutionstoensurethatawiderangeofstakeholdercommentsareconsideredinestablishingSouthAfrica’sGH2industryandprovideasinglepointofcontactforprivatedeveloperstosharetheirprogressandtoaccesssupport.TheGH2JETSecretariatwillmakepublishprogressontheworkstreamsanddevelopmentstodriveaccountabilityandprogress,andwillreportintotheJETPMU’snationalgovernancearrangements.200JETImplementationPlan2023–2027Chapter8:GreenHydrogenFigure23:GH2JETgovernanceandinstitutionalarrangementsGH2JETSecretariat–IDCGH2JETAdvisoryCommitteeƒSinglepointofcontactforpublicandprivateGovernment,privatesector,labour,andinstitutionscivilsocietyrepresentativestoensurebroadspectrumofviewsƒSupportsandcoordinatesactivitiestoensureƒSinglepointofcontactforpublicandalignment,integrationandvisibilityacrossallsixworkstreamsprivateinstitutionsƒSupportsandcoordinatesactivitiesƒDoesnothavedecisionmakingpower,thisbelongstoworkstreamstoensurealignment,integrationandvisibilityacrossallsixworkstreamsƒDoesnothavedecisionmakingpower,thisbelongstoworkstreamsPrivatedevelopersRepresentativesfromprojectsunderdevelopmenttohighlightprojectchallenges,andtoaccesssupportfromrelevantinstitutionsƒProvidesprogressupdateonprojectsandchallengesthatneedsupporttoaddressWORKSTREAMSFundingSupplyDemandSharedinfrastructureIDCDTICDTICIDCNT,DBSA,PIC,DIRCO,DSI,DIRCO,Presidency,Presidency,DIRCO,PresidencyTreasury,privateTreasury,IDC,NERSA,InfrastructureSA,DPWI,developersEskomDepartmentofTransport,Transnet,Eskom,NT,DFIsTechnologyPoliciesandCommunityincubationandregulationsengagementworkforceskillsPresidencyDHETPresidencyDMRE,NERSA,Eskom,InstitutionalownerDTIC,DIRCOStakeholdersDSI,SETA,BUSA,privateDMRE,NERSA,Eskom,developers,NTDTIC,DIRCOJETImplementationPlan2023–2027201AnnexureA:CurrentGH2-relatedprojectprogressTwenty-fourGH2-relatedprojectsacrossvariousregionsandstakeholdersrepresentanestimatedvalueofaroundUSD300billion.Amongthese,nineprojectshavebeengrantedSIPstatusandcollectively.Theprojectsaremakingsubstantialstridestowardstheirprogressionandrealisation.ProjectnameProjectdescriptionDeveloperCapexDevexFinalproduct(ZAR(ZARbillion)90million)91PrieskaPowerGH2andammoniafromMahlakoaPhala11–12290–300GH2andGNH3ReservesolarandwindenergyInvestments,Central(Ph1)(Ph1)EnergyCorporation(Cenec),IDCUbuntuGreenGH2productionfromUbuntuGreen5.56000GH2andGNH3Hydrogen-Phase1solarandwindenergyEnergyBoegoebaaiAtlanthiaGreenGH2andammoniainAtlanthiaGH26.27893GNH3Ammonia/HydrogenFreeportSaldanhafromPhase1solarandwindenergy.UpilangaSolarGH2productionfromEmvelo,Energia,17–34120–150GH2and&GreenH2ParksolarenergyInternationalpossibly(UpilangaValley)technicalpartnersinPhase1Germany,DBSAGH2–derivativesSasolburgHySHiFTSecundaSustainableAviationFuelENERTRAG,Sasol,18.9SAF(e-Kerosene)(SAF)productionusingLindeexistingSasolSecundaassetswithnewelectrolysersandRE90Capitalexpenditure(estimated)inZARbillion.91Developmentexpenditure(estimated)ZARmillion.Thismayincludecostsforscoping,conceptphase,pre-feasibilityand(bankable)feasibilitystudyphases.92Finalinvestmentdecision(planned).93Financialcloseand/orstartofconstruction(planned).94Commercialoperationdate(planned).202JETImplementationPlan2023–2027Chapter8:GreenHydrogenFID92FC93COD94CapacityGH2FinalCO2reductionProgress20242024(MW)volumeproduct(ktCO2epa)(Ktpa)volume2026/71201681480KtpaGNH320242024202612573.5Ktpa0GNH32024202520272507.336.5Ktpa406.304380–440GNH320232024202710(pilot),1.8(pilot),19.8Ktpa100(Ph1)18(Ph1)GH22023JunAug200.0016.4036.1KtpaProjectatfeasibility/FID20242026SAFProjectreceivedQualifiedBidderStatusundertheEUH2GlobalProgramReceivedenvironmentalauthorisationsfor300MWrenewablesthusfarJETImplementationPlan2023–2027203ProjectnameProjectdescriptionDeveloperCapexDevexFinalproduct(ZAR(ZARbillion)90million)91CoegaGreenGreenammoniafromHiveHydrogen100140GNH3AmmoniaProjectREinCoegaIndustrialSouthAfricaPhase1DevelopmentZoneSouthAfricanSeveralGH2projectsAngloAmerican,22.4224GH2,fuelcellHydrogenValleytotransformofregionDSI,BambiliEnergy,(9projects)trucks,fuelcellaroundJohannesburg,Engiebuses,fuelcellMogalakwenaandsolutionforDurbanintoahydrogenheavyhaulage,valleyfuelcellsforstationaryapplicationsProjectRhynbowHeavy-dutyhydrogenAngloAmerican,0.37(partofSouthfuel-cellvehiclecorridorBambiliEnergy,(Ph1)AfricanH2Valley)betweenJohannesburgEngie,Sasol,andDurbanTotalEnergies0.7(Ph2)SaldanhaBayGreenLarge-scaleGH2Mainstream51100–150Low-carbonHydrogenProjectproductioninSaldanhaRenewablePower64700BaywithArcelorMittalrefinediron,SouthAfrica’sSaldanhaWorkssteelplantasane.g.directanchorofftakerreducedironorhotbriquettedironSaldanhaHydrogenGreendirectreducedArcelorMittalSouth4.5180HydrogenDirectReducedIronironproduction,usingAfricaDirect(DRI)renewableenergy-basedReducedIronhydrogen(DRI)EnertragGreenammoniafromREENERTRAG6535GNH3PostmasburgnearPostmastburgRenewableHydrogenpowerplantsHydrogènedeMpumalanga(24/7GreenbaseloadFrance(HDF)electricity)EnergySA95DesignandconstructionofH2refuellinginfrastructureacrosstheAnglo/DSIHydrogenValleyandHydrogenmobilitycorridor.96ForGNH3shipsintheDurban/RichardsBayhub.204JETImplementationPlan2023–2027Chapter8:GreenHydrogenFID92FC93COD94CapacityGH2FinalCO2reductionProgress20242025(MW)volumeproduct(ktCO2epa)(Ktpa)volume202812001200027tphGNH3Projects2034–2030Projects185by2030ProjectsProjectsvaryvary204595(pilot)96varyvary2025(Ph1)2024/52025/62027/8900–110060–8060–80Ktpa1400atfinal(Ph1)(Ph1)(Ph1),GH2capacity2033/4(Ph2)(ArcelorMittalSA)2025202620271561(as1200Ktpa2160input)DRI(MidrexProjectinpre-feasibilityBirdandbatmonitoringPlant)completedRE,hydrogen,and30030120KtpaammoniafacilitiesEIAapplicationswereGNH3submittedMay2023DraftEIAsubmissionOctober2023,EAanticipatedApril20241900GWhp.a.JETImplementationPlan2023–2027205ProjectnameProjectdescriptionDeveloperCapexDevexFinalproduct(ZAR(ZARbillion)90million)91EnertragIndigenZero-carbonmethanolENERTRAGe-MethanolproductionnearGqeberhaIPMmembraneElectrolyserandfuelcellIsondoPrecious0.3650CatalystselectrodeassemblycatalystsandMEAMetals(MEA)/CatalystandMEAforManufacturingelectrolyserandfuelcellsIPM/NCPHydrogenRoll-outHRSand300IsondoPrecious2.3180HRS,fuelcelltrucksandRefuelingStationsfuelcelltrucksandMetals,NCPbuses,H2purification,(HRS)deploymentbusescompression,ProjectPhoenixFuelcellmanufacturingMitochondriaEnergy4.463andstorageecosystem(250kWSystems,IDC,DBSA,systems)DTICplants85.3250kWfuelsystemforcombinedheatandpowerapplicationsCapeStackGH2productionforlongRRSInvestment0.06549.3GH2haultransportationfuelTBDGreenH2Mobility:52.3Phase1PilotGH2productionforlongRRSInvestment937.4GH2haultransportationFuelGreenH2Mobility:N7CorridorGreenH2andNH3PhelanGH2TBCGNH3productionPhelanGreenHydrogenGreenAmmoniaPre-Omnia,WKN600GNH3FeasibilityStudyWindcurrentOmniaSasolburgGreenAmmoniaHighlyefficientcatalystsSasolSA,UCT,Sasol0.04ProjectforSAFproductionGermany,Fraunhofer(project(usingGH2)IKTS,HZB,Ineratec,budget)Care-O-SeneKIT97Gridemissionsfactor.206JETImplementationPlan2023–2027Chapter8:GreenHydrogenFID92FC93COD94CapacityGH2FinalCO2reductionProgress20232024(MW)volumeproduct(ktCO2epa)20232024(Ktpa)volume18522120KtpaTermsofReferencesforthepre-feasibilityhaveMeOHbeenissuedandevaluated2025N/A6600003MnMEA10.5(basedonInprogress:Production(fromone–p.a.(9GWoneplant)startdateQ12024yearMEAelectrolysersupplyifcapacityonlyforequivalent),electrolyser1tonneuse)PGMcatalysts2025502.52.5ktpa30Designed:StartdateGH2estimatedQ32024300fuelcelltrucks/buses202320242026N/AN/A1000250100097kWfuelcellsystemspa(250MWpa)2024202520261.2160000016000002000202720282031TBDNm^3Nm^3TBC180TBDTBDTBD202420242030220085480.22ktpaGNH320252026202811518100KtpaJETImplementationPlan2023–2027207AnnexureB:ExamplesofopportunitiesandchallengesfromGH2projectscurrentlyunderdevelopmentTheCoegaGreenNH3plantselectedtheCoegaIndustrialDevelopmentZone(IDZ)siteduetotheavailabilityofkeyinfrastructure,suchasamodernport,gridavailabilityattheDedisasubstationtosupporttheimportandexportofelectricity,availabilityofsharedinfrastructuresuchaspipingonservitudes,existingtrainingcentresforworkforceskilling,andundevelopedlandtoallowforthedevelopmentofitsfacility.ThisinfrastructureavailabilityattheCoegaIDZpresentstheopportunitytonotonlydevelopaGreenNH3plant,buttoalsocreateanindustrialclusteraroundthefacilityitself.Thiscouldincludesupportingindustries,suchaselectrolysermanufacturing,waterprocessingfacilities,andREequipmentmanufacturing.ThisCoegaGH2industrialclusterwilldrivesignificantindustrialisationandsocio-economicbenefitintheEasternCape,theprovincewiththehighestunemployment,andhighlightsthebenefitsalocalGH2industrycanunlock.IsondoPreciousMetals(IPM)isdevelopingkeyfuelcellandelectrolysercomponentsthatusePGMmetals.Thesearesmall-scaleproofofconceptstudiestoestablishbeneficiationandlocalmanufacturingcapabilitiesintheGH2valuechain,aswellasestablishinginitialGH2usecasessuchashydrogenrefuellingstations(HRS)forfuelcellvehicles.Fortheseandothersmall-scaleprojectstomaterialise,grantfundingiscriticalaslong-termofftakeneededtoprovideincomecertaintytotheprojectcannotbesecuredsincethemarketisstilltoonascent–withoutgrantfundingtheseprojectscannotprogressbeyondfeasibilitystudies.However,thereislimitedclarityonwhatgrantfundingisavailableforproofofconceptandlocalmanufacturingprojects.ThisresultsinallGH2projects,includingmega-projects,competingforthesamepoolofgrantfunding.Further,SMMEsorstart-upsdevelopingsmall-scale,proofofconceptstudiesdonothavethesameresourcesaslargecorporatestomeetthegrantfundersrequirements,puttingthematadisadvantagetoaccessthegrantfunding.Afair,transparentprocessthatoutlineshowmuchgrantfundingisavailablefordifferentGH2projects(forexample,localmanufacturingcapabilities,hydrogenrefuelling,mega-GH2productionprojects,andsoon),andwhattherequirementsaretoaccessthisfundingisneeded.ThiswillallowtheSouthAfricanGH2industrytobeestablishedintheshortterm,aswellasmeetthekeylong-termtargetsofSMMEgrowthandlocalmanufacturingcapacitytodrivejobcreation.208JETImplementationPlan2023–2027Chapter8:GreenHydrogenTheon-the-groundexperienceoftheIPMprojectsalsoraiseconcernswithsecuringPGMsupplyneededforestablishinglocalfuelcellandelectrolysermanufacturing.Thisisbecausethesesmall-scaleprojectsarecompetinginaglobalcommoditymarket,whereexistingPGMofftakershavelong-termcontracts.Toovercomethis,anintegratedstrategybetweenlocalmanufacturers,PGMminers,andkeystakeholderssuchasDTIC,tosecurePGMsneedstobecreated.Finally,amisalignmentbetweenthespecialeconomiczones(SEZ)intent,andtheactualoperationoftheSEZisbeingobserved.ThismisalignmentmaypreventtheinitialobjectivetosupporttheestablishmentofalocalGH2industryfrombeingachievedandneedstobereviewed.JETImplementationPlan2023–2027209210JETImplementationPlan2023–2027Chapter9:SKILLS211PURPOSEThepurposeofthischapteroftheJETImplementationPlanisto:„outlineaplanforhowSouthAfricacanbuildamoreco-ordinatedapproachinsupportingskillsdevelopment,skillsutilisation,andskillsanticipationfortheJustEnergyTransition(JET)„outlinethecurrentcontextandstructuralchallengeswithintheskillssysteminSouthAfricatohighlightthatbuildingacoherentJETskillsresponsewillneedgoodskillsintelligence(supplyanddemand),augmentedlearningprogrammesandqualifications,clearerenergylearningpathwaysarticulatingoccupationalandeducationalprogression,functioningpublicandprivateproviders,skilledandcapableeducators,careerandstudyguidance,institutionaldevelopment,adequatefunding,andqualitymonitoringmechanisms„buildonexistingworktocatalyseinterventionsneededtoaddressJETskillsneedsintheshortterm,andthatsupportmedium-tolong-termskilltrajectories„setouthowtheJETSkillsPlanisdesignedtostrengthenexistingskillsplanningprocessesandseekseventuallytobeanchoredintothemainstreamskillssystemtargets,suchasoccupationsinhighdemand,andtheNationalSkillsMasterplanandhumanresourcedevelopment(HRD)strategy.212JETImplementationPlan2023–2027Chapter9:Skills9.1ContextThischapterspecificallyfocusesontheskillformationsystemfortheJET,forwithoutdoingso,skillsformationremainsindividualised,fragmented,sporadic,andlackingsustainabilityorlongevity.ThechapteriswrittenwhiletheMasterSkillsPlan(MSP)ofSouthAfricaisbeingdevelopedbygovernment,andthisJETSkillsPortfoliowillformpartoftheMSPinduecourse.Skillformationisnotjustanindividualisedactivity.Itisaprocessembeddedinasystemthatenablesorconstrainsit.Atasystemiclevel,skillformationmustbeunderstoodasasetofsystemsthatareshapedby,andshape,economies,institutions,andsocialrelations.Withinthecontextof‘skillformationsystems’,theword‘skill’isshorthandforexpertisethatisusedanddevelopedatwork,andacquiredthroughschools,formalvocationaleducationinstitutions,universities,shortcourses,workplace-training,labourmarketdemandfordifferenttypesofqualificationsanddifferentformsofexpertise.The‘skillformationsystem’ishowthesefittogether.Skillformation,therefore,referstoaninterconnectedsystemthatenablesskillsdevelopment.Itinvolvesanalysinghowskillsinvolvingexpertise,knowledge,andqualificationsareproducedforwork,andhowskillsdevelopmentrelatestoskillsdemand.Itrequireslookingatasetofmovingandinter-relatedpartsthatshapeandrespondtoeachother.9.2MappingtheSkillFormationSysteminSouthAfricaTheskillformationsysteminSouthAfricaincludesthedifferentinstitutionsthatoffereducationandtraining,theinstitutionsthatsupport,regulate,andco-ordinatethesystem,andtheinstitutionswhereemploymenthappens,asshowninFigure24,whichaimstohighlightthecomplexityofthesystemandthescopeofactors.Forafulldiscussionoftherolesofdifferentstakeholdersandactors,refertotheNationalSkillsDevelopmentPlan(NSDP),2030.JETImplementationPlan2023–2027213Figure24:SouthAfrica’sskillsformationsystemEmployerDSI,NBF,HDRCDHETassociationsTIA,NSAEnrolmentplanning,PQM,andtradesciencefunding,institutionalsupport,unionscouncilsregulatoryroleDELDTIC(qualificationsandcurriculum)(industrialindustrialrelations)strategyProvisionOtherkeySETAsNSFASPrivategovernmentHEIsdepartmentsNSFSkillsPrivatedevelopmentcollegesPublicHEIsprovidersPublicandOtherprivatecollegesworkplacesTownshipCommunityTVETandvillagecollegescollegeseconomyCHEProfessionalNAMB,SAQAUmalusiSAIVCETDBEschoolsbodiesIndlelaandthreestreamsQCTOEconomicplayersarebothusersandproducersofskills.Theworkplaceisbothaplaceinwhichstructuredtraining,workplaceexperience,andongoinglearningaboutworkhappen,aswellaswheredemandforexpertiseandqualificationsisshaped.Tounderstandskillssystemically,itisCh9Fig22Skillsnecessarytothinkaboutinstitutions,dynamics,andrelationships.Institutionsincludesystems,mechanisms,andrules.AsshowninFigure24,theinstitutionalterrainiscomplexandthereisamultiplicityofplayerswithdiversemandatesthatneedtobebroughttogetherforadvancingnewskillsinterventions,suchasthoserequiredfortheJET.„Fromacontextualandemploymentdrivers’perspective,therearevariouslocationswherepoliciesaremade,andtargetsareset.Thesearecloselyconnectedtodynamicswithinthepoliticaleconomy.„Fromaskillssystemplanningperspective,therearevarioussetsof‘rulesandtools’thatstakeholdersareoftenobligedtouse–suchastheOrganisingFrameworkforOccupations(OFO),WorkplaceSkillsPlan(WSP),andthestructuralrequirementsforaccreditationoutlinedintheNationalQualificationsFramework(NQF)anditslegislativeinstruments.ThelatteraregovernedandimplementedbyrequirementsofqualityassurancebodieswhofulfiltheirlegislativemandatesasoutlinedintheNQFandskillssystemlegislation.FundingbodiesforskillssuchastheNationalSkillsFund(NSF),andSectorEducationandTrainingAuthorities(SETAs)playasignificantroleinenablingskillsdevelopment.214JETImplementationPlan2023–2027Chapter9:Skills„Fromaskillsprovisionperspective,therearevarioustypesofpublicandprivateproviders,allofwhichhaveaparticularroletoplayinrelationtothetypesofskillsrequiredfortheJET(forexample,schooling,occupationallydirectedtrainingandhighereducation).TheJETiscatalysingtheneedforfundamentaleconomicchangethatisregenerativetowardsachievinggreatersustainabilityandsocialjustice.Theenvisagedenergytransitionisanambitiousoneandwillrequireacomprehensivepolicymix.Simultaneously,thiswillnecessitatetransversalengagementacrosstheeducationandtrainingsystem,assustainabilityandenergypracticesarelocatedinschooling,highereducation,andoccupationallydirectedtraining.Inthisrapidlychangingcontextcharacterisedby‘newness’andquickemergence,theeducationandtrainingsystemhasstruggledtoberesponsive.ThishascreatedalandscapeoffragmentedinterventionsthatdonotcohereandmaximiseimpactforJETimplementation.9.2.1ChallengeswithintheSkillsSectorthatneedtobeConsideredasPotentialBarrierstotheTransitionThecomplexskillssystem,togetherwiththerulesandtoolsusedtounderstandcurrentandfutureskillsneeds,representnumerouscontradictionsandlock-insandpresentbarrierstothechangethatisessentialforthetransition.ThereareseveralchallengeswithintheskillssectorthatmustbeovercomeforSouthAfricatodeliverontheJET.Theseinclude:„Lackofcentralised,coherentlyorganisedco-ordinationforskillsdevelopmentfortheJET:DespitetheextensiveandcomplexGreen/sustainabledevelopmentmandateinpolicy,todatenoadequateco-ordinationmechanismhasbeenestablishedforthenationalplanninganddevelopmentofsustainabilityskillsinSouthAfrica.Atpost-schoolingeducationtraining(PSET)level,thereislimitedcoherentanalysisandco-ordinationoftheskillsneedslinkedtosustainability.ForJETspecifically,policy,programmes,andtrainingexistinpocketsacrossthecountrybutarenotco-ordinatedtoworktogether,andsotheinformationfromdifferentsmallstudiesdoesnotprovideacoherentnationalpicture.Atalllevelsofgovernment,non-governmentalorganisations(NGOs),unionsandeducationcentresareallworkingontheirownGreenskillsprogrammesleadingtoaproliferationofGreenjobsanalysesandhumancapitaldevelopmentstrategies,manyofwhichareoverlappingand/or‘doublecounting.’Theseareyettobeco-ordinatedtoworktogetherinabroadercontextwithinthewidereconomicdevelopmentstrategyandpolicyframework.Thus,wehaveaparadoxofsupportforsustainabilityskillsseeminglyappearingeverywherebutbeingpartlyinvisibleinthenationalskillslandscape.„NocoherentnationalpictureofsupplyanddemandofJETskills:Thefragmentationhasresultedinmanysmallstudiesonskillssupplyanddemand(forexample,therearecurrentlyatleastfivedifferentstudiesonskillsforthehydrogeneconomy),whicharemethodologicallydifferent,oftenfromapositionalinterest,anddonotcohere.Itis,therefore,notpossibletoaggregateinformationordatatobuildaclearnationalpictureofsupplyanddemandofJETJETImplementationPlan2023–2027215skills.Thesemultiplesmallstudiesleadtoduplicationsofeffortleadingtowastefuluseofresources,time,andexpertise,andplanninganomalies.Skillsplanningfromthesesmallstudieswillalsocreatefutureplanninginconsistencies.„Skillsanticipationsystemsandprocesses:Therearemanylimitationswithcurrentskillsanticipationsystems.Therulesandtoolsrelyoninformationfromemployerstoindicatelabourmarketneedsforthefuture.However,employersoftenstruggletoanalysetheircurrentskillsneeds,letalonefutureones.Mostresearchfindsthattheyspecifygenericskills.Sometimeswhatemployersperceiveasaskillsgapisaworkorganisationproblem.Evenwhereemployershaveclearinsightintothegapsintheirworkforceandtheexpertiseneededbypeopleinthosekindsofjobs,thisexpertiseisseldomreducibletoasetoftasks,andnevergivesstraightforwardinsightintowhateducationisthereforerequired,otherthanforveryspecific,veryshort-termskillsneeds.ThenationalLabourMarketIntelligence(LMI)programmehasbeguntodevelopsomeusefulframeworksforskillsanticipation.However,thesearenotyettranslatedsufficientlyintomainstreamimplementation.„Conflationoftimehorizons:Thereisdisjunctionintermsofthesystemsforanalysingskillsgaps,whichtendtobefocusedoncurrentandemergingskillsgaps,andthesystemsforeducationprovisionplanning,whichcanonlybeforlong-termplanning.Therefore,theymisalign,withtheironiceffectofkeepingtheskillsdevelopmentforlonger-termJETcaughtinashort-term‘crisis’trapandshort-termism.„Factorsshapingskillformationsystemsatanationallevel:Thereisaneedforbetterinsightintothefactorsshapingskillformationsystemsatanationallevel–theobjectofanalysishereiseducationandtrainingatasystemiclevel,includingworkplace-basedandinformallearning,anditsinteractionwitheconomicandsocialinstitutions.Foundationbuildingintheschoolingandtechnicalandvocationaleducationandtraining(TVET)systemsarealsopartofthislongerterm,moresustainableorientationtoJET.Especiallyurgentissubstantiveattentiontotheskillsoflecturers,trainers,andcurriculumdeveloperstolaunchandsupporthigh-qualitytrainingfortheJETinTVETs,specialisedinstitutes,andinthegeneraleducationandtrainingsector,includingpublicandworkplace-basededucationandtrainingsettings.ResearchshowsthatcurriculumdevelopmentforJETskillstendstobeverygeneralandlacksadequatebalanceoftheoryandpractice,andthisrelatesdirectlytolecturingandcurriculumdevelopmentskillsforJETprovisioning.Thelackofqualitytrainingandcurriculumdesignaffectsthequalityoftrainingandskillsdevelopmentdirectly.„Disconnectbetweentraininginstitutionsandcommunities:Thereisadisconnectbetweentraininginstitutionsandthespecificneedsoflocalcommunitiesinthecontextofcleanenergy.Tailoringtrainingprogrammestoaddresstheuniquerequirementsofdifferentcommunitiesandindustriesisessential,butoftenlacking.Additionally,accesstoqualityskillsdevelopmentremainsunequalacrossregions,withruralandmarginalisedcommunitieshavinglimitedopportunities.Addressingthesechallengesrequiresaconcertedefforttobridgethegapbetweentraininginstitutionsandcommunities,ensuringthatskillsdevelopmentisinclusive,relevant,andaccessibletoall,therebyfosteringaJETinSouthAfrica.216JETImplementationPlan2023–2027Chapter9:Skills9.2.2UnderstandingtheRootCausesTheskillssystemresponsetotheenergytransitionhasbeeninadequate,adhoc,fragmented,reactive,andinefficient.Therefore,thesearesomeoftherootcauses(ofthecoreproblem):„Newknowledgeandskillsareneeded,andthesystemisnotabletoadjustquicklyenough:ƒThesystemisreactiveinrespondingtowhatisemerging.„SkillsneededforJETarenotclear:ƒPoorskillsplanning,especiallyinthecontextwhereneedsarerapidlychangingƒSkillsneededforthefutureareuncertainƒToolsusedtoanticipateskillsarenoteffectiveforuncertainfuturemarkets.„Fragmentedandadhoceducationalresponsesintermsofdeliveryofrequiredskills:ƒNonationalco-ordinationofJETskillsƒLinksbetweenemployersandeducationalinstitutionsarenotoptimal.„SomeTVETsaresub-optimalandstrugglingtorespondtowhatisrequiredforJET:ƒPoorlinktoemployersconstrainseffectiveapprenticeships,internships,andwork-basedopportunitiesforTVETlearnersƒLecturerJETknowledgeandeducationalresourcesrequiredneedsstrengthening,asdoescurriculumdevelopmentandpedagogyƒPedagogythatcanbringtheoryandpracticetogetherbetterƒLearnerliteracylevelsmaynotbeattherequiredstandardƒWeakbasiceducationsystemandfoundationalskillsoutdated(notkeepingpacewithJETdirectionality).„Educationalinstitutionsdisconnectedfromcommunities,communitycolleges,andadultlearningcentres,andthereforemaystruggletorespondtolocalneeds„Someuniversitycurriculaarenotupdatedrapidlyenoughtoreflectnewneedsandspecialisms:ƒNewneedsareemergingrapidly,andittakestimeforuniversitiestochangecurriculaƒInvestmentinnewresearchtoguidenewknowledgeandpracticeforJETislacking.„InadequatepipelineofskillsinJETareas:ƒInsufficientJETknowledgeatbasiceducationlevel.JETImplementationPlan2023–20272179.2.3StakeholderPerspectivesInconsultationsconductedbythePresidentialClimateCommission(PCC)onthe2022JETIP,stakeholdersagreedthatskillsdevelopmentwaspivotalbutthattheapproachoutlinedintheJETIPwasinsufficient,unclear,andsignificantlyunderfunded.Therewasastrongargumentforamorecomprehensiveunderstandingofhowitislinkedtodifferentelementsofthevaluechain,howitwillbeactualisedacrossthedifferentstakeholdergroups(howitwillinvolvecommunities,youth,andwomen),andhowitwillbeco-ordinatedatdifferentlevelsandtiers.TheapproachadoptedfortheJETImplementationPlanisthereforetobuildontheworkthathasbeendone,avoidingduplication,andidentifyingshort-termwinswhilesimultaneouslyaddressingthelonger-termstructuralissues.Interventionshavebeenunpackedinmoredepthtoallowfundingtobeallocatedmoreaccuratelyandforperformancemeasurestobeestablished.Severalstakeholderswereinterviewedaspartoftheprocesstodeterminespecificneedsandimpactareas,aswellastoaddresstheconcernsthatwerevoiced.218JETImplementationPlan2023–2027Chapter9:Skills9.3JETSkillsImplementationPlan9.3.1GoalTheoverallvisionisthattheJETskillsimplementationplanwillcontributetobuildingawell-co-ordinated,responsive,resourced,andeffectivelyfunctioningskillsecosystem.Thisskillsecosystemwillinvolvecommunities,business,government,andotherinstitutionstoensurethatSouthAfricahasanemployable,skilled,andcapableworkforcetoimplementtheJETandsupporteconomicgrowthinthecorevaluechains.9.3.2AnApproachtoDeliveranEffectiveSkillsImplementationPlanSkillsarepositionedascriticalenablersforthetransitionoftheenergysector.TheJETIPidentifiedthefollowingthreedimensionsofskillsdevelopmentascore,eachinvolvingmulti-levelinterventions:„Reskillingandupskillingofadultworkers:Thiswillrequirerobustrecognitionofpriorlearning(RPL)processes,anddiversifiedlabourmarketinformationthatexaminesentryandintermediatelevelpathways.Italsorequiresproactiveplanningforreskilling,whichisnotjustashort-termtechnicalexercise(forexample,viashortcourses),butalsoanidentity,psycho-social,andcommunityformationprocess(forexample,viaskillsecosystemintegrationintosocial-economicandsocial-ecologicalsystems,andnewformsofworkinalreadywork-scarcecontexts).„Skillsanticipatorysystemsandprocessesthatsupportfuturelabourforceneeds:Thiswillrequirestrengtheninglabourmarketintelligencesystemsandtoolstobemoreresponsivetotheneedsofindustries,communities,youth,women,andvulnerablegroups,andtoadoptmoreclearlydifferentiatedlensestoshort-termism(thatis,crisisskillsresponsesinimmediatelyneededvaluechainsandoccupations),andmedium-termtrajectories.„Supportingfoundationalskills:Tosupporttheadaptivecapacityofthebroaderworkforce,andtosupporteducatorswithinschoolingandpost-schooleducation(trainingoftrainers,curriculumdevelopment,andlearningprogrammemodeldevelopment)todevelopfoundationalknowledge,skills,valuesandapproachestowork,learningandlivingwithintheJET,andthediversityoftypesoftrainingthatwillbeneeded(forexample,vocational,workplace,specialisttechnical,andreskilling).Thiscallsforacross-cuttingskillsresponsethatbridgestheskillssystem,theskillsplanningprocesses,andthetransitioningofJETsectorswithshort-,medium-andlonger-termplanningapproaches.JETImplementationPlan2023–2027219Furthermore,itwillrequirebothnationallevelco-ordinationandstrategicsupportandlocallevelalignmenttoemerging,andattimesrapidlychanging,needsanddemandsforskillsand/orupskillingorreskilling.Importantly,framingskillssystemsinamulti-dimensionalwaygoesbeyondthetraditionalapproachofseeingskillssystemsasameansofdeliveringskills.Italsoconsiderstheroleofaskillssysteminensuringasmoothtransitionfromeducationtoworkandanappropriateskillsmatchattheworkplaceintermsofbothskillssupplyanditsinteractionwithdemand.Anapproachisusedtocharacteriseskillssystemsbasedonthreekeyaspects,allconceivedwithinaskillformationsystem(seeFigure25).ResourcingthethreeidentifiedcorevaluechainsfortheJET(RE,GreenHydrogen(GH2),andelectricvehicles(EVs))willneedtoconsiderallthreeaspects.Coherentskillsanticipation,wherelabourmarketactorsidentifyandpreparetomeetfutureskillsneeds,willhelptoavoidpotentialgapsbetweenskillsdemandandsupply.Skillsdevelopment,whichincludestraining,educationactivities,andskillsutilisation,alsoincludeshowskillsareusedinworkplacesandhowemployersplanandusetheskillsofemployees.Figure25:AspectsofskillsJETskillsanticipation13Aspects1.CoherentskillsanticipationwhereofskillslabourmarketactorsidentifyandJETskillspreparetomeetfutureskillsneedswillutilisation2helptoavoidpotentialgapsbetweenskillsdemandandsupplyJETskillsdevelopment2.Skillsdevelopment,whichincludestrainingandeducationactivities3.SkillsutilisationincludeshowskillsareusedinworkplacesandhowemployersplanandusetheskillsofemployeesCh9Fig23Skills220JETImplementationPlan2023–2027Chapter9:Skills9.3.3PrinciplestoGuidetheDesignofSkillsInterventionsThefocuswillbeonthefollowinginterventions:„ImplementableintheshorttomediumtermtofitwithinthescopeoftheJETSkillsInvestmentPlan,butthatareframedwithintheongoingdemandforlonger-termsustainabledevelopmentoftheenergysector„Connectingtoexistinginitiativesthatcanbeupscaledorprovideaplatformforfuturecollaborationandco-creationofsolutions(hereimprovedco-ordinationandsystemicapproacheswillbeencouraged)„Impactinghighnumbersofjobs„Geographicallydisparateandwithindifferentcommunities(stakeholdergroups)butafocusonthoseareasmostimpacted„Focusingonastreamofwork(notasinglejob)whereoccupationalprogressioncanoccur„Stronglyfocusedonwomenandyouth„Addressingstructuralchallengesthatareneededtounlockfutureenergyinvestmenttranches.Thetypesofskillinterventionswillalsoneedtobeplannedfromaclearideaonoccupationaldifferentiation,suchasthefollowing:„Isthereaneedfornewoccupations,oraspecialisationinexistingoccupations,withnoexistingtraininginSouthAfrica,andthusneedingnewqualifications?„Willthejobchangesrequirecomponentsofcurriculaneededtoberedoneoraugmented?„ArethereskillsetswithashortageofexistingtraininginSouthAfricathatwillrequireashortcourse,and/ormoresustainedupskillingand/orreskillingprogrammes?Notethatreskillingismorethana‘quickfix’ortechnicalprocess,especiallyifreskillinginvolvesasignificantchangeinworktype,and/orworkidentitiesandcommunities.„Willtherebechangingprocesses/technologyatworkthatwillrequireon-the-jobtraining–workplace-basedtrainingandworkplacetrainers?„Whatarethefoundationalskillsimplicationsoftheabove?JETImplementationPlan2023–20272219.3.4AssumptionsFortheframeworktoaddressanyrisks,itisimportanttoidentifyassumptionsbeingmadewhendevelopingandimplementinginterventions.Thesearetheassumptionsthatarebeingmade:„Thereissufficientfundingtoimplementtheinterventionsandassociatedactivities.„TheJETIPwillnotchangeoverthefive-yearperiod,andshoulditchange,areviewoftheinterventionsmayberequired.„Relevantgovernmentpoliciesandstrategiesforthepowersector,GH2,andEVswillbeimplementedasplanned.„FundingandsupportwillbereleasedbyDepartmentofTrade,IndustryandCompetition(DTIC)tosupportskillsdevelopmentzones(SDZs)andskillsecosystems.„ThereiscontinuityofconstructionofREinvestments.„Thecountrycanretainskillsandskillsarenotlosttoemigration.„Economicgrowthisoccurring,andhighinvestmentlevelswillsupportdemand.222JETImplementationPlan2023–2027Chapter9:Skills9.3.5OverviewofDesiredOutcomesandImpactsTheTheoryofChangewasusedtodevelopanactionableandmeasurableimplementationplan.TheJETSkillsImplementationPlanwasdesignedalongfivedimensionsfromtheTheoryofChange.TheTheoryofChangeissummarisedinnarrativeformandpresentedinTable28.TheJETSkillsImplementationPlanisdesignedasaJETSkillsPlan,butachievingthisambitious,long-termvisionrequiresasystematicmainstreamingoftheseJETprioritiesintobroadstrategiesoverseeingskillsdevelopmentinSouthAfrica.Improvingskillsiskeytomeetingskillsneedsandforcommunitiestoadapt.Forthistohappen,theskillssystemmustbetransformed,andcommunicationandcollaborationimproved.Thekeyimpactsofthisportfolioarethatthereareeffectiveskillformationsystemssupportingthethreecorevaluechains(NewEnergyVehicles(NEVs),GreenHydrogen(GH2),RE,andtransmission)(I01),andthesehavecontributedtoincreasedemploymentandstrengthenedlivelihoodsdrawingfromskillsrelatedtotheJET(I02)SkillsPlan(ST01).TheJETSkillsPlanwillfeedintotheNationalSkillsMasterplanasdevelopedbytheDepartmentofHigherEducationandTraining(DHET).TheSDZsneedtobeoperatingandenablinglocallearningnetworkswithemployers,educationalinstitutions,andcommunitiesacrossthethreevaluechains(ST02).TVETcollegeshaveakeyroleandmustbebetterabletolinkstudentswithworkplaces(ST03),aswellaswithSETAs(ST09).Weneedtoseeimprovedlevelsofskilledcommunitymembersemerging(ST04),aswellasskillsavailabletothelabourmarketacrossthethreepriorityvaluechains(ST05).Toenablethis,theremustbeagoodunderstandingandcommunicationofemergingskillsneeds/labourmarketinformation(ST06).NationalandprovincialgovernmentandotherstakeholdersneedtounderstandJETandJETprioritiessothattheycanapplyJETintheirwork(ST07)andhaveanenhancedawarenessofJETasanimportantdevelopmentpriorityforthecountry(ST08).JETknowledgemustbeincludedinteachertrainingatuniversitieswithcurriculamodifiedtoincludeJET(ST010)sothatfoundationalskillsarebuilt.JETImplementationPlan2023–2027223Table28:TheoryofChangeInterventionOutputJETSkillsEcosystemandJETSkillsForumJETSkillsEcosystemestablishedfocusingonaco-ordinatedapproachtoskillsanticipation,development,andutilisationNationalJETskillsresearchrepositoryestablished,andnewresearchcommissionedJETSDZsfocusedonthreecorevalueProposalforJETSDZstobeestablishedandresourcedforthechainsfocusedonappliedskillsanticipation,threevaluechainscompleteddevelopment,andutilisationforthethreevaluechains(NEV,GH2,RE,andtransmission)LocalSDZactorsmappedandleadeducationalinstitutionsareappointedTechnicalcapacityanddevelopmentplansforSDZstosupportthethreecorevaluechainsdevelopedLocalskillsdevelopmentplanagreedwithactorsCommunitydevelopmentplanwithresourcerequirementsidentifiedJETskillsdevelopmentneedsassessmentsforExpandedsituationalanalysisacrossthreecorevaluechainsthreecorevaluechainscompletedKeylocaltrainingprioritiesestablishedValuechainskillssupplyanddemandbaselinescompletedJETskillsplanningandsupportforCapacityneedsassessmentforgovernmentcompletedgovernmentandkeygovernmentinstitutionsCapacitydevelopmentandadvocacyplanforgovernmentdevelopedJETcapacitybuildingprogrammerunwithSETAsFoundationalskillsdevelopmentsupporttoJETteachereducationcurriculumdevelopmentmaterialsteachersandeducatorsdevelopedforallteachertraining/TVETinstitutionsviatheFUNDISAforChangenationalProfessionalLearningCommunity(PLC)224JETImplementationPlan2023–2027Chapter9:SkillsShort-termoutcomeMedium-termoutcomeImpactJETSkillsEcosystemandtheNationalJETEffectiveco-ordinationandcollaborationofallSkillsAdvisoryForumsupportingco-stakeholderstorespondtochangingskillsneedsordinateddevelopmentandimplementationoftheJETSkillsPlanSkillssystemiseffectivelyadjustingandrespondingtochangingJETskillsneedsEffectiveskillsformationsystemssupportingthethreecorevaluechains(NEV,GH2,RE,andtransmission)SDZsoperatingandenablinglocallearningWomenandyouthparticipationinJETmarketIncreasedemploymentandstrengthenedlivelihoodsdrawingfromskillsrelatedtotheJETnetworkswithemployers,educationalactivityinstitutions,andcommunitiesSDZsoperatingeffectivelysupportingskillsdevelopment,communityliaison,andlinksbetweeninstitutionsTVETcollegesarebetterabletolinkSystemisadjustingandrespondingtochangingJETstudentswithworkplacesskillsneedsImprovedlevelsofskilledcommunityMoreresilientcommunities,improvedcommunitymembersliaisonbyeducationcommunityandbusinessSkillssystemadjustedtonewdemandSkillsacrossthreecorevaluechainsavailabletothemarketGoodunderstandingofemergingskillsneeds/labourmarketinformationNational/provincialgovernmentandotherNationalpolicyandstrategyalignedandco-stakeholdersordinatedEnhancedawarenessofJETasanimportantdevelopmentpriorityforthecountrysothattheycanapplyJETintheirworkSETAsabletomakethebusinesscasewithJETprioritiesincorporatedintosectorskillsplansemployersandbetterplaytheirroleasintermediariesJETknowledgeincludedinteachertrainingTeachersareincludingJETintotheirlessonatuniversitiesandcurriculamodifiedtoplanningandteachingincludeJETJETImplementationPlan2023–20272259.4InterventionsandOutputsAsetofclusteredflagshipinterventionshavebeenidentifiedthatmaptheapproachoutlinedinFigure26tosupporttheJETandhaveacatalyticimpactonskillsandskillssystemsingeneral.Itmustbenotedthatalthoughtheseprojectswereidentifiedasprioritieswithbroadercatalyticimplications,additionalinterventionsarealsorequiredtoaddressthebroaderchallengesaroundskillsdevelopmentandothersmalleropportunitieswithinJETactivitiesandtheJETIP.9.4.1FlagshipIntervention1:EstablishmentofaThree-TierJETSkillsEcosystemThisinterventionistheformationofanationalskillsco-ordinatingstructuretocatalyseandco-ordinateJETrelatedskillsactivities.TherearemanysmallJETactivitiesthatneedtobealignedandco-ordinatedtoincreaseimpactandefficiency,ensuretheecosystemflowsareinplace,andthatsupplyanddemandarematched.TheJETSkillsEcosystemwillalsoco-ordinateresearch,occupationalinformation,anddata,forexample,developanonlineJEToccupationalhandbook/platformthatcanlinkdifferentdemandstudies,connectdifferentsegmentsofoccupationaldemandinformation,improvelabourmarketintelligence,andindicatetheskillsgapsmoreclearly.ThiswouldbeausefulquickwinandwillhelptoestablishcohesionintheJETsectorandcaneventuallybeanchoredwithintheOFOsandtheNationalOccupationalPathwaysFramework(NOPF).Thethreetiersoftheecosystemwilllinkmacro-andmicro-JETskillsactivityandwillworkatmainstreamingJETprioritiesintothepost-schoolsystem.ThecompletestructurewilllinktoandworkwiththeDHETNationalSkillsMasterplanandstrengthentheskillstoolsusedwithinthesystem.Thethree-tierskillsecosystemwillbeanationalco-ordinatingstructure,andwillservetoconnectlevelsofwork,bothbetweentheSDZsandnationallyacrossthecountry.Tierone:JETDesk:TheJETDeskisformedattheHumanResourceDevelopmentCouncil(HRDC)ofSouthAfricawithintheDHET,withtechnicalinputfromtheDTIC,theDepartmentofScienceandInnovation(DSI),aswellasProjectManagementUnits(PMUs),andthePCC.TheJETDeskwillneedtoensurethatitisabletoworkacrossbranchesoftheDHET,withstakeholders(labour,business,andcommunities)andhavestrongmobilisingpotential.FivetechnicalpersonswillbeappointedtodrivetheimplementationoftheJETplan:„AchieftechnicaladvisorwhowillprovideoverallinsightandmanagementofJETactivities,andalsoensurethattheJETDeskisconnectedandanchoredincoreskillsplanningprocesses226JETImplementationPlan2023–2027Chapter9:Skills„Threetechnicalofficers,eachofwhomwillbelinkedtoacorevaluechainandwhowillbeconnectorsbetweentheSDZs,nationalJETwork,andthenationalJETDesk„Apersonresponsibleforfinanceandadministration.TheJETDeskwillbesupportedbyahighereducationinstitution(HEI)consortiumthatwilladviseandprovidesupportintermsofdevelopingresearchcapacityinthecountry.TheJETDeskwilldothefollowing:„MonitordeliveryoftheJETSkillsImplementationPlanacrossallworkstreams,ensuringkeyrole-playerparticipation(DHET,DTIC)„Setupthenationalplatformsfordataandresearchco-ordination„ProvideprogressreportstoJETPMUinthePresidencyfortheJETGovernmentSteeringCommitteeandJETInter-MinisterialCommitteereviews„ManagetheJETSkillsForum„EstablishalinktotheSDZsinprovinces.Tiertwo:NationalJETSkillsAdvisoryForum:ThiswillfacilitatebroaderengagementwithHEIs,labour,business,anddevelopmentagencies.ThisforumwillservetoconnectthedifferentactorsintheJETSkillsEcosystem,facilitatemoreeffectivecommunicationandco-ordinateJETactivity,andallowsharingofwork,researchandtools,aggregatedata,andskillsinformation.ItwillfunctionasasinglepointofcontactforpublicandprivatepartiesworkingonJETskillsinvestments,supportnationaltaskteamandworkstreamstoensurealignment,integration,andvisibility,mobilisefundingfortheSDZsandpartners,conveneworkinggroupstoidentifychallenges,andaccesssupportneededforworkstreamsintheSDZs.TheforumwillalsobetheplatformtoconnectworkinSDZswithJETworknationally.Tierthree:ThreeSkillsDevelopmentZones(functioningasalearningnetwork):Thesezoneswillbeestablishedaroundeachcorevaluechain(RE,GH2,andEVs).TheSDZsareconceptualisedasalocallearningnetworkthatwillbringtogetherlocalpartnerswithanaimtosupportlocalisationandlocaleconomicdevelopment.TheSDZswillbeframedaroundkeylocalanchoreducationalinstitutions(whichcouldbeaTVETorcentreofspecialisation)andwillbesitesoflocalimplementation,catalyticinterventions,andpartnershipswithbusinessandeducationalinstitutions(SDZsarediscussedinIntervention2and3).JETImplementationPlan2023–2027227Figure26:JETSkillsEcosystem:Co-ordinatedapproachtoJETskillsdevelopmentThreetierJETskillsecosystemTechnicalsupportandJETdeskinHRDC/DHETPerformanceprogressmonitoringoversight▪ChiefTechnicalAdvisorPCCandPMU▪3xTechnicalOicers(1perSDZ)throughtheJETDGForumSetupwithsupportfromDTICandDSI/DHETandaHEIconsortiumNationalJETSkillsAdvisoryForumRepresentativesfromgovernment/privatesector/labour/HEIs/TVET/civilsocietyAdvisorygroupsResearchco-ordinationLocalandinternationalsupportAdhocinputsThreeskillsdevelopmentzonesRenewableenergiesandGreenhydrogenElectricvehiclestransmissionUnlockeconomicopportunities,enableandfacilitategrowthtodrivelocalisationCh9Fig24Skills228JETImplementationPlan2023–2027Chapter9:SkillsTable29:Activitiesneededtoestablishthethree-tierJETskillsecosystemActivitiesOutputsLead&keypartnersEstablishandresourcetheJETDesk(includingJETSkillsEcosystemForumLead:technicalspecialists),tospearheadJETskillsestablishedplanningandco-ordinationHRDC,DHETOnlineoccupationalintelligenceEstablishanationalJETSkillsAdvisoryForum–platform/handbooktoimproveKeypartners:comprisinggovernment,highereducationoccupationalinformationandskillsinstitutions,developmentagencies,civilsociety,intelligenceDirectorGeneralandbusiness(DG)Forum,JETDesk,SETAs,DevelopmentofanonlineJEToccupationandHEIs,Business,skillsoccupational‘handbook’/platformtoLabour,Fundingstandardiseandalignskillswithoccupationalagenciesdemandinformation;improvelabourmarketintelligenceandhelpwithplanningskillsgapanalysisEstablishanationalresearchandco-ordinationNationalJETskillsonlineresearchLead:platformthatwillaggregatedataandcommissionplatformestablished,andresearchrequiredresearch,e.g.:commissionedHRDC,DHETƒSituationalanalysistoidentifycurrentKeypartners:provisioning,currentworkforce,funding,andJETskillsinterventions(e.g.aJETsectorSAQA,QualitystocktakeofwhoworksinthesectorandwhatCouncilforTrades&ishappening)Occupations(QCTO)ƒSetupskillssupplyanddemandtoolsthatdifferentorganisationscanuseƒDevelopmentofrobust,dynamicrecognitionofpriorlearning(RPL)mechanismsthatarenotinstitutionallybasedCatalyticimpact(Duration:2024–2029)RolesandresponsibilitiesThistypeofco-ordinatingstructurewillbeHRDC/DHETwillberesponsibleforestablishingandcatalyticandwillbenefittheentirePSETsystem,resourcingaJETDesk(five-yeartenurewithanoptiontoaswellasindustryextendifrequired)andthefunctionalmanagementoftheEcosystembutreportingintotheDGForumonJETonTheonlineoccupationalhandbookwillhelptoperformanceandstrategicalignmentcollectmorecoherentoccupationaldata,soitcanbeaggregatedandprovideclearerpicturesofTheJETSkillsEcosystemwillberesponsibleforco-demandordinationwiththeNationalForumandtheSDZsTheRPLprocesswillbenefitallsectorsandTheforumwillco-ordinateandalignresearch,data,supportdecisionsforreskilling,especiallythosedemandandsupplyanalysesandlabourmarketalsotransitioninginformationlinkedtoJET,andcommissionnewcurrentandfuturelabourmarketstudieseitherthroughtheJETSkillsEcosystemorSDZsRelevantHEIswillworkwiththeJETSkillsEcosystemtoundertakesituationalanalysisandoccupationalatlasJETImplementationPlan2023–20272299.4.2FlagshipIntervention2:EstablishSkillsDevelopmentZones(LocalLearningNetworks)FocusedonThreeCoreValueChainsTocatalyse,innovateandpromoteinvestment,weneedtoestablishandresourcethreeSDZs.Thesewillcomprisecentresofspecialisationatanchoreducationalinstitutions,butwithinalearningnetworkforgreateralignmentofskillssupplyandworkplacedemandinthreecorevaluechains.TheSDZswillbeestablishedinMpumalanga(REandTx),EasternCape(EVs)andNorthernCape(GH2)andwilldrivelocalcommunityprojectsthatfosterlocaleconomicdevelopment,aswellasskillsdevelopmentinandbetweencorevaluechainsacrossthecountry.Figure27outlinesthekeyroletheywillplayineach,spearheadinglocalskillsrelationshipsandfacilitatingmoreeffectiveskillsdevelopmentandutilisation.TheSDZwillfeaturethefollowing:„Anchoreducationalinstitutions(forexample,acentreofspecialisationoraTVETcollegefocusedonthecorevaluechains)„Linksbetweentheseanchorcentresofspecialisationtocommunitycollegesoradultlearningcentres„Linkswithlocalrelatedbusinesses„Linkstolocalcommunityorganisationstofacilitatecommunitybasedandyouthstructures„Partnersworkingtogethertodeveloplocaldemandpictures,identifyjobsatrisk,andcatalyselocalskillsdevelopment.230JETImplementationPlan2023–2027Chapter9:SkillsFigure27:SkillsDevelopmentZonesroleTheSDZwillfeature:energyvehicles,greenhydrogAnchoreducationalinstitutionsLinksbetweentheseanchor(e.g.acentreofspecialisationcentresofspecialisationtoinnewen,ancommunitycollegeoradultoraTVETcollegedfocusedontheportEstablishlearningrelearningcentrescorevaluechains)networksbetweenenergynationallyablenewintoConnectingStrengtheningskieducationprovidersLinkswithlocalllssupandbusinessrelatedignmentacbusinessestivitiesBuildlocalThreeskillsPromoteanchoreducationaldevelopmentzonesparticipationoflocalindustriesandinstitutions,e.g.businessinskilsTVETanddevelopmentcommunitycollegesRenewableGreenenergiesandHydrogentransmissionImplementationElectricMobiliseofskillsplanforvehiclescommunitysupportoflocalcorevalueskillsdevelopmentchainsPartnersworkingnationdalLinkstolocaltogethertodeveloplocalnalanorkademandpictureandidentifydprovincialofwcommunityorganisationsjobsatriskandcatalyselocalprogrammestofacilitatecommunity-skillsdevelopmentbasedandyouthstructuresCh9Fig25SkillsJETImplementationPlan2023–2027231Table30:ActivitiesneededtoestablishSDZsActivitiesOutputsLeadKeypartnersTheJETSkillsAdvisoryForumfacilitatedbytheProposalforJETSDZsHRDC/DHETDGsJETDesktoestablishandresourcetheSDZsastobeestablishedandJETDeskJETForumspecialisedlocalskillslearningnetworksresourcedforthethreePCCcorevaluechainsPMUcompletedFundersSETAsIdentifyleadfundinginstitutions(potentialSETAs)PlanforeachSDZwithSDZleadTVETsandanchoreducationalinstitutions(TVETorlocalkeypartnerseducationalHEIscentreofspecialisation),andpotentiallinkstoinstitutionBusinessothereducationalinstitutions,e.g.adultlearningcommunities,centres,communitycollegesSAQAQCTOProcurestudiestomaplocalskillsecosystemTechnicalcapacity,SDZleadCHEactorsandidentifyskillsgapslinkedtoeachdevelopmentplansforeducationalvaluechainincontext(supply,demand,andSDZstosupporttheinstitutiontransitioning)threecorevaluechainsdevelopedWithineachcorevaluechainbuildonworkdoneandestablishlocaldemand,andlinktonationaldemandpictureIneachSDZ,establishjobsatrisk,developaskillsplanforpersonsimpactedstartingwithaRPLanalysisofwhatpeopleknowandwhatexperiencetheyhaveEstablishlearningnetworks–localeducationalinstitutionsandbusinesstofacilitatebetterlinksforWorkIntegratedLearning(WIL)/Work-basedLearning(WBL)apprenticeshipsWorkwithSETAs,QCTO,andSAQAtofast-trackdevelopmentofnewqualificationsandcourses,and/orrecurriculateasrequiredTargetedcapacitybuildingofTVETsandcommunitycolleges(lecturercapacity)linkedtoidentifiedoccupationalprogrammesDrivecommunityandlocalbusinessCommunitydevelopmentSDZleaddevelopmentthroughcommunityeducation,reskilling,andupskillingplanwithresourceinstitutionsrequirementsidentified232JETImplementationPlan2023–2027Chapter9:SkillsCatalyticimpactRolesandresponsibilitiesDurationTheSDZscanestablishstrongerlinksbetweenTheJETSkillsSecretariat,underthe2024–2029educationinstitutionsandbusinessatlocallevelsleadershipoftheJETDesk,establishedinandpromotelocaleconomicdevelopmenttheHDRCfortheJETSkillsEcosystemwillberesponsibleforestablishingtheSDZsSDZwillalsoprovideaplatformforpartnersandfunctionallymanagingthemtoconsolidateinputs,supportcentresofspecialisation,andgrowasolidlocalnetworkthatTheSDZwillberesponsibleforrolling-outisconnectedtothenationalecosystemthedefinedinterventionsandactivitiesandestablishingpartnershipsand/orcontractingwithappropriatebodiestoimplementtheplansEmployersandcommunitieswillberesponsibleforprovidingdataandengagingwiththeSDZtoguidetheworkSETAswillberesponsibleforqualificationaccreditationandfundingfutureprogrammesasappropriate9.4.3FlagshipIntervention3:JETSkillsNeedsAssessmentsforThreeCoreValueChainsThisinitiativewouldfurtherbuildonworkdonetoconsolidateenergyskillsworkthathasbeenconductedacrossthecountryandexpandittoincludeallthreecorevaluechainsintheirentirety.Thisisacriticalsteptoensurethatacomprehensiveskillsplanisidentifiedandimplementedtoensuretherequiredskillsareinplacenationally.Thereareskillsimplicationslinkedtoallthreeprioritysectors’supplyanddemand,forwhichallneedtobeplanned.Electricitysector:AsthecountrymakesashifttoincreasedRE,askilledworkforceisnecessarytobuild,operate,andmaintainthenewrenewabletechnologiesefficiently.Thiscreatesemploymentopportunitiesandreducesinequality,butonlyifthereisaworkforcewiththenecessaryskillstofillthesenewroles.Theneedtofirstunderstandtheareasofdemand,thenenhancereskillingandupskillingeffortsfortheelectricitysectortransitioniscritical,asaskilledworkforceiscrucialforensuringthatthebenefitsofthetransitionareequitablydistributed,preventingjoblossesinthetraditionalenergysectorwhilstprovidingnewopportunities.Potentialquickwins:„SupportforGrootvlei,theHendrinaPowerStationTrainingCentre,andtheartisantrainingprogrammeatEskom.ThereisanexistingcentreatKomati,whichcouldfocusonrelatedskillsorsupportoneoftheothervaluechains.Similarly,Eskom’sexistingartisantrainingJETImplementationPlan2023–2027233centreforboilermakers,andwelderscanbescaledup.Bothfacilitiescansupportawidevarietyofskillsandcanpartnerwithothereducationinstitutions,suchasTVETandcommunitycolleges,aswellaslocalbusinesses,suchascoalmining.Communityupskillingandreskillingcanalsobeafocuswithinthis.„SouthAfricahastheskillstoexpandthetransmissionnetworktoaccommodatetheexpansionofREforelectricityandultimatelyGH2.Theproblemisthevolumeofskillsthatwillberequired,giventhattherehavenotbeenanylarge-scaletransmissionexpansionprogrammesforanumberofyears.Aninterventionisproposedtoaddressthis,usingtheTransmissionDevelopmentPlan(TDP)atEskom,toensuretheseskillsaredevelopedatthescalerequired,andensurethatsomeoftheseskillsaretransversalwithlowervoltageswiresprogrammessotheskillscanalsosupportinitiativesatmunicipalandEskomdistributionlevel.„BuildonthemanufacturingopportunitiesintheREvaluechainidentifiedinSouthAfricanRenewableEnergyMasterplan(SAREM)asaquickwinfortheSDZstoidentifyecosystemskillsneeds.NewElectricVehicles(NEVs):AskilledlabourforcecanensurethattheadoptionofNEVsbenefitsallcommunities,preventingjoblossesintheautomotivesector.Asaresult,theAutomotiveIndustryDevelopmentCentreEasternCape(AIDCEC)iscurrentlyworkingonanEVskillstransitionmasterplanwiththeaimofachievingasuccessful,inclusive,sustainable,andeconomicallybeneficialtransitionforthecountry.Upskillingandreskillingeffortsshouldbeinclusive,takingintoconsiderationthedifferentNEVs(electriccars,plug-inhybrids,andfuelcellvehicles),thepotentialemployeesacrossthethreeNEVs,andendusersasthelocalmarketgrows.Potentialquickwins:„TheUniversityoftheWesternCape(UWC)hasanEnergyStorageInnovationLaboratorybasedattheSouthAfricanInstituteforAdvancedMaterialsChemistry(SAIAMC)thathasbeenrunningforovereightyears.Thislaboratoryisfocusedonbatteryprogrammesespeciallyinthefieldoflithium-ionandsodium-halidebatteries,batterymodules,andintegratedenergystoragesystems.Giventheneedforlocalisation,andthefactthatSouthAfricaisaleadingproduceroflithium,skillsinthisareashouldbeacceleratedtogetherwithleanmanufacturingskills,andthislaboratorycanbefasttrackedtoassist.Thisinitiativewouldbeacross-cutterfortherenewablescoreareaaswellasEVs.„ForSouthAfricatobecompetitiveintheglobalspaceandmaximiselocalisationopportunities,leanmanufacturingisacriticalareaofskillsdevelopment.TheLeanInstituteAfricaisaninitiativeoftheUniversityofCapeTownGraduateSchoolofBusinessandisamemberoftheLeanGlobalNetwork.AligningandscalingtheirprogrammesfortheneedsoftheJETwoulddevelopanecessaryandscarceskill.234JETImplementationPlan2023–2027Chapter9:SkillsGreenHydrogen(GH2):TheproductionandutilisationofGH2requiresadvancedtechnologicalknowledgeandexpertiseacrossthevaluechain,spanningfromelectrolysistechniquestoinfrastructuredevelopment.InrecognisingtheneedforGH2skills,theEnergyandWaterSectorEducationandTrainingAuthority(EWSETA)havedevelopedaHydrogenFuelCellSystemPractitionerSkillsProgrammeforhydrogensystempractitionerstoberunbyQCTOaccreditedproviders.98AdditionalskillsworkneedstobeconductedtoensureaJET,includingthereskillingandupskillingofemployeesworkinginareassuchaschemicalengineering,mechanicalengineering,automation,andcontrolsystems.Potentialquickwins:„ScaleupthecurrentHySAprojectthatsupportsthreeresearchandskillsdevelopmentareasincatalysis,systems,andinfrastructure.These‘CentresofCompetence’alreadyhaveestablishednetworksthroughoutSouthAfricawithotherresearchersandbusiness.„TheNationalAssociationManufacturersofSouthAfrica(NAAMSA)incollaborationwiththeTradeandIndustrialPolicyStrategiescommissionedbytheDTIChascompletedaComprehensiveSkillsGapAnalysis,therecommendationsandthefindingsofwhichcanbebuiltonandinformpotentialactions.„TheChemicalIndustriesEducationandTrainingAuthority(CHIETA)hasaplantoupskill1000chemicalengineerstobecomehydrogensystemsengineersby2025.ThisprogrammecanbescaleduptoincludeothercriticalskillsforGH2identifiedbyCHIETA.„CHIETA,MiningQualificationsAuthority(MQA),andEWSETAhaveestablishedamemorandumofunderstanding(MOU)toworktogetheronsupportingthehydrogeneconomy.Thisinitiativecouldspearheadtheskillsworkinthisworkstream.Across-cuttingquickwin:„SupporttheexpansionoftheexistingresearchrepositoryofresearchdonetodateonJET(compiledaspartoftheSouthAfricanNationalEnergyAssociation(SANEA)/WITSEnergySkillsRoadmap)ontheEWSETAwebsitetoensurethereisnoduplicationandmaketheinformationpubliclyavailabletoallresearchersandinvestors.98EWSETA.(2023).HydrogenFuelCellSystemPractitionerskillsprogramme.(https://ewseta.org.za/wp-content/up-loads/2021/02/Hydrogen-Fuel-Cell-System.pdf).JETImplementationPlan2023–2027235Table31:ActivitiesneededfortheexpansionofskillsforallthreecorevaluechainsActivitiesOutputsLeadKeypartnersUpdatethedatabaseofcurrentJETstudies,ExpandedsituationalanalysisJETDeskSkillsForumcollate,andaggregatetoorganiseacrossthreecorevalueSETAschainscompletedQCTOConductaskillssupplyanddemandKeylocaltrainingprioritiesassessmentacrosstheskillsecosystemofestablishedeachvaluechain,byfurtherconsolidatingandverifyingtheworkdonetodate,e.g.:SANEA–EnergySkillsRoadmapNAAMSAhascompletedaComprehensiveSkillsGapAnalysisoftheEVsectorHySAworkonskillsandworkdonebyCSIR/DHETLinkedtoeachcoreVC,conductaActivelabourmarketcomprehensivesupplyanalysistoassesstheabsorptionofJETgraduatesprovisioningabilityandprovidercapacityofthecurrentPSETsystemtoprovidetherequiredskillsfortheenergytransition.HighlightgapsinthecurrentqualificationmixandprovidercapacityDevelop,resource,andidentifydeliverymechanismsforaskillstrainingplanpercorevaluechain(upskilling,reskilling,artisanprogrammes,apprenticeships)IdentifyprioritiesforproviderdevelopmentandengageQCTO,e.g.workplacetrainersDevelopreskillingplansforjobsatriskCatalyticimpactRolesandresponsibilitiesDurationThesebaselineswillhavespill-overimpactsonTheJETSkillsEcosystemwillberesponsible2024–2025anumberofothersectorsthatarepartoftheforco-ordinationwiththeForumandtheJETSkillsEcosystemandensureskillsneededSDZstoresourcethekeyskillsthatarerequiredacrossthevaluechains(VCs),andtheskillsThelocalSDZwillco-ordinateandalignneededtoresourceactivityacrosstheVCsresearch,data,demandandsupplyanalyses,andlabourmarketinformationlinkedtoJET,andcommissionnewcurrentandfuturelabourmarketstudieseitherthroughtheJETSkillsEcosystemorSDZs236JETImplementationPlan2023–2027Chapter9:Skills9.4.4FlagshipIntervention4:JETCapacityDevelopmentforGovernmentandKeyGovernmentInstitutionsThisinterventionisaimedatensuringthatthereisanenablingenvironmentforskillsdevelopmentinJETacrossgovernment,bybuildingthecapacityofthenationalandprovincialgovernmenttosupportJETimplementation.Thiswillfosteralignedandresponsivepolicydevelopment,ensurethatcapacityisbuilttoworksystemically,thatsynergiesareidentified,andthatawarenessofbestpracticegloballyisinplace.Aquickwin:„ExpandonworkdonebytheNationalEnvironmentalSkillsPlanningForumandtheWITS-RhodesGreenSkillsResearchProgramme,anenablingdocumenttoguideSETAswithskillsplanning,andsourcebookofskillstoolstohelpSETAsbuildabusinesscasewithemployers.TheseweredevelopedaroundGreenskillsbroadlybutcanbeadaptedtoafocusonJET.Table32:ActivitiesneededforJETcapacitydevelopmentforgovernmentandkeygovernmentinstitutionsActivitiesOutputsLeadKeyPartnersMappingofcurrentgovernmentCapacityneedsassessmentforDHETSETAsinterventionstodeterminecurrentgovernmentcompletedPSETAlevelofJETactivitiesHRDCRelevantgovernment,DevelopamatrixaligninggovernmentandprovincialprogrammesandprojectstofosterdepartmentssynergyNationalJETcapacitybuildingtrainingplanCapacitydevelopmentandSchoolofdevelopedandimplementedforadvocacyplanforgovernmentGovernmentgovernmentofficialsdevelopedWITS-RhodesSETAJETskillsneedsassessmentJETenablingdocumentdevelopedDHETcompletedILOSETAcapacitybuildingEnablingdocumentdevelopedtoprogrammeguideSETAsinJETskillsplanning,withtoolstoassistskillsplanningSETAtraining/capacitybuildingprogrammeplannedandconductedJETImplementationPlan2023–2027237CatalyticimpactRolesandresponsibilitiesDurationBetterintegrationandco-ordinationWorkingwithHRDC,PSETAwouldberesponsible2023–2025ofpolicyimplementationandforleadingthiswork-theywouldsub-contractthecollaborationinkeyareas.researchandtheaccountabilityforroll-outtootherorganisationsMaximisingscaleofeffortbypoolingresourcesandworkingThegovernmentdepartmentswouldberesponsibleacrossgeographicalandfunctionalforcompletingthelearningneedsassessment-thisboundarieswillincludetheidentificationoftheneedfordeepdivesintokeyareassuchasfortechnologiesorclimatefinancingandsendingtherightpeoplefortrainingTheywouldalsoberesponsibleforusingthelearningsacrossotherspheresofworkandgovernmentinitiativesGovernmentdepartmentswouldalsoneedtoidentifyareasofsynergywheretheycouldpoolfundingoreffort9.4.5FlagshipIntervention5:SupportFoundationalSkillsDevelopmentThisinterventionwouldaidinbuildingfoundationalskillsbyempoweringandupskillingteachereducators,andpre-serviceandin-serviceteacherstointegratesustainableenergyconceptsintothecurriculum.Aquickwin:„ThiswouldentailbuildingontheestablishedFUNDISAforChangenetwork,whichwasinitiatedbyRhodesUniversityandiscurrentlyfundedbytheSouthAfricanNationalBiodiversityInstitute(SANBI)acrossallteachertraininguniversitiesandisendorsedbytheNationalDepartmentofBasicEducation(DBE).Alllearningmaterialsdevelopedarecopyrightfreeasthenetworkoperatesasaknowledgecommons.TheJETImplementationPlancanleverageoffthenetwork,andthiswillensurethatteachertrainingwithinallSouthAfricanuniversitiesiscapacitatedforJET-relatedknowledgestreamsusingcopyrightfreematerialsdevelopedforteachereducatortraining.238JETImplementationPlan2023–2027Chapter9:SkillsTable33:ActivitiesneededtobuildfoundationalskillsdevelopmentActivitiesOutputsLeadKeypartnersEngageFUNDISAforChangeandfundastudyJETmaterialsFUNDISADBEtoidentifyJETknowledgeprogressionanddevelopedbyFUNDISAforChangewhereJETskillscouldbeincluded,anddevelopforChangeforallProgrammeDMREmaterialsusedbyuniversitiesteachertraining/TVETinthecountryDBEPCCWorkwithdifferentHEIstosupporttheirteachertrainingHEIswithteacherIdentifygapsandfasttrackdevelopmentofneweducationunitscontentand/orrecurriculateasrequired–mustcoverECD,Foundation,Intermediate,Senior,SANBIPhases,TVET,programmesforcommunitycollegesandadultlearningcentresRhodesUniversitySETAsCatalyticimpactRolesandresponsibilitiesDurationThismodelcanbeusedfortheco-ordinationofFUNDISAforChangewillberesponsible2025otherskills-buildinginitiativesovertimeandbeforreviewingtheirprogrammesandexpandedtoincludeothertransitionpathwaysidentifyinggapsincollaborationwiththeuniversities,theJETSkillsEcosystemandtheSDZsTheywillalsoberesponsibleforrolling-outthechangestocurriculawiththeuniversitiesTheuniversitieswillberesponsiblefortheadaptionanddesignoflocaltrainingprogrammesTheDBEwillberesponsibleforreviewingbasiceducationcurriculatoincludeadditionalJETmaterialJETImplementationPlan2023–20272399.5IndicatorsTable34articulatesthevariousobjectivesandindicatorsthatwillbeusedtomeasureprogress.Table34:IndicatorsforJETskillsNarrativesummaryObjectiveIndicatorJETimpactPSETsystemalignedandkeyareasSkillsmasterplanincludesJETco-operatingEffectiveskillsformationsystemHRDstrategyincludesJETsupportingthethreecorevaluechains(NEV,GH2,RE,andIncludedinSETASSPstransmission)Nationally(disaggregatedbyIncreasedemploymentandNewjobscreatedfromJETIPgender,age,employmentstatus,race/ethnicity,disability,andotherstrengthenedlivelihoodsdrawinginvestmentsvulnerabilitystatus)fromskillsrelatedtotheJETPercentagechangeinunemploymentindefinedResilientcommunitiesCommunitiesthatcanadapttocommunitieschangesandgeneratedeconomicgrowth240JETImplementationPlan2023–2027Chapter9:SkillsNarrativesummaryObjectiveIndicatorMedium-termoutcomes99Effectiveco-ordinationandStakeholderscollaboratingeffectivelyJETSkillsForumconstitutedandcollaborationofallstakeholdersandaligningrelevantprogrammesmeetingregularlytorespondtochangingskillsneedsNumberofcollaborationopportunitiesidentifiedSkillsSystemiseffectivelyTodevelopaJETSkillsPlanJETSkillsPlandevelopedandadjustingandrespondingtoagreedbyend2024changingJETskillsneedsJETSkillsPlanintegratedintoNationalSkillsMasterplanWomenandyouthparticipationIncreasenumberofwomenPercentageincreaseinnumberinJETmarketactivityandyouthparticipatinginskillsofwomenandyouthtrained/programmesemployedSDZsoperatingeffectively,SDZssetupandresourcedbyendNumberofSDZssetupandsupportingskillsdevelopment,2024operatingby2024communityliaison,andlinksbetweeninstitutionsImprovedcommunityliaisonTounderstandcommunityneedsPercentageincreaseinnumberofbyeducationcommunityandandassistcommunitieswiththecommunityinteractionsbusinesstransitionSkillssystemadjustedtonewMoreresponsiveskillssystemNumberofstudentsabsorbeddemandthatcanchangetoincludenewtechnologicaldevelopmentsNationalskillspolicyandstrategyToensurethatpolicyandlegislationJETintegratedintoNSDP,SkillsMasterplan,HRDstrategy,DTICalignedandco-ordinatedsupportstheJETandDMREmasterplansJETprioritiesincorporatedintoToensurethatallSETAscapacitatedNumberofSSPsandATRsthatsectorskillsplansandalignedonJETrequirementsandreflectJETprioritiesprioritiesTeachersareincludingJETTobuildfoundationalskillsbyNumberofpreserviceteachersintotheirlessonplanningandcapacitatingteachereducationtrainedteachinginstitutionsandpre-serviceteachers99Changesinbehaviourandperformance.JETImplementationPlan2023–2027241NarrativesummaryObjectiveIndicatorShort-termoutcomes100JETSkillsEcosystemandtheIdentificationofkeyrole-playersandTechnicaltaskteamappointed.NationalJETSkillsPlanningcurrentprogrammesofworkForumsupportingco-ordinatedForummembersidentifiedanddevelopmentandimplementationinvitedtoparticipateoftheJETSkillsPlanSDZsoperatingandenablingSDZsanchorinstitutionsareNumberofkeypartnersidentifiedlocallearningnetworksidentifiedandlearningnetworkwithemployers,educationalestablishedinstitutions,andcommunitiesTVETcollegesarebetterabletoTVETcollegestounderstandNumberofnewopportunitieslinkstudentswithworkplacesworkplaceneedsandmatchstudentsforwork-basedlearningandwithappropriateworkplacesapprenticeshipscreatedImprovedlevelsofskilledUnderstandcommunityneedsNumberoftrainedcommunitycommunitymembersandmatchthemwithreskillingormembersupskillingprogrammesSkillsacrossthreecorevalueTodeveloptherightskillsintherightNumberofstudentsemployedinchainsavailabletothemarketvolumeattherighttimethreecorevaluechainsGoodunderstandingofemergingGoodunderstandingofwhereJETrepresentedinWSPsandskillsneeds/labourmarketbusinessandotherstakeholdersoccupationsinhighdemandlistsinformationrequirecurrentandfutureemergingskillsGovernmentJETlearningneedsUnderstandbaselinesofJETskillsLearningneedsassessmentrequirementsunderstoodingovernmentandwheretherearecompletedbyend2024gapsEnhancedawarenessofJETGovernmentdepartmentsNumberofpoliciesstrategiesasanimportantdevelopmentunderstandwheretheycanapplyalignedtoJETprioritiespriorityJETintheirworkSETAsabletomakethebusinessSETAsabletounderstandtheNumberofSETAstafftrained/casewithemployersandplaykeyleveragepointsforJETawaretheirroleasintermediariesbetterimplementationwithintheirsectorandengagewithstakeholdersNumberofstakeholdersawarenessprogrammesJETknowledgeincludedinToadjustcurriculartoincludeJETteachertrainingatuniversitiesmaterialNumberofnewJETrelatedandcurriculamodifiedtoincludepartnershipsJETNumberofcurricularadjusted100Changesincapacityandsystems.242JETImplementationPlan2023–2027Chapter9:Skills9.6ManagingRisksTable35detailswhatrisksmightmaterialiseintheexecutionoftheJETskillsinterventions,ranksthemintermsofimpactsandprobability,anddetailsmitigationplans.9.6.1ManagingRisksandDependenciesTable35:RiskidentificationandmanagementforJETskillsInherentimpact101InherentprobabilityInherentriskratingResidualriskratingRiskdescriptionMitigationplans(waystoimprovecontrols)Fundingisinsufficientto224PrioritiseinterventionstoensurethattheLowimplementalltheinterventionsinterventionswiththebiggestimpactareandassociatedactivitiesfundedfirst;sourcesupplementaryfundingTheJETIPchangesoverthefive-313Agreeplanwithkeyroleplayersforthefive-Lowyearperiod,andareviewoftheyearperiodandmanagechangesbasedoninterventionsarerequiredimpactRelevantgovernmentpolicies326UnderstandkeydecisionpointsandputMediumandstrategiesforthepoweranearlywarningsysteminplacethroughsector,GH2,andelectricvehiclestheJETSkillsForumtonotifytheforumofarenotimplementedasplannedimpendingchangessothatproactiveactioncanbetakenFundingandsupportarenot326NegotiatewithDTICinadvanceofsettingupMediumreleasedbyDTICtosupportSDZssothatagreementisobtainedpriortoSDZsandtheSkillsEcosysteminanycommitmentsbeingmadelonger-term(>fiveyears)ConstructionofREinvestments339AligngovernmentpolicytoensureHighisnotcontinuous,inhibitinginvestmentandunblocktransmissioninvestmentconstraintsSeverelossofskillstoemigration339EnsureanadequatepipelineandencourageHighcompaniestoputretentionschemesinplaceEconomicgrowthislowand339MonitorimpactofGDPontheenergyHighinvestmentlevelsdonotsupportsectorandhaveitasastandingitemondemandtheForum’sagendasothatplanscanbeadjustedasrequired1013=high,2=medium,1=low.JETImplementationPlan2023–2027243Figure28:TheoryofChange–SkillsINTERVENTIONOUTPUTS(O)JETSkillsEcosystemandO01O02JETSkillsForumfocusingJETSkillsEcosystemestablishedonaco-ordinatedapproachNationalJETskillsplatformtoskillsanticipation,established,andresearchdevelopment,andutilisationcommissionedSDZsfocusedonthreeO03O04valuechainsfocusedonappliedskillsanticipation,ProposalforJETSDZstobeestablishedLocalactorsmappeddevelopment,andutilisationandresourcedforthethreevalueandleadinstitutionsforthethreevaluechainsappointedchains(NEV,GH2,REandtransmission)O05O06JETskillsdevelopmentTechnicalcapacitydevelopmentplansLocalskillsdevelopmentneedsassessmentsforthreeforSDZstosupportthethreecoreplanagreedwithactorscorevaluechainsvaluechainsdevelopedJETskillsplanningandO07O08supportforgovernmentandkeygovernmentinstitutionsCommunitydevelopmentplanExpandedsituationanalysiswithresourcerequirementsacrossthreevaluechainsFoundationalskillsidentifiedcompleteddevelopmentsupportO09O10KeylocaltrainingprioritiesValueChainSkillsSupplyandestablishedDemandbaselinescompletedO11O12CommunitydevelopmentplanExpandedsituationanalysiswithresourcerequirementsacrossthreevaluechainsidentifiedcompletedO13KeylocaltrainingprioritiesestablishedO14Valuechainskillssupplyanddemandbaselinescompleted244JETImplementationPlan2023–2027Chapter9:SkillsSHORT-TERM(ST)OUTCOMESMEDIUM-TERM(MT)OUTCOMESJETIPIMPACT(I)ChangesinsystemandcapacityChangesinbehaviourandperformanceI01Reliable,secureST01:JETSkillsMT01:Effectiveco-ordinationandcollaborationelectricitysupply,withEcosystemandtheofallstakeholderstorespondtochangingskillsaccessforlow-incomeNationalJETSkillsneedshouseholdsPlanningForumsupportingco-ordinatedMT02:SkillssystemisadjustingandrespondingI02developmentandtochangingJETskillsneedsJobscreatedinimplementationoftherenewableenergy,JTSkillsPlanMT03:WomenandyouthparticipationinJETindustrialisation,tourism,marketactivityagriculture,etc.ST02:SDZsoperatingandenablingMT04:I03learningnetworkswithemployers,Sustainablelivelihoodseducationalinstitutions,andSDZsoperatingeffectivelysecured/strengthenedcommunitiessupporting,skillsdevelopment,forSMMEs/communitiescommunityliaison,andlinksatriskfromclimateandST03:TVETcollegesarebetterabletobetweeninstitutionstransitionimpactslinkstudentswithworkplacesI04ST04:ImprovedlevelsofskilledcommunityMT05:ImprovedGHGemissionsreducedmemberscommunityliaisonbyeducation,community,andI05ST05:SkillsacrossthreevaluechainsbusinessSocial,economic,availabletothemarketandenvironmentalMT06:Skillssystemdevelopmentco-benefits,ST06:Goodunderstandingofemergingskillsadjustingtonewdemande.g.improvedairqualityneeds/labourmarketinformationandregenerationST07:GovernmentJETlearningneedsMT07:NationalpolicyandWIDERIMPACTrequirementsunderstoodstrategyalignedandco-ordinatedTransitiontoaST08:EnhancedawarenessofJETasanlow-carboneconomyimportantdevelopmentpriorityfortheMT08:JETprioritiesandajust,climate-countrysothattheycanapplyitintheirworkintegratedintosectorskillsresilientsocietybyplansmid-centuryST09:SETAsabletomakethebusinesscasewithemployersandbetterabletoplaytheirroleasintermediariesST10:JETknowledgeincludedinteacherMT09:Teachersaretrainingat14universitiesandcurriculaincludingJETintheirlessonmodifiedtoincludeJETplanningandteachingJETImplementationPlan2023–2027245246JETImplementationPlan2023–2027Chapter10:MUNICIPALITIES247PURPOSEThepurposeofthischapteroftheJETImplementationPlanisto:„articulateactionsthatwillcontributetoasignificantimprovementintheabilityofthemunicipalelectricitydistributiongridtoabsorbhigherlevelsofRenewableEnergy(RE)andtomakeastrongercontributiontoreducingenergypoverty„assigninstitutionalownersandtargetstotheseactionstoensuretheco-ordinatedmobilisationofbotheffortandfinancebyrelevantrole-playersinthepublicandprivatesectors„buildonexistinginitiativesinrespectofmunicipalcapabilitydevelopmentandsupport,reviewofthelocalgovernmentelectricitypricingmodel,andtheimplementationoffreebasicelectricity.10.1ContextLocalgovernmentownsandoperatesapproximatelyhalfofSouthAfrica’selectricitydistributiongrid.Atotalof165102(of257103–205local,44district,andeightmetros)municipalitiesareelectricityserviceproviders,throughtheallocationofdistributionlicensesbytheNationalEnergyRegulatorofSouthAfrica(NERSA)(AnnexureA).However,mostoftheelectricitydistributionislocatedinrelativelyfewmunicipalities:fivemetrosaccountfor63%ofmunicipalelectricitysales,andthenext11largestmunicipalitiesaccountforanadditional19%ofsales.Approximately20municipalitiesaccountforcloseto90%ofthemunicipalelectricitymarket.104102IntermsoftheConstitution,allmunicipalitiesareelectricityserviceauthorities,butthereisaclearseparationbetweenauthorityandproviderintermsofthelegislation.Providerstatusisdeterminedbytheholdingofadistributionlicenseand,byimplication,ofmeetingtherequirementsofthatlicense.Thischaptercoversinterventionstosupportthe165authorisedelectricityserviceproviders.103Inthebalanceofmunicipalities,allelectricityservicesareprovidedbyEskom.Itshouldbenoted,however,thateveninthe165municipalities,Eskomisresponsibleforatleastsomeoftheelectricitydistribution.104Source:SALGA.(2023).248JETImplementationPlan2023–2027Chapter10:MunicipalitiesMunicipalitieshaveacriticalroletoplayinasuccessfulenergytransition,inimprovingSouthAfrica’senergysecurity,andinensuringthatthecountryhassufficientreliableandaffordableelectricitytosupportexpandedsocio-economicdevelopment.Giventhewidelyvaryingcomplexitiesthatconfrontlocalgovernment,themunicipalenergytransitionneedsafocussedandcollaborativeapproachacrossnational,provincial,andmunicipalspheresofgovernmenttomanagethesignificantfinancial,technical,andmanagerialchallengesandrisksofthetransition.Thisestablishedinter-governmentalrelationsapproachisspearheadedbytheDepartmentofCooperativeGovernmentandTraditionalAffairs(COGTA)andNationalTreasury(NT),alongwithorganisedlocalgovernmentstructures,andwillbekeytofindingsustainableelectricitysystemsolutionsformunicipalitiesofallsizesandcapabilities.Themainrolesthroughwhichmunicipalitieswillcontributetotheseoutcomesareasfollows:„RecentchangesinlegislationallowmunicipalitiestopurchasepowerdirectlyfromIndependentPowerProducers(IPPs)and/ortoestablishtheirownpower-producingentities.105„Municipalitiescanpotentiallyplayasignificantroleinboththerapiddecarbonisationoftheelectricitysectorandaddressingnationalelectricitysupplyconstraints,supportingtheenergytransition,andincreasedeconomicgrowth.Theabilityofregulatoryinnovation–suchasthatallowingforincreasedembeddedgenerationandwheelingacrossthegrid–tomakeameaningfulcontributiontoSouthAfrica’senergytransitionandsecurityofsupply,willbedetermined,inlargepart,bythefunctionalityandrobustnessofmunicipalgridsandsystemoperation,includingappropriatetariffstructures.Themunicipalelectricitydistributiongridinmanyplaceshasdeterioratedsignificantlyoverthepast20yearsandisnowamajorcontributortopoweroutages(overandabovescheduledloadshedding).In2017,theSouthAfricanInstitutionofCivilEngineering(SAICE)gavemunicipalelectricitydistributioninfrastructureinaggregatean‘atriskoffailure’score.106Intheircurrentstate,thedistributiongridsinmostmunicipalitiesareabarriertoembeddedRenewableEnergy(RE)generation,securityofsupply,aswellasadequateequitablesustainableenergyaccess.Thesuccessfuluptakeofelectricvehicles(EVs)–particularlyatlarge-scaleforpublictransport–willbesupportedbythefunctionalityofmunicipaldistributiongrids.Municipalitiesplayaleadingroleinfacilitatinguniversalaccesstoelectricity.TogetherwithEskom,theyareresponsibleforreducingtheelectrificationbacklog,fundedthroughtheIntegratedNationalElectrificationProgramme(INEP)grant.Affordabilityisabarriertoensuringthatallhouseholdsandsmallbusinesseshaveaccesstosufficientelectricity.Municipalities105Priortothesechanges,municipalitieswerealmostentirelylimitedtopurchasingpowerfromEskom,withveryfewandsmallexceptions.106Meaning:“Infrastructureisnotcopingwithdemandandispoorlymaintained.Itislikelythatthepublicwillbesubjectedtosevereinconvenienceandevendangerwithoutpromptaction.”JETImplementationPlan2023–2027249contributetoaffordabilityintwoways:firstly,municipalelectricitytariffsdirectlydetermineaffordability;andsecondly,municipalitiesaremandatedtooverseeandimplementthenationalfreebasicservicespolicy,includingtheFreeBasicElectricity(FBE)subsidy.107IncreasedaccesstotheFBEsubsidybylow-incomehouseholds(thatis,betterimplementationoftheexistingpolicy)willcontributedirectlytoreducingthecostofelectricityforthesehouseholds.Thefutureenergygenerationsystemwillrequireamunicipalelectricitysystemthatisfundamentallydifferentindesign,capability,andoperationfromthecurrentsystem,andsignificantinvestmentisrequiredtodeliverthis.Asuccessfulenergytransitionrequiresfunctionaldistributiongrids(whichincludesnewformsofdemand-sidemetering(DSM),suchassmartmetering)thatcanaccommodateanincreasingpenetrationofREgenerationatdifferentscales,andfacilitatenewgenerationmodes,suchaswheelingandfeed-inbySmall-ScaleEmbeddedGeneration(SSEG)systems.Gridinvestmentsandsmartupgradesarerequiredtoenablegridstability,optimalgridcontrol,safety,feed-in,andappropriatestorage.ThedesiredoutcomesformunicipalitiesinrespectoftheJETIPareasfollows:„Anincreasedshareofrenewables(fromIPPsorowngeneration)inthemunicipalelectricitysupplymix„Functionaldistributiongridsthatwillsupportgreaterlevelsofrenewablespenetration,ahigherlevelofelectricitysupply,multiplegenerationmodels,anduniversalaccesstoelectricity„MunicipaltariffstructuresthatsupportthegoalsoftheJET,notablyfinanciallysustainableelectricityutilities,increaseduptakeofrenewablesonthemunicipalgrid,andaffordableaccesstoelectricity„Highcapabilitymunicipalitiesabletoplan,implement,andmanagetheelectricitygenerationanddistributionfunctionenvisagedintheJET.TheJETIP2023–2027identifieskeyactivitiesandinvestmentsrequiredtodelivertheenergytransitionatmunicipallevel,asshowninTable36.107Evenwhereamunicipalitydoesnotdistributeelectricity,itstilloverseestheFBEandisresponsiblefordeterminingwhichhouseholdsqualifytoreceivethesubsidy,andtransfersthefundstotheentitythatsuppliesthosehouseholds.250JETImplementationPlan2023–2027Chapter10:MunicipalitiesTable36:KeyactivitiesandinvestmentsrequiredtodeliverenergytransitionsatmunicipallevelCategoryZARbillionInfrastructure:Distributionmaintenance200Infrastructure:DistributionmodernisationforNEVs10873Infrastructure:Electrificationbacklog45DSM0.5Energyaccessdesign0.1Capabilityandcapacity0.23Knowledgegeneration(collectiveplanningtosupportJET)0.03Knowledgemanagement(municipalrevenue)0.2AclosereadingoftheJETIPmakesitclearthatthecategory‘Infrastructure:DistributionMaintenance’isintendedtoincludeallgridupgradingrequiredforasuccessfulenergytransition.Inaddition,intheinterestsofachievingeconomiesofscaleincapacity,integratedplanningandexpenditure,andalignedoutputs,itisalsorecommendedtoincludethegridmodernisationrequiredforEVsintoonecombinedcategory(togetherwithgridmodernisationandreducingthemaintenancebacklog)ofmunicipaldistributiongridupgrading.Thisrepresentsbyfarthemostsignificantinvestmentrequirementsinmunicipalities–atotalofZAR273billion.Itshouldbenotedthat,althoughtheJETIPstatesthatthisisafive-year(2023–2027)investmentrequirement,thissumrepresentsthetotalinvestmentrequired;andcapacitylimitationswithinmunicipalities,togetherwithfiscalconstraints,implythatonlyasmallpartofthatfundingislikelytobespentby2027.Theactuallevelofexpenditurewillbedeterminedbyseveralfactors,suchasthepaceatwhichmunicipalcapabilityincreases,accesstoadditionalconcessionalclimateinvestmentfunds,andtheabilitytoleverageprivatesectorinvestment.Theremaininginvestmentcategoriesarethefollowing:„Addressingtheremainingelectrificationbacklog(achievingthegoalof100%householdelectrificationrate,fromthecurrent86%):Thisitemalsoincludesalternativesolutions(suchasinvestmentsinmicro-grids)forareaswheremaingridconnectionspresenttechnicaland/orfinancialobstacles.108Electricvehicles.Thisisparticularlyrelevantforurbanareasandmunicipalitieslocatedonlong-distanceroadroutes.JETImplementationPlan2023–2027251„Demand-sidemanagement:Smartmeteringandcomplexbillingsolutionsarelikelytobeasignificantcomponentofthenewgridrequirements,andthusrequiremuchmoresignificantinvestmentthancurrent(basic)meteringandbillingsystems.Inaddition,municipalitiesshouldidentifyandimplementenergyefficiencystrategiestoreducedemand.„Energyaccessdesign:ThisinvestmentisintendedtoaddresscurrentproblemswithhouseholdaccesstotheFBEsubsidy.ThereisaconsiderablediscrepancybetweenthenumberofhouseholdsfundedforFBEinthenationalbudget,andthenumberthatactuallyreceiveit.„Capabilitydevelopmentandsupport:Thisincludesthe‘capabilityandcapacity’itemabove,togetherwithknowledgegenerationinrespectofcollectiveplanningtosupporttheJET.„Research:Thisisneededtoinformtheoptimisationofthemunicipalelectricitytariffandrevenuesystemsothatitisalignedwithandsupportsthegoalsoftheenergytransition.10.2Stakeholders’ConcernsandFeedbackDuringconsultationsheldbythePresidentialClimateCommission(PCC),stakeholdersraisedanumberofissuesandconcerns,whichhavebeenaddressedinthisImplementationPlan.Table37:StakeholderconcernsandhowtheseareaddressedThemeStakeholderconcernsDefiningtheroleAlthoughthereisachapteronmunicipalitiesintheJETIP,manymunicipalitiesareofmunicipalitiesinunawareofallthedetailsofthischapter,andverylittleworkhasbeendonetodateintheJETrespectofmostoftheissues(apartfromproposalsinrespectoftheFBE).SustainabilityoftheMunicipalitieshighlightedthestructuralchallengesofthecurrentoperatingmodelcurrentmodelofofmunicipalelectricitydistribution.Theseincludethedifficultiesofprovidingmunicipalelectricityelectricityatsufficientlyaffordablerates,whilesimultaneouslyfundinginfrastructuredistributionmaintenanceandupgrading.Thesentimentwasexpressedthattheoperatingmodelneedstobesignificantlyoverhauledtobecomemoresustainable.Collaborativeandcontext-specificMostmunicipalitiesareclearthattheywanttobemoreinvolvedinthedevelopmentplanningoflocallyspecificstrategiesthatreflecttheparticularcircumstancesintheirownmunicipalities.Thereisclearoppositiontotop-downdevelopedandone-size-fits-allmodels,aswellasaJETImplementationPlaninstitutionalstructurethatdoesnotgiveastrongvoicetomunicipalities.Higher-capability/readinessmunicipalitiesdonotwishtobeheldbackbyrigidoversight/funding/supportstructuresthathavebeendesignedforthelowestcapability/governancemunicipalities.252JETImplementationPlan2023–2027Chapter10:MunicipalitiesHowtheconcernsareaddressedThereismorepreparatoryworkthatstillneedstobedoneinrespectofmunicipalitiestoensurethatprogrammesmatchallrequirements.ThisisthefocusofthefirstsixmonthsoftheImplementationPlan.MostinitiativesproposedintheImplementationPlanaredesignedtoimprovethesustainabilityofmunicipalelectricitydistribution.Initiativesinrespectofthelocalgovernmentrevenueandelectricitypricingmodelareparticularlyrelevantinthisregard.OneoftheguidingprinciplesoftheImplementationPlanisacommitmenttoco-creationoflocal-contextspecificstrategiesforindividualmunicipalities,andadifferentiatedapproachtoimplementation.ItisrecommendedthattheJETMunicipalCouncil(JETMC)containsamajorityoflocalgovernmentrepresentatives(fromSouthAfricanLocalGovernmentAssociation(SALGA),AssociationofMunicipalElectricityUtilities(AMEU),andthemetromunicipalities).JETImplementationPlan2023–2027253ThemeStakeholderconcernsFragmentedandTheProjectManagementUnit(PMU)isthecentralinstitutionindevelopingthecomplexinstitutionalroadmapandoverseeingitsimplementation.AkeyroleofthePMUistoensure(oversight)clarityofinstitutionalrolesandclearmandates,whichareessentialfortheeffectivearrangementsimplementationoftheJETIP.However,thisisacongestedspaceinrespectoftheinrespectofmunicipalenergytransition.NationalgovernmentoversightoflocalgovernmentmunicipalitiesislargelyasplitfunctionbetweenNationalTreasury(NT)andDepartmentofCooperativeGovernanceandTraditionalAffairs(COGTA),withoverlapinanumberofareas.ProvincialTreasuriesandCOGTAdepartmentsalsoplayasignificantroleinlocalmunicipalities.TheDepartmentofMineralResourcesandEnergy(DMRE)hasanindirectoversightrole,throughtheregulatoryfunctionofNERSA,andlineresponsibilityforlegislationthatfacilitatesdirectpurchasesofand/orowngenerationofelectricity.Clarityandco-ordinationofalltheseroleswillbenecessarytoensurethesuccessfulimplementationoftheJETIP.AccesstofundingCurrentexpenditureoninfrastructuremaintenancefallsveryfarshortofwhatisrequiredtoaddressthebacklog:theannualnationalrepairs,maintenance,renewalandupgradingbudgetacrossallrelevantmunicipalitiesislessthanZAR10billion(AnnexureB).Inadditiontoaddressingthemaintenancebacklog,additionalinvestmentsingridmodernisationareneededtoexpand,reinforce,andenhancethedistributiongridandintegratedequipmentandsystems(suchassmartmeteringandbillingsystems).TheseupgradesarecriticalforenablingtherapidincreaseinREgenerationandensuringofftake,giventhegreatershareofthisgenerationembeddedindistributionnetworksnationallyovertime,aswellaswheelingagreementsinvolvinggenerationconnectedtoEskomormunicipalgrids.Therearecurrentlynoconditionalgrantsavailabletolocalgovernmentforthispurpose.Theentiremaintenancebacklogaswellasthesignificantinvestmentsrequiredinnewinfrastructurecannotreasonablybeexpectedtobefullyself-fundedinfullwithoutsignificantsupport.Whilemunicipalitiesdohaveotheroptions–inadditiontodirecttransfersviaconditionalgrants–inrespectofraisingfundsfornewinfrastructureinvestments(throughvariousborrowingoptions,blendedfinance,pooledfinancingarrangements,andothers),consultationswithstakeholdersindicatethatthemajorityofmunicipalitiesrequiresupportinordertotakemaximumadvantageoftheseoptions.Themajorityofmunicipalitiesareinfinancialdistress.Onlyaverysmallnumberhavetheabilitytoraisefundsbasedontheirownbalancesheets.TheJETcannotbelimitedtojustthesemunicipalities.Todate,themainfundingsourcefordistributioninfrastructuremaintenanceandcertaincategoriesofupgradesinmunicipalitieshasbeenownrevenue(derivedfrompropertyratesandtaxes,andthesaleofservices).Therearenonationalconditionalcapitalgrantsthatcanbeusedongeneralelectricityinfrastructuremaintenance:theINEPconditionalgrantisintendedfornewinfrastructureinpreviouslyunservicedareas,andalthoughaportionoftheIntegratedUrbanDevelopmentGrant(IUDG)maybeusedforelectricityinfrastructureupgrades,thisissubjecttolocationlimitsandisnotavailabletoallmunicipalities.Thenationalfiscusisextremelyconstrained,andthereisgeneralreluctancetomakeadditionalfundingavailabletomunicipalitiesfromthissource.254JETImplementationPlan2023–2027Chapter10:MunicipalitiesHowtheconcernsareaddressedTheImplementationPlanproposesaJETMCtooverseeactivities.Thisstructurewillplayakeyroleinbringingtogetherandco-ordinatingtheactivitiesofthevariousentitiesresponsibleformunicipalregulationandoversight.TheImplementationPlanproposesanumberofstrategiestosupportmunicipalitiestoimprovethefinancialviabilityofelectricitydistributionoperations,andincreasetheirabilitytoraiseadditionalfundingthemselves,includingoptionsforsmallermunicipalitiesunabletoleveragetheirownbalancesheets.Italsoproposesthatthepossibilityofanewconditionalgrantspecificallyformunicipalinfrastructurebeinvestigated.JETImplementationPlan2023–2027255ThemeStakeholderconcernsMunicipalcapabilityTherearesignificantcapabilitygapsacrossmunicipalitiesinmultipleareasrequiredforasuccessfulenergytransition,includinginthefollowingareas:ƒPlanningfornewrenewablegenerationcapacityand/orpurchasesthereofƒStructuringoptimumfinancingarrangementsforawiderangeofinvestmentsƒSmartgriddesignƒInfrastructureplanningandprojectimplementationƒTechnicalskillstoimplementsignificantlyincreasedmaintenancetoaddressthebacklogƒSystemoperation,includingsystemgovernanceƒFinancialgovernanceandoversight.Althoughallmunicipalitiesrequirecapabilitydevelopmentandsupportacrossalltheseareas,therearesignificantdifferencesinexistingcapabilitylevelsacrosstheJETtargetareasandamongmunicipalities.Inrespectofnewgenerationcapacity,asmallnumberofmunicipalitiesareatarelativelyhighlevelofreadinesswithrespecttoincreasingsupplyofrenewablepowerontotheirgrids(eitherthroughdirectpurchasesorowngeneration),whilethemajorityareatmuchlowerlevelsofreadiness.Manydonothaveaccesstoanyofthedetailedinformationrequiredtomakeeffectivedecisionsinthisregard,suchasaccuratecost-of-supplystudies.Muchthesamesituationappliesinrespectofgridupgradinganderadicatingthemaintenancebacklog.Whilesomemunicipalitieshaveagridthatisinarelativelygoodstateofrepairandagoodcapabilitybase,asignificantnumberofmunicipalitiesdonothaveeventhemostbasicfoundationinplacerequiredtosuccessfullydevelopsmartgrids.Manyhaveneverundertakendetailedcost-of-supplystudies,nordotheyhaveinplacebasicgridoperationframeworks(suchasthoserequiredtofacilitatewheelingofpowerthroughtheirgrids).Mostmunicipalitiesstruggletofindandretainspecialistartisanandengineeringskills(ofwhichthereisageneralshortageinSouthAfrica)andthedemandfortheseislikelytoincreasesignificantlyasinfrastructureinvestmentaccelerates.Municipalitiesreportthattheyroutinelylosespecialistengineeringandartisanskillstotheprivatesector.Legacyin-houseartisantrainingprogrammesinmunicipalitieshavemostlydisappeared.Asaresult,thereisnolongerapipelineofyoungerartisansenteringthesystemtoreplacethosethatretire(orleavethemunicipalsector).Specialistelectricityengineeringskillspresentaparticularlyhighbarrierforsmallermunicipalities,whichdonothavetheresourcestoemploytheseskillsonapermanentbasis,andalsofindconsultingfeesinthisspaceprohibitivelyexpensive.Itisthusaconsiderablechallengeforthemtoobtainskilledandimpartialadviceonhowtodesignandimplementnewenergygenerationandgridupgradingstrategies.Municipalitieshaveindicatedthattheyrequirecapabilitydevelopmentandsupportinareasrelatedtofundraising:256JETImplementationPlan2023–2027Chapter10:MunicipalitiesHowtheconcernsareaddressedTheImplementationPlancontainswide-rangingproposalsforincreasingthelevelandrangeofsupporttoimprovethecapabilityofmunicipalitiesinalargenumberofareas.JETImplementationPlan2023–2027257ThemeStakeholderconcerns(continued)(continued)MunicipalcapabilityƒTheywillrequiresophisticatedadviceinrespectofexploringvariousfinancingoptions(includingthepossibilityofpooledfundingforsmallermunicipalitiesthatdonothaverobust-enoughbalancesheets),projectfinancepreparation,andsupporttogotocapitalmarkets.AlthoughthePolicyFrameworkforMunicipalBorrowing(AnnexureC)createssignificantregulatoryspaceforinnovationinfunding,municipalitiesrequirespecialistsupporttotakeoptimumadvantageofthis.ƒSupportandadviceintermsofnegotiatingwithIPPsforlong-termpowerpurchasesagreements(mostofwhichwillrequireaformalPPPinordertobecompliant).Thisadviceincludesthatrequiredtodeterminetheoptimumsupplymixforamunicipalitytooptimisethecostandreliabilityofsupply.Atatechnicallevelsignificantcapabilitydevelopmentisrequired.Technicalsupportisneededintermsofdesigning,implementing,andmanagingthenewsmartgridsthatthefutureenergysystemrequires,includingdesigningandimplementingnewformsofgridgovernance(includingnewtariffstructuresandframeworks).Thereisaneedforintegratedplanningsupporttodirectandinstitutionaliseprogressivetransformationandshapelocaltransitions.Significantspendingoncapitalinvestmentsinanewgridmustbebasedonagoodplanningfoundationandrequiresappropriateskillstobeimplementedcorrectly.Gridredesignandupgradingforthefutureelectricitysystem–andimplementingplansinthisregard–isaspecialistskillinrelativelylowsupply.Allmunicipalitieshaveacapacitydeficitinthisarea,whichmustbeaddressedinorderforgridplanstobeimplemented.Technicalcapabilityforbasicmaintenanceplanningandimplementationmustbesignificantlyincreasedinordertoreducethemaintenancebacklog.Mostmunicipalitiesdonothavetheresourcestoprovideallthesemultipleskillsin-houseattheappropriatelevel.Eventhemostadvancedandwell-resourcedmunicipalitieswillstillrequiresomelevelofexternalsupport.Inadditiontothese(externallyprovided)specialistskillsdirectlyrelatedtoincreasingrenewablespenetrationandimplementingnewgriddesign,municipalitieshaveindicatedtheneedtosignificantlyexpandanddeveloptheirin-housetechnicalcapabilityinrespectofbasicartisanskills–electriciansandsimilar,maintenancemanagementsystemsandprocessesinordertobeabletoscale-upmaintenanceexpenditure,andsystemoperationandgovernance.Finally,municipalitiesneedtodevelopskillretentionpoliciestoensurethatinvestmentsinincreasedcapabilityaresustainable.258JETImplementationPlan2023–2027Chapter10:MunicipalitiesHowtheconcernsareaddressedTheImplementationPlancontainswide-rangingproposalsforincreasingthelevelandrangeofsupporttoimprovethecapabilityofmunicipalitiesinalargenumberofareas.JETImplementationPlan2023–2027259ThemeStakeholderconcernsFragmentationThereisconsiderablefragmentationandduplicationinthemunicipalcapabilityandduplicationofdevelopmentspace.109Alargenumberoforganisations–insideandoutoftheState–municipalcapabilityarecurrentlyengagedinprovidingcapabilitydevelopmentsupporttomunicipalitiesdevelopmenteffortsinrespectofmanyoftheareasdescribedabove.110Whilemanyoftheseprogrammeshavebeensuccessfulinspecificareas,betterco-ordinationacrossthemwillimproveeconomiesofscale,improvecoverage,andensurethatallaspectsofrequiredcapabilityaredelivered.Inaddition,identificationofparticularlysuccessfulprogrammeswillfacilitatetargetedallocationofresourcesandencourageup-scaling.TheneedtoCivilsocietyorganisationsandcommunityrepresentativeshavebeencriticaloftheimprovehouseholdpoorlevelofimplementationofthecurrentFBEsystembymunicipalities(feweraffordabilityofthan30%ofhouseholdsfundedinthenationalbudgetactuallyreceivethebenefit).electricityandaccessAdditionally,thecurrentleveloftheallowance(50kWhperhouseholdpermonth)toFBEhasbeencriticisedasbeingtoolow,andproposalsweremadethatthisisincreasedto350kWh.Mostlow-incomehouseholdscanonlyaffordelectricalappliancesthatareenergyinefficient(andoftendangerous).Thisisparticularlythecasewithcookingappliances.Ifhouseholdscanaccessmoreefficientappliances,theywillreduceusageandcost(andthuseffectivelyincreaseaccesstoelectricity).Stakeholdersindicatedthattheywereverysupportiveofsuchaninitiative.109(https://www.treasury.gov.za/publications/other/National%20Treasury%202022%20System%20of%20Capacity%20Building%20for%20Local%20Government%20Diagnostic%20Review.pdf).110ItisestimatedthatapproximatelyZAR10billionisspentannuallyonlocalgovernmentcapacitybuildinginitiatives.260JETImplementationPlan2023–2027Chapter10:MunicipalitiesHowtheconcernsareaddressedTheImplementationPlanproposesthatareviewofcurrentcapabilitydevelopmentmandatesrelevanttotheJETisundertaken,to:ƒidentifyhigh-impactprogrammesƒascertainthemostappropriateinstitutionallocationforcapabilitydevelopmentsupportƒconsolidaterelevantcapabilitybuildinginitiativesacrosstheStateunderthatentity.CapabilitydevelopmentprogrammesoutsideoftheState(i.e.managedbynon-Stateentities)willbeencouragedtoconsolidatetheireffortswiththeState-driveninitiativesundervariousareasofsupport.Whilethereisgeneralagreementonthelong-termgoalof350kWhperhouseholdpermonth(andthishasbeenincludedintheproposedelectricityplan)currentfiscallimitspreventshort-termimplementation.ProposalstoimprovetheimplementationoftheexistingbenefitwillbepartoftheNTreviewdescribedbelow,andsodonotformpartofthisImplementationPlan.TheImplementationPlanrecommendsaprogrammetosubsidisethecostoflow-incomehouseholdaccesstoenergyefficientappliances.Suchaprogrammecouldbelinkedtoalocalmanufacturingdevelopmentinitiative.JETImplementationPlan2023–2027261ThemeStakeholderconcernsThecurrentThereareseveralchallengestobeaddressedinthisregard.Thecurrentlocalmunicipalrevenuegovernmentelectricityrevenue(i.e.tariff)modelhasbeendesignedtosupportandelectricitytariff-municipalrevenue(toensurefullyfundedmunicipalbudgets),andnotspecificallytosettingmodelmeettherequirementsofuniversalenergyaccess,energydiversification,distributedgeneration,andsmartgrids.Electricitytariffsdonotcurrentlysupportmunicipalities’accommodationofSSEGorotherembeddedrenewableelectricityandassociatedoff-takeagreements,nordotheyenableequitableservicedelivery.Therealityisthattheseareoftencompetinggoals,andthereisnoclearmethodologyinplaceforhowthesearetoberesolved.Theredesignofmunicipalelectricityfinancialmodelsisrequiredtoincentiviseoptimalactionsfordifferentgridusers,supportmoreprogressivesystemoutcomes,andadequatelyresourcethesystemoverthelong-term.Mostmunicipalitieshavenotundertakendetailedcost-of-supplystudies.Lackofaccurateinformationastotherealcosttodelivertheservice,andconsequentinappropriatetariffsandsubsidiesleadtoinsufficientfundingforelectricityandsub-optimalfinancialincentivesforallactors–municipalitiesandelectricityusers.Inaddition,thereareeffectivelymultipleelectricitytariffsettingauthoritiesinlocalgovernment.WhileNERSAhasconsiderableregulatoryauthorityinthisspace,theMunicipalFinanceManagementAct(MFMA)alsoregulatestariffsettingbymunicipalitiesandallowsforthelevyingofcharges(whicheffectivelyformpartofthetariffstructure)thatarenotregulatedbyNERSA.Thisfragmentedregulatoryauthorityisnotdesirable.Finally,manymunicipalitiesarestrugglingtocollectrevenueforelectricityandotherservices.MorethanZAR200billioniscurrentlyowedtomunicipalitiesforratesandtaxesandservices.Thisdirectlyimpactstheirabilitytopaybulkserviceproviders(includingEskom)andtofundinfrastructuremaintenanceandupgrades.Lackofco-ordinationSeveralmunicipalitiesareplanningnewgenerationcapacityprojects(bothowninplanningfornewinvestmentandpurchasesfromIPPs),withlittlereferencetowhatisbeingplannedgenerationcapacityinothermunicipalities,orthebroadernationalelectricitylandscape.Intheinterestsofco-ordinatednationalinfrastructureplanningandtheoptimumallocationofJETIPresources,itisdesirablethatthereisbettercommunicationandco-ordinationamongmunicipalities,sothatonenationalstrategyisinplace,ratherthanmultiple,fragmented,andincoherentenergygenerationinvestments.InefficienciesinElectrification(includingsolutionsforremoteareaswheregridconnectionisimplementationofnotfeasible)iscurrentlyfundedbytheINEPgrant.However,expenditureandINEP(electrification)implementationofthegrantneedstobeimprovedbeforeadditionalfundingcanbeallocatedtothisoutput.262JETImplementationPlan2023–2027Chapter10:MunicipalitiesHowtheconcernsareaddressedNTiscurrentlyinprogresswithacomprehensivereviewofallaspectsofthemunicipalfiscalframework(includingelectricitypricing).Thisreviewisduetobefinalisedinmid-2025.AnimportantpartofthemandateoftheproposedJETMunicipalCouncilwillbetoprovideinputtotheNTprocess,andtoensurethatthereisclosecollaborationbetweenNTandNERSAinrespectofresolvingthecontradictionsinmunicipaltariffsetting.Supporttomunicipalitiestocompletedetailedandaccuratecost-of-supplystudiesisincludedinthefirst12monthsoftheImplementationPlan.TheImplementationPlanproposestheestablishmentofaplatformacrossmunicipalitiestoimproveco-ordinationandco-operation.NTiscurrentlyinprocessofreviewingalloftheconditionalgrants.Thisisduetobecompletedbymid-2024.Recommendationsinrespectofincreasingeffortsaroundelectrificationwillbebasedonthefindingsofthatreview.JETImplementationPlan2023–2027263TheImplementationPlanroadmapisfocusedondeliveringthegoalsofthemunicipalchapteroftheJETIP,takingintoaccounttheconcernsofstakeholderssummarisedinTable37.Theroadmapisbasedonthefollowingfiveguidingprinciples:1.Anagileandflexibleapproachisrequiredtoensurethatmunicipalitiesatdifferentstagesoftransitionreadinesscanbeaccommodated.Thosewithahighstateofreadinessshouldbeallowedtoprogressasswiftlyastheycan,whilethosewithalowerlevelofreadinesswillproceedatamoremeasuredpace,commensuratewithcapability.Inaddition,smaller(andlesswealthy)municipalitieswillgenerallyrequiredifferentfundingsolutionsfromlargermunicipalities.A‘one-size-fits-all’rigidapproach–tobothfundingandcapabilitydevelopment–isthustobeavoided,sincethedetailsofwhatisrequiredinonemunicipalitywillvaryconsiderablyfromwhatisrequiredinanother.Themostappropriatemunicipalenergytransitionimplementationplan,therefore,isonethatbestfitsthespecificdetailsofthelocalcontextofaparticularmunicipality.2.Giventhenecessityoflocal-contextspecificsolutions,andtheimportanceofincorporatingthejusticecomponentsofthenationalJETFramework(notablyproceduraljusticewhichrequiressignificantcommunity/stakeholderparticipationinsolutiondesign),co-creation111oflocalcontext-reflectivemunicipalenergytransitionstrategieswillbeencouraged.Co-creationasanapproachtopolicyandprogrammedesignhasmultipleoperationalbenefits,includingbetterproblemscopingandbroad-basedsupportforimplementationofprogrammes,bothofwhichincreasethelikelihoodofsuccess.112Aco-creationapproachtoprogrammedesignalsoreflectsthenewapproachtowardscapabilitydevelopmentinmunicipalitiessupportedbyNT.1133.Aninitialfocusonthe20largestmunicipalitiesinthesector,whichaccountforcloseto90%ofmunicipalelectricitydistribution.4.Theadoptionofasequencedapproachinimplementation,toensurethatasolidcapabilityandgovernancefoundationisinplaceforeachmunicipalitypriortotheallocationoffunding,andtheprogressiveincreaseoffunding.Forthemajorityofmunicipalities,capabilitydeficitsmustbeaddressedpriortotheallocationofsignificantamountsofnewfundingforinfrastructureinvestment.Ifthisisnotdone,thereisasignificantriskthatfundswillnotbeappliedinthemostproductivemanner.Additionally,infrastructuredevelopmentplansshouldbebasedondetailedenergyscenarioplans,whichinturnreflectlong-termsocio-economicdevelopmentgoals,aswellasdetailedquantificationsofcurrentmaintenancebacklogs.111Inthiscontext‘co-creation’isintendedtomeandeeplycollaborativeapproachestowardspolicyandprogrammedesignthatincludeawiderangeofcommunitiesandstakeholdersfromtheverybeginningoftheprocess.Thatis,co-creationimpliesthatawiderangeofimpactedgroupsparticipatedirectlyinallaspectsofpolicyandprogrammedesignandimplementation.Thisisaverydifferentapproachfromcurrentmodelsof‘communityparticipation’,wherepoliciesaregenerallywrittenwithintheState,byasmallteam/department,andthenselectedstakeholdershavetheopportunitytomakecomments.112McGann,M.,Wells,T.,&Blomkamp,E.(2021).Innovationlabsandco-productioninpublicproblemsolving.PublicManagementReview,23(2):297–316.113(https://www.treasury.gov.za/publications/other/National%20Treasury%202022%20System%20of%20Capacity%20Building%20for%20Local%20Government%20Diagnostic%20Review.pdf).264JETImplementationPlan2023–2027Chapter10:Municipalities5.Avoidduplicationandfragmentation.ThereiscurrentlyworkunderwayacrosstheStateinseveralareasdirectlyrelatedtothedeliveryofthemunicipalcomponentoftheJETIP.Themostimportantofthesecurrentinitiativesarethefollowing:ƒAcomprehensivereviewoftheLocalGovernmentFiscalFramework(includingrevenuemodelsandelectricitypricingstrategies)isinprogressbyNT.Thisreviewincludesanassessmentofhowtoimprovetheimplementationofallthefreebasicservices,includingtheFBE.Thereviewisscheduledtobecompletedinmid-2025(althoughsomerecommendationsmaybereleasedpriortothatdate).ƒNTisalsointheprocessofacomprehensivereviewoftheentireconditionalgrantstructure.Thisreviewincludesallgrantsacrossbothprovincialandmunicipalspheres.Asproposedbelow,onepossibilityforfundingthemunicipalJETisanewconditionalgrantinrespectofelectricitydistributioninfrastructure.Additionally,addressingtheelectrificationbacklog(onecomponentofthemunicipalJETIP)iscurrentlyfundedfromaconditionalgrant–theINEPgrant.Theimplicationisthatthedetailsofthesepartsofthefundingstrategyformunicipalities(thatis,changestoINEPand/oranewcapitalexpenditureconditionalgrant)shouldbeinformedbyandincorporatedintotherecommendationsofthisreview,whichisdueforcompletioninmid-2024.ƒWorkisbeingundertakenbytheCitiesSupportProgramme(CSP)inrespectofsupportingmetrostodeveloplong-termenergyscenarios,whichshouldbedetailedenoughtosupportthedevelopmentofcomprehensiveinfrastructureinvestmentplans.JETImplementationPlan2023–202726510.3ImplementationPlanThemaincomponentsoftheImplementationPlanarethefollowing:10.3.1EstablishmentofInstitutionalArrangementsforImplementationItisproposedthataJETMCisestablishedtooverseetheimplementationoftheJETroadmapformunicipalities,toprovideleadershipinaninstitutionallyfragmentedenvironment,andtoconsolidatecapabilitydevelopmenteffortssoastomaximisetheefficiencyoffundingforthispurpose.TheJETMCwillalsoberesponsibleforliaisonwithandinputintocurrentgovernmentinitiativesthatdirectlyimpactmunicipalities(suchasthereviewscurrentlyinprocessbyNT).ThedetailsofthecompositionoftheJETMC,aretobefinalised,butthefollowingisproposed:„JETMCrepresentationtobefromthethreemainnationaldepartmentsresponsibleforoversightofenergyandrelatedmattersinlocalgovernment(NT,DepartmentofCooperativeGovernanceandTraditionalAffairs(COGTA),andDepartmentofMineralResourcesandEnergy(DMRE)),withmunicipalitiesrepresentedbytheSouthAfricanLocalGovernmentAssociation(SALGA),theAssociationofMunicipalElectricityUtilities(AMEU),anddirectmunicipaldelegates.OtherstakeholderstobepartoftheJETMCwillbeidentifiedduringtheprocessofestablishinganddefiningthemandateoftheCouncil.ThereisastrongpreferencewithinlocalgovernmentforthemajorityrepresentationonthisCounciltobefromlocalgovernment.„ASecretariatthatisresponsibleforensuringalignmentandintegrationofworkstreams.TheSecretariatwillalsohaveprimaryresponsibilityformobilisingfundingforthevariousworkstreams.„Anumberofworkstreamsbecreated,linkedtothemaincategoriesofactivitieslistedintheImplementationPlan.Theseworkstreamswillberesponsibleforoverseeingthedeliveryofrelevantactivitiesbutwillappointimplementingorganisationstodeliverparticularoutputs.(ItisenvisagedthatmostoftheseimplementingorganisationswillbeexistingentitieswithintheStatethatarecurrentlyengagedinrelevantactivities.)TheJETPMUinthePresidencywillfacilitateaninitialconferenceoftheabovementionedrole-playerstoco-createtheJETMC,theSecretariat,andtheworkstreams;andwillassistinmobilisingfundstosupportworkofthesestructures.266JETImplementationPlan2023–2027Chapter10:Municipalities10.3.2CapabilityDevelopmentandSupportAsindicatedabove,capabilitydeficitmustbeaddressedsimultaneouslywith/priortotheallocationofsignificantamountsoffunding.Thestartingpointforallcapabilitydevelopmentinitiativeswillbetoprepareadetailedassessmentofmunicipalreadinessinrespectofallaspectsoftheenergytransition–includingnewgenerationcapacityreadiness,thedetailsofcurrentmaintenancebacklogs,futuregridplanning,existingorganisationalcapacity,governanceandoversight,basicregulatoryframeworks,depthofcost-of-supplystudy,andawiderangeofotherfactors.Thisassessmentwillculminateinareadinessscoreforeachmunicipalityandwillbethebasisonwhichdetailedcapabilitydevelopmentstrategiesforeachmunicipalitywillbedeveloped.Itisfurtherrecommendedthat,aspartofthisreadinessassessment,adeliverymodelreviewintermsofSection77oftheMunicipalSystemsAct(MSA)isundertaken.Thiswilldeterminethemostappropriateservicedeliverymodeltobeimplemented,andfundingandcapabilitydevelopmentsupportwillbedirectedatsupportingthatfinaldeliverymodel.Oneofthepriorityfocusareasin2024(undertheproposedcapabilitydevelopmentinitiativesoutlinedabove)willbetoensurethatallmunicipalitiesareassistedtodevelopdetailedandaccuratecost-of-supplystudies.However,thelonger-termgoalistoensurethatthesestudiesaremerelythefirststepinaprocesstooptimisethecost-of-supply.114114Reducingcost-of-supplywillalsocontributetowardslowertariffs,whichinturnwillimproveaffordability.JETImplementationPlan2023–202726710.3.3FinancingAsignificantamountoffinancingisrequiredtomeettheambitiousJETIPtargetsinrespectofnewinfrastructureinvestmentinmunicipalities.Manymunicipalitiesarehighlyindebted,havepoorauditrecords,andlowlevelsofcapabilitytosuccessfullyfinance,design,andimplementambitiousinfrastructureprojects.Nonewinfrastructurefinancingwillbeavailabletomunicipalitieswhichdonotovercomethesechallengesorhavethiscapability,eitherinternallyorthroughanexternalagencymodel.Thesechallengesimplythatamulti-prongedapproachtowardsfinancingisadopted,basedonleveragingfundsfrommultiplesources,withanimportantroleforprivatesectorinvestment.Municipalitiesshouldbepositionedtotakemaximumadvantageoftheregulatoryspaceavailabletoleverageprivatesectorinvestmentenabledbythemunicipalborrowingframework.Strategiestoensurethatsmallermunicipalitiesareabletoaccessfunding(suchasviapooledarrangements)willcontributetospatialequityininfrastructure.Fundingvehicleswillbedesignedtoprovideincentivestomunicipalitiestoimprovecapabilityandgovernance,andtoallowhighcapabilitymunicipalitiesaccesstofinancerelativelyquicklytoproceedwithinvestments.Itisparticularlyimportantthatmunicipalitiesaimtomaximisetheirowninvestmentcontributionsfromtheirelectricityoperations,throughenhancedrevenuecollectionandreducingtheircost-of-supply.Thepossibilityofutilisingtheconditionalgrantsystemtoincreaseelectricitydistributioninfrastructurefundingtomunicipalitieswillbeassessed:acomprehensiveexercisetoevaluatetheentireconditionalgrantsystemiscurrentlyunderwaybyNT.Anyproposalsinrespectofusingconditionalgrantsasonesourceofmunicipalinfrastructurefundingshouldincorporatethefindingsandrecommendationsofthatwork.ThefinancingofthebroaderJETIPisexpectedtoresultinfinancialinnovationsasdifferentformsofcapitalarestructurallyblendedtomeettheinvestmentneed.Theseinnovationswillbeexpandedandappliedtoaddressthemunicipalrequirement.FromtheJETIPconcessionalloanpledgesmadetoSouthAfrica,therehasbeenlimitedappetitetodatetofundmunicipalinfrastructure.Nevertheless,results-basedfinancingmodelsmeritfurtherinvestigationformunicipalinfrastructure,andthereiswillingnessbyconcessionallenderstoexploretheseoptions.FurtherworkisneededwithNT,municipalities,andDevelopmentFinanceInstitutions(DFIs)tooptimiseblendedfinancingonacase-by-casebasis,usingpublicsectorgrants,concessionalloans,andprivatecapital.Considerationshouldalsobegiventousingdonorgrantsinde-riskingblendedfinancestructures.AsubstantialproportionofJETIPgrantsisallocatedtomunicipalcapacitybuildingandtechnicalassistance.268JETImplementationPlan2023–2027Chapter10:Municipalities10.4TheoryofChangeThemunicipalitiesportfoliofocusesonensuringthedistributionsideoftheenergytransition,thatmunicipalitiesarewell-positionedtoincreasetheshareofrenewablesintheirgenerationmix,andthatpoorhouseholdshaveimprovedaccesstoelectricity.TheimpactssoughtareimprovedeconomicopportunitiesfacilitatedbyhigherlevelsofRE(I01),improvedaccesstoaffordableelectricity(I03),withareductioninGHGemissions(I02),andco-benefitsinimprovedairpollution(I04).Theoutcomesintermsofchangesinperformanceneededoverthemedium-term(threetofiveyears)includesustainedimprovementinmunicipalcapabilitytoplan,design,implement,andmanageeffectivedistributiongrids(MT01),andanincreasedshareofrenewableelectricityinmunicipalelectricitysupply(MT02).Thisresultsinthereliabilityandsecurityofelectricitysupplyinmunicipalities(MT03),andincreasedaffordabilityofelectricity(MT04).Municipalitiesalsoneedregulatorycertaintyintariffsetting(MT05).Certaininstitutionalarrangementsandmunicipalcapabilityneedtobeestablishedintheshortterm(onetotwoyears).Theseshort-termoutcomesincludeaco-ordinationstructurewhichisdrivingtheprocess,suchasaJETMCandworkstreamsfunctioning(ST01).Fundingfordistributioninfrastructuremustbesecured(ST02),thenationalelectrificationplanaccelerated(ST05),withmunicipalcapabilitydevelopmentplansbeingimplemented(ST03).Toensureviability,municipalitiesneedtoundertakeacost-of-supplystudy(ST04)andestablishoneregulatoryauthoritytooverseeallmunicipalelectricitypricingandtariffsetting(ST07).Toensureaccessforthepoor,plansforimprovingthedeliveryofFBEneedstobeimplemented(ST06),withpoorerhouseholdshavinggreateraccesstoenergyefficientappliances(ST07).JETImplementationPlan2023–2027269Figure29:TheoryofChange–MunicipalitiesOUTPUTS(O)INPUTSO01O02bAssumptionsProposalforJETMCandWorkstreamsdevelopedPublicfinanceoperationalmechanismsastakeholderReviewofGrants/agreedengagementmodelwithmunicipalrevenuePhilanthropic/communitiesincludedbyNTcompletedCSI/ESDO02ontimefinanceWorkstreamsO04establishedandareMandates,rolesandReviewofINEPoperational;outputsandfundingneedsforconductedbyNTtargetsforeachagreedcapabilitydevelopmentaspartofreviewagreedofconditionalO03grantsFundersidentifiedO06forinfrastrucureandCapabilitysupportRecommendationscapacitydevelopmentimplementationplansonimprovingFBEdevelopedforeachcompletedbyNTO05municipalityReadinessassessmentSufficientfundingconductedoneachO08obtainedmunicipalityFundingsecuredforinfrastructureO07investmentsandShort-termassistancedeliverymechanismsprovidedtoalldesignedmunicipalitesoncostofsupplyO10NewgenerationO09co-ordinationplatformProgrammeagreedtoestablishedsubsidiselow-incomehouseholdaccessO12toenergyefficientPlantoimprovetheappliancesimplementationofFBEdevelopedO11MunicipalrevenueandelectricitypricingmodelthatsupportsthegoalsofJETestablished270JETImplementationPlan2023–2027Chapter10:MunicipalitiesSHORT-TERM(ST)MEDIUM-TERM(MT)JETIPIMPACT(I)OUTCOMESOUTCOMESChangesinsystemandcapacityChangesinbehaviourandperformanceST01JETMCandallworkstreamsMT01I01functioningSustainableimprovementinmunicipalcapabilitytoImprovedeconomicST02plan,design,implement,andopportunitiesfacilitatedFundingformunicipalmanageeffectivedistributionbyhigherlevelsofdistributioninfrastructuregridsrenewableelectricityavailableMT02I02ST03Increased%ofrenewableMunicipalcapabilityelectricityinmunicipalGHGemissionsdevelopmentplansarebeingelectrictysupplyreductionsimplementedMT03I03ST04ReliabilityandsecurityAllmunicipalitieshaveofelectricitysupplyinImprovedaccesstoaccurateanddetailedcost-municipalitiesaffordableelectricityof-supplystudiesMT04I04ST05IncreasedaffordableaccessImplementationofnationaltoelectricitySocial,economic,electrificationprogrammeisandenvironmentalacceleratedMT05developmentco-benefits,Regulatorycertaintyintariffe.g.improvedairqualityST06settingandregenerationPlansforimprovingFBEbeingimplementedWIDERIMPACTST07TransitiontoaLow-incomehouseholdshavelow-carboneconomyaccesstoenergyefficientandajust,climate-appliancesresilientsocietybymid-centuryST08OneregulatoryauthorityJETImplementationPlan2023–2027271establishedtooverseeallmunicipalelectricitypricingandtariffsettingAssumptions:Municipalitiesimplementrequiredprogrammes10.5SummaryofActivitiesandTimeframesTable38setsoutasummaryoftheinitialproposedactivitiesundertheMunicipalImplementationPlantogetherwiththeproposedinstitutionalownerofeach,withthePMUhavingoverarchingresponsibilityformanagingprogresstowardstheJETgoals.Table38:SummaryofproposedactivitiesundertheMunicipalImplementationPlanAreaofworkKeyoutputsProposedTimeframesinstitutionalownerInstitutional(participatingarrangementsorganisations)CapabilityEstablishmentoftheJETMCmandate,membershipPMUinbroadFebruary2024developmentandgoals,identificationofworkstreams,andconsultationwithallocationsofresponsiblepersonstoeachstakeholdersworkstreamIdentificationofinstitutionallocation(‘implementingJETMCCapabilityFebruary2024organisation’)foreachcomponentofcapabilityWorkstreamdevelopmentandagreementofmandatesCollationofallexistingandprevious(pastfiveJETMCCapabilityJanuary–Mayyears)researchandinitiativesrelatedtocapabilityWorkstream/2024developmentandsupportinlocalgovernmentimplementationelectricitysector(mappingofthesector)organisationDetailed‘readiness’assessmentconductedforJETMCCapabilityLargest20eachmunicipality,includingcapabilityaroundnewWorkstream/municipalities:generationprocurement,infrastructureplanningandimplementationJanuary–management,governanceframeworks,anddetailsorganisationSeptemberofexistingmaintenancebacklogsandorganisational2024capacity(includingMSASection77reviews)Balance:December2025Preparationofdetailedcapabilitysupport/JETMCCapabilityDecemberdevelopmentplansforeachmunicipalityWorkstream/2024(commencingwiththetop20)implementationorganisationPreparationofdetailedfundingrequirementsforJETMCCapabilityDecembercapabilitydevelopmentprogrammesWorkstream2024Short-termassistancetoallmunicipalitiesinrespectJETMCCapabilityJanuary–ofthedevelopmentofcost-of-supplystudiesWorkstream/Decemberimplementation2024organisation272JETImplementationPlan2023–2027Chapter10:MunicipalitiesAreaofworkKeyoutputsProposedTimeframesinstitutionalowner(participatingorganisations)MunicipalThisworkiscurrentlyinprogresswithinNTJETMCFinancingMid-2025revenue/roleWorkstream/NTofelectricitytariffsinmunicipalrevenueAddressThereisanexistingINEPgranttofundthisoutcome,DMRESeptemberelectrificationalthoughexpenditurehasnotbeenatfullgrant2024backloglevels;areviewofgrantperformanceformspartofNT(Conditional(proposalstheNTreviewofallconditionalgrants,andtheywillGrantReview)toimproveincludeINEPinthisexpenditureundertheexistinggrant)ImproveThisispartofthereviewoftheLocalGovernmentNTMid-2024implementationFiscalFrameworkcurrentlyunderway;ofFBErecommendationsinrespectofimprovingtheimplementationoftheFBEarelikelytobereleasedpriortothecompletionofthereviewImproveProgrammetosubsidiselow-incomehouseholdJETMCEnergyInitialproposalaffordabilityofaccesstoenergyefficientappliances(particularlyelectricityforforcooking)andtorecommendhowthiscanbeAccessWorkstreammid-2024low-incomelinkedtosupportinglocalmanufacturinghouseholdsthroughatargetedenergyefficiencyprogrammeFundingDetailedquantificationofindividualmunicipalJETMCFinancingTop20:JuneinfrastructurefinancingrequirementsWorkstream/DBSA2024Balance:June2025DevelopmentoffinancingstrategiestoleverageJETMCFinancingSeptember2024concessionalfinanceintoproductsformunicipalitiesWorkstream/DBSAAccessdonorfundingforcapabilitydevelopmentJETMCFinancingMarch2024programmeWorkstreamInvestigatethepossibilitiesoftheconditionalgrantJETMCFinancingDecembermechanismasafundingoptionWorkstream/NT2024JETImplementationPlan2023–2027273AreaofworkKeyoutputsProposedTimeframesinstitutionalowner(participatingorganisations)Co-ordinatedSetupashareddatabaseofplannedmunicipalJETMCCapabilityJune2024planninginvestmentsinand/orpurchasesofelectricityWorkstream/AMEUforandandencourageco-ordinationinplanningthroughdevelopmentofregulardiscussionsamongmunicipalitiesnewgenerationpurchases/investments10.6IndicatorsTable39:MunicipalJETIPimpact,objectives,andindicatorsMunicipalJETimpactObjectivesIndicatorsI1:ImprovedeconomicactivitiesIncreasedmunicipalGDPGDPgrowthfacilitatedbyhigherlevelsofIncreasedemploymentrenewableelectricityEmploymentrate(full-timeequivalent)l2:GHGemissionsreducedorEmissionsreducedoravoidedbyusetCO2eqperannumavoidedfromtCO2eqofREl3:ImprovedaccesstoaffordablePoorhouseholdshaveaccesstoaNumberofhouseholdsbelowelectricityminimumFBEallowanceof50kWhpertheupper-boundpovertylinehouseholdpermonththathaveaccesstoFBEl4:Socio-economicbenefits,suchAirqualityimprovesAirqualityasimprovedairqualityMedium-termoutcomesObjectivesIndicatorsMT01:SustainableimprovementMunicipalitiescanplanandmanageNumberofunplannedinmunicipalcapabilitytoplan,effectivedistributiongridselectricityoutages(annual)design,implement,andmanageeffectivedistributiongridsMT02:IncreasedpercentageofMunicipalitiesderivethemajorityofPercentageofrenewablesinrenewableelectricityinmunicipalelectricityfromrenewablesmunicipalelectricitymixbyelectricitysupply2027MT03:ReliabilityandsecurityofMunicipalelectricitysupplyisreliableNumberofunplannedelectricitysupplyinmunicipalitieselectricityoutages(annual)274JETImplementationPlan2023–2027Chapter10:MunicipalitiesMT04:IncreasedaffordableaccessAllpoorhouseholds(belowtheupper-Numberofhouseholdsbelowtheupper-boundpovertylinetoelectricityboundpovertyline)haveaccesstoFBEwithaccesstoFBEMT05:RegulatorycertaintyinAllmunicipaltariffsandfeesaresetbyNERSAistheonlyregulatorymunicipaltariffsettingNERSAauthorityauthorisedtoapprovealltariffsandfeeschargedbymunicipalitiesOutputsObjectivesIndicatorsO1&O2:JETMCandallJETMCisdriverofsectorreformCouncilisestablishedworkstreamsarefunctioningandeffectiveWorkstreamsareabletoimplementtheWorkstreamsareoperatinggoalsoftheImplementationPlanaccordingtomandateWorkstreamsdevelopastakeholderBroad-basedsupportengagementmodelthatincludescommunitiesO3:FinancingidentifiedforFinancingrequirementsaremetAmountoffundingsecuredinfrastructureandcapabilitydevelopmentO4:Mandates,roles,andfundingClarityondeliveryofandfundingforDetailedactivityplansforcapabilitydevelopmentagreedcapabilitydevelopmentprogrammesO5:ReadinessassessmentThestatusquoforeachmunicipalityisReadinessassessmentsconductedforeachmunicipalityclearandcaninformfuturesupportcompletedO6:CapabilitydevelopmentEachmunicipalityhasarelevantandCapabilitydevelopmentplanssupportplansdevelopedforeachdetailedcapabilitydevelopmentplancompletedmunicipalityO7:Short-termassistanceAllmunicipalitieshavecost-of-supplyNumberofcompliantcost-of-providedtoallmunicipalitiesonstudiesthatcomplywithregulatorysupplystudiescost-of-supplyrequirementsO8:FinancingsecuredforFinancingrequirementsforAmountoffundingsecuredinfrastructureinvestmentanddeliverymechanismsdesignedinfrastructureinvestmentsfortheperiodto2027aremetClearmechanismsfordeliveringDeliverymechanismsfinancingrequirementstomunicipalitiesoperatingareinplaceO9:ProgrammeagreedtoLow-incomehouseholdshaveaccesstoNumberofbeneficiarylow-subsidiselow-incomehouseholdaffordableenergy-efficientappliancesincomehouseholdsaccesstoenergyefficientappliancesJETImplementationPlan2023–2027275O10:Newgenerationco-ordinationMunicipalitiesco-ordinateplanningforPlatformestablishedandoperatingplatformestablishedincreasingtheshareofrenewablesinRevenueandpricingreformstheirenergymixClearplantoimprovedeliveryO11:MunicipalrevenueandAmunicipalrevenueandelectricityelectricitypricingmodelthatpricingmodelthatiscompatiblewithsupportsthegoalsoftheJETthegoalsoftheJETO12:PlantoimprovethedeliveryAllhouseholdsbelowtheupper-boundofFBEpovertylinereceiveFBE10.7RisksandDependenciesTable40:Riskdescription,impacts,andmitigationplansRiskdescriptionMitigationplanInherentimpactInherentratingInherentriskratingResidualriskratingReviewofmunicipal313JETMCworkscloselywithNTtoprovideLowrevenueframeworkbysupportasrequiredNTcompletedontimeCriticalreviewofINEP212JETMCworkswithNTtoensurethatallLowperformanceconductedanalysisoftheINEPgrantisundertakenasbyNTpartoftheoverallconditionalgrantreviewRecommendations313JETMCworkswithNTtoensurethattheLowonimprovingplancontainsworkablerecommendationsimplementationofFBEmostlikelytosucceedcompletedbyNTSufficientfunding339PrioritiseinterventionstoensurethattheHighobtainedbiggestimpactinterventionsarefundedfirst,whilesupplementaryfundingissourcedMunicipalitiesimplement339ThegreatertheinvolvementofmunicipalitiesHighinallaspectsofdesigningthemandatesrequiredprogrammesandprogrammesoftheworkstreamsandthedetailsofimplementation,thegreaterthelikelihoodofbuy-inthatwillsupportsuccessfulimplementation.SupportthroughtheframeworksetoutintheIntergovernmentalRelationsFrameworkAct(2005),andacollaborativeapproachacrossdifferentspheresofgovernmentKey:3=high,2=medium,1=low276JETImplementationPlan2023–2027Chapter10:MunicipalitiesAnnexureA:MunicipalitieswithNERSAdistributionlicenseAbaqulusiLMEphraimMogaleLMMamusaLMNquthuLMAlbertLuthuliLMeThekwiniMetroMagarengLMOudtshoornLMAmahlatiLMGamagaraLMMakanaLMOverstrandLMBa-PhalaborwaLMGariepLMMakhadoLMPhokwaneLMBeaufortWestLMGa-SegonyanaLMMaluti-a-phofungLMuPhongoloLMBela-BelaLMGeorgeLMMandeniLMPhumelelaLMBergrivierLMGovanMbekiLMMantsopaLMPixleyKaSemeBitouLMGreatKeiLMMaquassiHillLMPolokwaneLMBloubergLMGreaterKokstadLMMasilonyanaLMPrinceAlbertLMBlueCraneRouteLMGreaterLetabaLMMatatieleLMRamotshereMoiloaLMBreedeRivierwinelandsGreaterTaungLMMatjhabengLMRandWestCityLMLMGreaterTzaneenLMMatzikammaLMRaymondMhlabaLMBreedeValleyLMHantamLMMbizanaLMRenosterbergLMBuffaloCityMetroHessequaLMMbombelaLMRichtersveldLMCapeAgulhasLMHibiscusCoastLMMerafongLMRustenburgLMCederbergLMInxubaYethembaLMMetsimaholoLMSakhisizweLMCentlec(MangaungJBMarksLMMidvaalLMSaldanhaBayLMMetro)JoeMorolongLMMkhondoLMSenquLMCityPower(JohannesburgKaiGaribLMModimolle-MokgopongSetsotoLMMetro)KamiesbergLMLMSiyacumaLMCityofCapeTownMetroKannalandLMMogalakwenaLMSiyathembaLMCityofTshwaneMetroKareebergLMMogaleCityLMStellenboschLMDawidKruiperLMKarooHooglandLMMolemoleLMSteveTshweteLMDihlabengLMKgatelopeleLMMoqhakaLMSundaysRiverValleyDikgatlongLMKgetlengRivierLMMosselbayLMSwartlandLMDipalesengLMKhaiMaLMMpofanaLMSwellendamLMDitsobotlaLMKingSabataDalindyeboMsukaligwaLMThabaChweuLMDrBeyersNaudeLMLMMthonjaneniLMThabazimbiLMDrakensteinLMKnysnaLMMusinaLMTheewaterskloofLMeDumbeLMKou-KammaLMNalaLMThembelihleLMEkurhuleniMetroKougaLMNalediLMTsantsabaneLMEliasMotsoalediLMKwaDukuzaLMNamaKhoiLMTokologoLMElundiniLMLaingsburgLMNdlambeLMTswaingLMeMadlangeniLMLekwaLMNelsonMandelaBayTswelopeleLMEmakhazeniLMLekwaTeemaneLMMetroUbuntuLMEmalahleniLM(EC)LephalaleLMNewcastleLMUlundiLMEmalahleniLM(MPU)LesediLMNgwatheLMUMgeniLMEmfuleniLMLetsemengLMNkandlaLMUmhlatuzeLMEmthanjeniLMMadibengLMNketoanaLMEndumeniLMMafubeLMNkomaziLMEnochMgijimaLMJETImplementationPlan2023–2027277AnnexureB:Currentlevelsofmunicipalexpenditureoninfrastructuremaintenance,repairs,upgrading,andrenewalMETRORENEWALUPGRADINGR&MTOTALBuffaloCity885811000039906138487NelsonMandelaBay558963444957375147720Mangaung1548016219420435903Ekurhuleni34659609570391303635Johannesburg24462414375510375101425889Tshwane59200105589329147493936eThekwini34886201325661843898054CapeTown432102680495457271045878Totalmetros127736557938636327515489502NATIONAL1695600101284263477999056241Source:NationalTreasuryMunicipalFinanceManagementActNo.56of2003(MFMA)data(2022,Medium-TermRevenueandExpenditureFramework(MTREF).278JETImplementationPlan2023–2027Chapter10:MunicipalitiesJETImplementationPlan2023–2027279280JETImplementationPlan2023–2027Chapter11:MONITORINGANDEVALUATIONSYSTEMANDRISKMANAGEMENTFRAMEWORK281PURPOSEThepurposeofthischapteroftheJETImplementationPlanisto:„describetheapproachandprocesswhichhasbeenadoptedforthemonitoring,evaluation,andlearning(MEL)ofJETIPimplementation„summarisethecomponentsofJETIPimplementationthatmakeuptheMELsystem„tabulatetheoverallindicatorsthatwillbetrackedtomeasureJETIPimplementationimpactsandoutcomes„setoutkeyrisksfortheimplementationoftheJETIPandconfirmtheprocessforriskmanagement.282JETImplementationPlan2023–2027Chapter11:MonitoringandEvaluationSystemandRiskManagementFramework11.1Monitoring,Evaluation,andLearningSystemApproachandProcessThemonitoring,learning,andevaluation(MEL)systemfortheJETImplementationPlanprovidesthemechanismforaccountability,externalandinternaltrackingofprogress,problem-solving,andlearning.ThepurposeoftheMELsystemisthefollowing:„EnhancetransparencyandaccountabilityonprogresswiththeJET,andhowresourcesarespent„Tracktheoutcomesandimpactsachievedfromtheprogrammesandprojectsimplementedandusethistoprovideusefulfeedbacktoimprovepolicyanddecision-making.ThefollowingapproachhasbeenadoptedfortheJETImplementationPlanMELsystem:„Itisasub-systemofabroaderJustTransitionMELsystemwhichisunderdevelopment.„ItisbasedonaTheoryofChangeofhowtheJETwouldbeachieved.„Itisdevelopedincollaborationwithkeystakeholders,sothatthehigherlevelsoftheframeworkaresharedacrosstheState.„Itcomplementsandbuildsonexisting/relatedtrackingeffortsingovernment.„Itdecentralisesresponsibilityformonitoringportfoliostotherelevantleadinstitutions.„Itfocusesonmaximisingimpactandcontinualimprovement.„Itisaccessibleandtransparenttothepublic.„GiventheimportanceofproceduraljusticetoSouthAfrica’sJET,itincludessystemsofparticipatorymonitoring,evaluation,andlearning.EachPortfoliooftheJETImplementationPlan,willhaveitsownMELprocess,ledbytherelevantinstitution.EachPortfolioinvolvesco-ordinationstructureswithanumberofkeyrole-players,withworkstreamsinvolvingmultipleprogrammesandprojects.Basedonengagementswithstakeholders,theJETImplementationPlanincludesaTheoryofChangeforeachPortfolio,andadraftsetofindicatorsforimpact,outcomes,andoutputs.TheleadinstitutionofeachPortfoliowillneedtousethisgroundworktodesignandmanagetheMELsystemforthePortfolio,reportingquarterlytoitsco-ordinationstructureandtotheJETPMUtotrackoverallprogress.Tothisend,eachPortfoliowill:„Confirmthatreliabledataisavailableforeachindicator„Agreeannualmilestones„Trackoutputsandshort-termoutcomesquarterlyJETImplementationPlan2023–2027283„Trackmedium-termoutcomesannually„ReportonimpactsfortheJETIPoverall.TheJETPMUwillconveneaMELworkinggroupwithrepresentativesfromeachPortfoliotoco-ordinatetheworkandproblem-solve.TheprocessofdevelopingtheJETIPMELsystem,asasub-systemwithinawiderJustTransitionMELsystem,involvesongoingcollaborationwithotherstoensureintegration.ThePMUispartofamonitoringandevaluation(M&E)workinggroupconvenedbythePresidentialClimateCommission(PCC),includingtheDepartmentofForestry,FisheriesandEnvironment(DFFE)andDepartmentofPlanning,MonitoringandEvaluation(DPME),whichisdevelopingasharedapproachtomonitoringandevaluatingtheJET.ThisincludesdevelopinganoverallTheoryofChangefortheJustTransitionbyearly2024,inwhichtherolesofvariousinstitutionsarespecified,eachhavingarelatedTheoryofChange,butwithsharedindicatorswhereverpossible.ThePMUisalsoworkingwithgovernmentanddevelopmentpartnerstoconfirmdatasourcesandreportingrequirements.Thiscollaborativeprocesswillbeongoingtodevelopasharedlearningandevaluationagendaacrossthestateandwithdevelopmentpartners.284JETImplementationPlan2023–2027Chapter11:MonitoringandEvaluationSystemandRiskManagementFramework11.2ComponentsoftheMonitoring,Evaluation,andLearningSystemTherearefourkeycomponentsoftheoverallMELsystem:TheTheoryofChange;theM&Eframework;theprojectsregister;andthelearningandevaluationsystem.11.2.1TheoryofChangeFigure30showsanoverallTheoryofChangethathasbeendevelopedfortheworkofthePMU.ThisisbeingtestedwiththePCC,DFFE,DPME,andDepartmentofMineralResourcesandEnergy(DMRE).ThePMUisworkingwiththeseinstitutionstoestablishcommonalityacrosssystems,andonthehigher-leveloutcomesandimpactstargetedfortheJustTransition,towhichdifferentinstitutionscontributeparts.ThePMUcomponentfocusesonclimatechangemitigation.ThenarrativesummaryoftheTheoryofChangeisprovidedinChapter4(section4.2).ATheoryofChangehas,inturn,beendevelopedforeachPortfoliooftheJETImplementationPlan,aspresentedintheprecedingchapters.ThislaysthegroundworkfortheleadinstitutionofeachPortfoliotofurtherdeveloptheportfolio-specificM&Eprocesswiththeirrespectivestakeholders.JETImplementationPlan2023–2027285Figure30:TheoryofChange–PMUSHORT-TERM(ST)OUTCOMESOUTPUTS(O)ChangesinsystemandINPUTSO01:FinancingoptionsAssumptionscapacityandflowsprovidedPublicandDivergentviewsST01grantfinanceO02:FinancingdonotparalysePMUteamagreementsformulateddecision-makingAgreedPresidencytransparentmandateO03:CriteriaandChangesinfundingflowsgovernancesystemsforSouthAfricaandforidentifiedJETJTprojectdeveloped,internationalprojectsincludingaddressingpartnersdonotpossiblerentseekingcreateuncertaintyST02andundermineO04:ProposalforpartnersupportCo-ordinationFFagreedandmechanismsimplementationelementsSufficientskillssupportingdefinedtoanalyse,theJETcoordinate,ImplementationO05:ProjectpipelinefacilitatePlan’effectivelycompiledFiscalST03O06:Co-ordinationdeteriorationdoessystemsingovernmentnotundermineJETConfirmedandwithstakeholdersIPprogressportfolioofJTestablishedinterventionsagreedO07:JETplansdevelopedwithengagementofST04stakeholdersJETFFhelpingO08:Problem-solvingdevelopmentofinterventionstomobilise,viableprojects,deployfunds,andspeedandpipelineupimplementationbeingsupportedactivelyO09:Proposalsforchangestopolicy,ST05regulation,andlegislationDemonstratedO10:M&Esystemproblem-solvingoperating,supportingapproachestransparency,learning,andtoovercomedecision-makingbottlenecksO11:KnowledgeST06managementandcommunicationonSufficientsuccesses/lessonscompliantprogrammesbeingimplementedtodemonstratethiswayofworking286JETImplementationPlan2023–2027Chapter11:MonitoringandEvaluationSystemandRiskManagementFrameworkMEDIUM-TERMJETIPIMPACT(I)(MT)OUTCOMESI01ChangesinbehaviourandNewREgeneration/performancetransmission/distributionimplemented(GW)Assumptions:MT01Assumptions:I02JTinterventionsInsufficientFinanceforJETIPUnbundlingofimplemented,absorptivebeingmobilised,Eskomiseffectivedemonstratingspreadcapacitydoesnotdeployed,andofbenefitstopinvestmentimplementedrapidlyGridcapacitydoesI03andeffectivelynotundermineREGHGemissionsUnbundlingofroll-outreductionsEskomiseffectiveMT02I04TradebarriersdoIncreasedeconomicNomajorpolicyWidespreadnotunderminediversificationandchangethatendorsementbySouthsupplyofinclusivegrowthunderminesJETIPAfricaandinternationalequipmentandI05stakeholdersofthematerialsSocial,economic,andCorruptiondoesJETIPandtheJETenvironmentalco-notderailtheImplementationPlanOngoingsocialbenefitsprogrammerisksdonotaffectMT03implementationWIDERIMPACTCapacityoforgansofstateimprovesGovernmentandNomajorpolicyTransitiontoaotherstakeholderschangethatlow-carboneconomySufficientincreasinglyabletounderminesJETandajust,climate-institutionstomanageanddeliverIPandtheJETresilientsocietybymediatetheJustTransitionImplementationmid-centurytransitionPlanMT04CorruptiondoesEnhanceskillssystemnotderailtheworkingeffectivelyprogrammetosupporttheenergytransitionSkillsshortagesandeconomicintheeconomydiversificationdonotundermineabilitytoimplementSufficientinstitutionstomediatethetransitionJETImplementationPlan2023–202728711.2.2Monitoring,Evaluation,andLearningFrameworkandIndicatorsAMELframeworkhasbeendraftedfromtheTheoryofChangewiththelogicchainandindicatorsasshowninTable41.Indicatorsarebeingrefinedwithstakeholdersforthehigher-leveloutcomesandimpactstoensure,whereappropriate,thesearecommon,andtoestablishwhoissupplyingthisdata.Consistentindicatorsareneededforwidersystemintegration.Therewillbeadashboardusingselectedindicatorsfromthisframeworkandtrackingofprogresswillbepublic.Thesource/meansofverificationforeachindicatorisbeingestablishedandagreedmilestoneswillbeconfirmedwiththerelevantpartiesthereafter.Table41:IndicatorstobetrackedforJETIPoverallNarrativesummaryObjectiveReducedcarbonemissionsWiderimpactTransitiontoalow-carboneconomyandajust,climate-resilientsocietybymid-centuryReducedenergyuse(notelectricity)Highlevelsofemployment/self-employmentinMpumalangaJobsinREasashareofemploymentintheenergysectorImprovedhumanhealthImprovedcommunitylivelihoods116andreducedvulnerabilities115Notinstalledcapacitybutactualgeneration.116Bearinginmindthehuman,social,natural,physical,andfinancialcapital,soawiderperceptionofwell-beingthananincomelens.288JETImplementationPlan2023–2027Chapter11:MonitoringandEvaluationSystemandRiskManagementFrameworkIndicatorNDCtargetsforGHGemissionsGHGemissionspercapitaCO2intensityofnationalenergyconsumptioncomparedtonationalgrossdomesticproductGDPShareofREgeneration(GWh)115inSouthAfrica’spowersystem(%)EnergyuseforsectorsEnergyconsumptionsavedbyenergyefficiencymeasures(GWh/year)LevelsofunemploymentinMpumalangastabilisedanddroppingcomparedtonationalaverageJobsintherenewableREsub-sectorasapercentageoftotaljobsintheenergysectorLevelsofrespiratoryillness(asthma,etc.)Multi-dimensionalpovertylevelsimprovinginMpumalangaJETImplementationPlan2023–2027289NarrativesummaryObjectiveJETIPimpactNewREgeneration,transmission,TotalinstalledcapacityofREplantsdistributioninfrastructureconstructedorupgradedTotalinstalledcapacityofsmall-scaleREplantsTransmissionlineupgradedorextendedGrid-supportinfrastructureprojectsdeveloped(transformersandsub-stations)DistributioninfrastructureupgradedorextendedEnergystorageinstalledEVchargingstationsinstalledJTinterventionsimplementedJobscreatedormaintainedfromJETIPinvestmentsdemonstratingspreadofbenefitsHouseholdsbenefittingfromlivelihoodssupportinMpumalanga’scoaldistrictsCoalworkershavesustainedincomeandlivelihoodsPopulationintransitionareasbenefittingfromJETIPinvestmentsEffectivegovernmentservicesinaffectedcommunities,notablyinMpumalangaLevelofengagementandparticipationoflocalcommunitiesaffectedbythetransitioninterventions117Note:Canalsomeasureactualgeneration(PSPVIEI1).118ACTIPindicatorandtarget.290JETImplementationPlan2023–2027Chapter11:MonitoringandEvaluationSystemandRiskManagementFrameworkIndicatorTotalinstalledcapacityofREplantsundertheREIPPprogramme(MW)TotalinstalledcapacityofembeddedREgeneration(MW)Totalinstalledcapacityofsolarphotovoltaics(PV)117kmNumberkmEnergyrating(MWh)andpowerrating(MW)ofinstalledenergystorageNumberNumberofnon-permanentdirectfull-timeequivalent(FTE)jobscreatedormaintainedduringconstructionNumberofdirectFTEjobscreatedormaintainedafterconstructionNumberofFTEstaffemployedtoimplementresidentialsolarprojectsNumberofFTEstaffemployedinsupplychainsforRENumberofnewFTEstaffemployedintourism,transport,andagricultureNumberofhouseholdsbenefittingfromlivelihoodssupportinMpumalanga’scoaldistrictsNumberandpercentageofcoalworkerstransitioned(retired,jobnumbers,andjobtypes)Numberandpercentageofemployeesofretiredcoalplantsthathaveaccesstosustainedincome(genderdisaggregated)118PercentageofMpumalangapopulationbenefittingfromJETIPinvestmentsPercentageofhouseholdsinMpumalangawithworkingwaterservicesPercentageofhouseholdsinMpumalangaaccessingreliableelectricityPercentageofpeoplequalifiedforFBEactuallyreceivingPublicfeelengagedinpolicyandcollectiveactiontoimplementJTJETImplementationPlan2023–2027291NarrativesummaryObjectiveEmissionsreducedoravoidedbycoalpowerplantclosuresGHGemissionsreducedoravoidedEmissionsreducedoravoidedbysectorinterventions(tCO2eqp.a.)from(tCO2eq)119IncreasedeconomicdiversificationElectricitysavedEnergyEfficiencyandDemand-sideManagementandinclusivegrowthProgrammeEconomicdiversificationanddevelopmentofneweconomyvaluechainsinthecountry,stimulatedbyJETIPinvestmentGrowthinthenumberandcontributionofSMEstotheMpumalangaeconomySocial,economic,andenvironmentalReductioninairpollution,waterpollution,landdegradation,co-benefits120improvedecosystems,andbiodiversityMedium-termoutcomes121FundsspentonJETIP-relatedinvestments/activitiesFinanceforJETIPbeingmobilised,unlocked,andspentrapidlyandeffectivelyWidespreadendorsementbySouthEndorsementoftheJETImplementationPlanacrosstheSouthAfricaandinternationalstakeholdersAfricangovernmentoftheJETImplementationPlanEndorsementbyawiderangeofSouthAfricanstakeholdersEndorsementfrominternationalpartners119JETIPmentionsenergy,industrial,andtransportsectors.120Considerpolicieswhichimpactonco-benefits.121Changesinbehaviourandperformance.122SubstantiallymorefavourablethanwhatNTcanborrowonthecapitalmarkets.292JETImplementationPlan2023–2027Chapter11:MonitoringandEvaluationSystemandRiskManagementFrameworkIndicatortCO2eqp.a.EmissionsreducedoravoidedfromREelectricitygenerationEmissionsreduced/avoidedbyNewElectricVehicles(NEVs)(publicandprivate)EmissionsreducedthroughTransnetroad-to-railprogrammeEmissionsreducedoravoidedfrommoresustainableagricultureEmissionsreducedoravoidedthroughtheMunicipalEnergyEfficiencyandDemand-sideManagementProgrammeValueofmanufacturinginSouthAfricaofsolarPVsystems(PVcells,batteries,andinverters)Numberofelectricvehicles(EVs)manufacturedinSouthAfrica(buses,taxis,cars)NumbersofSMMEsEmploymentinSMMEs(FTE)HectaresoflandaffectedbycoalminingrehabilitatedLandredistributedforeconomicdiversification(hectares)Airpollution(PM2.5concentrations,SO2levels)Watermadeavailablefromcoalplantclosures(millionlitres)Grantfundsspent(Rand)Publicsectorbudgetsallocated(Rand)Concessionalloansdeployed122(Rand)DevelopmentFinanceInstitutions(DFIs)commercialloans(Rand)Commercialfinancedeployed(Rand)AllkeygovernmentstakeholdersendorsetheJETImplementationPlanPublicexpressionsofsupportfortheJETImplementationPlanbythePCC,business,labourandcivilsocietyorganisationsAdditionalpartnersjoiningtheIPGandsupportingtheJETImplementationPlanJETImplementationPlan2023–2027293NarrativesummaryObjectiveCoherentplansbeingimplementedforJETPortfoliosGovernmentincreasinglyabletoGovernmentinstitutionsproactivelyleadingJETIPinitiativesmanageanddeliverJTMpumalangaProvinceleadingacoherentprogrammetosupportJTeffectivelyEnhancedskillssystemworkingSkillssystemiseffectivelyadjustingandrespondingtochangingeffectivelytosupporttheJETskillsneedsenergytransitionandeconomicdiversificationSkillsDevelopmentZones(SDZs)operatingeffectively,supportingskillsdevelopment,communityliaison,andlinksbetweeninstitutionsShort-termoutcomes124AgreedtransparentfundingflowsforInstrument,disbursementchannel,andreceivingprogrammewithinidentifiedJETportfoliofocalareasagreedCo-ordinationmechanismsCo-ordinationmechanismsareworkingeffectivelysupportingtheJETImplementationPlaneffectively123ACTIPhasnumbersofpeopletrainedintheREsector,medium-andhigh-skilledGreenjobs,STEMeducation,andrelevantvocationaltrainingthroughJETIP(genderdisaggregated).124Changesincapacityandsystems.294JETImplementationPlan2023–2027Chapter11:MonitoringandEvaluationSystemandRiskManagementFrameworkIndicatorAllportfolioplansbeingimplementedGovernmentinstitutionsinitiate,drive,andoverseekeyprogrammesorprojectsthatdirectlyalignwiththegoalsandprinciplesoftheJETIPMpumalangaJETActionForumandSecretariatoperatingeffectivelytoleadJTworkintheprovincePipelineofinterventionsinMpumalangabeingdriveneffectivelyNumberofworkersinalltheprioritysectors(energy,supplychains,tourism,agriculture)reskilled,upskilled,and/orretrained123NumberofpeopletrainedabsorbedintoemploymentAgreedforelectricityinfrastructureAgreedforACTIPAgreedforMpumalangaAgreedforNEVsAgreedforGH2AgreedforSkillsAgreedforMunicipalitiesAgreedforEnergyefficiencyAgreedforREindustrialisationAgreedforRoad-to-railIMCandSteeringCommitteemeetingandendorsingtheworkNationalJETSkillsPlanningForumoperatingSDZsoperatingNEVJETCoordinatingStructureoperatingMunicipalJETCounciloperatingGreenHydrogenJETCounciloperatingMpumalangaJETActionForumoperatingACTIPsteeringmechanismoperatingEskom/NTCSAisimplementingtheTransmissionDevelopmentPlanJETImplementationPlan2023–2027295NarrativesummaryObjectiveConfirmedportfolioofJTConfirmedportfolioofJTinterventionsagreedwhichempowerlocalinterventionsforMpumalangaagreedstakeholders(proceduraljustice)FinancingFacilityhelpingFinancingFacilityoperatingtosupportprojectdevelopmentanddevelopmentofviableprojectsandidentificationoffunderspipelinebeingsupportedactivelyPotentialprojectsareprogressedasfastaspossiblewhilemaintainingqualityDemonstratedproblem-solvingProblemsresolvedtowhichPMUhavecontributedapproachestoovercomebottlenecksSufficientcompliantprojects/JETIPinterventionsunderwayineachPortfolioprogrammesbeingimplementedtodemonstratethiswayofworking11.2.3JETProjects’RegisterTheJETPMUisestablishingaJETProjects’RegistertomakevisiblewhatprojectsarebeingfinancedthroughtheJETIPinvestments,andtotrackandanalysetheirprogressandoutcomes.TheregisterworkhasstartedbycompilingthegrantscomponentoftheJETIPfinancing.TheJETProjects’RegisterisintendedtoshowthestatusofJETprojectimplementationbydeliveryinstitutions,andtheirdevelopmentoftheJETprojects’pipelinesineachPortfolio.Theregisterrecordscategoriesofinformationforeachprogramme/projectincludingpurpose,priorityarea,typeofactivity,stage,amounts,implementinginstitution,andsoon.Thisenablesanalysisacrosstheinterventions.AsetofcoreMELrequirementswillalsobedefinedforallprojects,providingasetofkeydataforprojectstoreportonandmakingtheseavailableinapubliclyaccessibledatabase.11.2.4EvaluationandLearningFrameworkAnevaluationandlearningframeworkisindevelopment.Itwillidentifythelearningsystemsneededaspartofbasicmonitoring,andthedeeperJETlearningsystemsrequired.Thisinvolves296JETImplementationPlan2023–2027Chapter11:MonitoringandEvaluationSystemandRiskManagementFrameworkIndicatorEmergentmodelsofviableJTinterventionsbeingtestedNumberandvalueofJTinterventionsunderway(repurposingofpowerstations,economicdiversification,establishmentofMpumalangaSDZ,landandwaterregeneration)Extentofcommunityinvolvementandownershipofcommunity-basedJTinterventionsNumberandvalueofprojectssupportedtoprojectapprovalstageDisaggregatednumbersofbeneficiariesfromprojectssupported(gender,age,race)Trendsonplanned/approved/disbursedJETprojectsModeloffundingoftransmissionagreedViableapproachagreedtoimplementingACTIPModelagreedforfundingdistributioninfrastructureLocalDFIsupportagreedforelectrifyingpublictransportandlogisticsViableapproachagreedtoaddressintegrationofskillsanticipation,skillsdevelopment,andutilisationViablesetofimpactfulprogrammesagreedwithstakeholdersforMpumalangaKeycatalyticprojectsunderwayineachportfolio(projectstobedefined)JETImplementationPlan2023–2027297establishingmechanismsforfeedbackfromdifferentspheresandstakeholders,includingthecommunitiesaffected.Theevaluationplanwillfocusonsignificantoutcome/impactevaluationsafterthreetofiveyears(andanybaselines)andprovideforresponsiverapidevaluationsforin-depthanalysisofbottlenecksandopportunities,rapidfeedbackonwhatisworking/notworkingandchangesneededfordecision-making.Thisevaluationplanwillbedevelopedincollaborationwithkeystakeholders(notably,thePCC,DFFE,DPME,DMRE,NT)sothatacoherentsetofevaluationsareconductedtoinformpolicy,planning,andbudgeting.TheJETIPevaluationandlearningframeworkwillbeanimportantdriverofevaluationdemandwithinthewiderJustTransitionMELSystem.11.3RiskManagementFrameworkKeyriskshavebeenidentifiedwhichaffecttheTheoryofChangeandcouldthusunderminetheJETImplementationPlan.Thefollowingarethekeyrisksrelatedtotheoverallmedium-termoutcomesandimpacts:„UnbundlingofEskomisnoteffective„Delaysindecommissioningofcoalpowerplantschangesthedecarbonisationtrajectory„TransmissionanddistributiongridcapacityconstraintsundermineREroll-out„Insufficientabsorptivecapacityleadstobilateralconcessionalloansnotbeingapproved„Insufficientgrantfundingtoaddressthescaleofneedforthisinstrument„Tangiblecommunity-levelbenefitsarenotachieved„Skillsshortagesunderminetheabilitytoimplement„PolicychangesunderminetheJETIP„CorruptiondamagestheJETImplementationPlan„Capacityoforgansofstatedoesnotimprove.298JETImplementationPlan2023–2027Chapter11:MonitoringandEvaluationSystemandRiskManagementFrameworkKeyriskstoachievingthePMUshort-termoutcomesareasfollows:„Fiscaldeteriorationunderminesthestate’scapacitytosupportJustTransitioninvestments„Divergentviewsparalysedecision-making„Insufficientskillsinkeyinstitutionstoplan,manage,analyse,co-ordinate,regulate,andunblock„PoliticalchangesinSouthAfricaandinternationalpartnerscreateuncertaintyandunderminepartnersupport.TheJETPMUhasratedtheinherentimpactandprobabilityfortheserisksandallocatedaninherentriskratingtoeach.Mitigationmeasuresforeachriskhavebeenidentified,andresidualriskratingshavebeenapplied.ThisworkthusestablishesthattheJETImplementationPlanRiskRegisterwhichisalivingmanagementtooloftheJETPMU.UpdatestotheRiskRegisterwillbereportedregularlytotheJETGovernmentSteeringCommittee.MitigationmeasuresthatarebeingactivelymanagedbythePMUinclude:„Unblockingfinancingfortransmission„UnblockingfinancingfortheAcceleratedCoalTransitionInvestmentPlan(ACTIP)„IdentifyingandbuildinginstitutionalcapacityforthemanagementofeachPortfolio„Identifyingdeliverymechanismswhicharelessdependentonstatecapacity„Buildingtherelationshipsandcommunicationmechanismstostrengthencoherenceandreassurefinancingpartners.RiskregisterswillbedevelopedforeachPortfolioandmanagedbytheresponsibleleadinstitutions.JETImplementationPlan2023–2027299