Speaking to his American counterpart, Secretary of the Treasury Janet Yellen, during a closed session on Thursday 26 January, Godongwana also made an appeal that global collaborators recognise Africa’s “special needs and circumstances” in climate-change financing discussions.
- In 2021, South Africa became the recipient of $8.5bn in pledges from international partners comprising rich nations at COP26 in Glasgow to help transition the country’s carbon-intensive coal-based economy into a greener one.
In its Just Energy Transition Investment Plan, South Africa estimates a need for a $98bn investment in clean energy and other programmes, including green hydrogen infrastructure and electric vehicle manufacturing, over the long term.
At the Glasgow meeting, South Africa became a pathbreaker because it was the first country to have a Just Energy Transition Partnership. As part of the $8.5bn package, the US pledged $1bn to be disbursed by American government agencies over three to five years.
Godongwana relayed gratitude to Yellen and her delegation. But the Finance minister also thinks the US and other rich nations could do more for South Africa “by ensuring the financial support includes a much larger grant-funding component,” according to a ministry of finance statement.
Godongwana told Yellen there ought to be consideration globally about Africa’s circumstances, including the fact that a large proportion of countries in the region are resource-dependent economies, as well as the continent’s socioeconomic conditions – “poverty, unemployment, and underdevelopment”.
“This recognition would be an important step towards unlocking … financial flows to the continent, allowing it to play its role in the global transition to a low-carbon future,” Godongwana says.
Proud to partner
Yellen’s visit marks the first time a US Secretary of the Treasury has touched down in South Africa since 2014 when Jacob J Lew came to the country. South Africa was Yellen’s last stop on a three-country visit to the continent that included Senegal and Zambia.
In addition to the meeting with Godongwana, Yellen visited Ford’s plant in Silverton, Pretoria; went to Mpumalanga, South Africa’s coal belt; and met with local and international philanthropies on the country’s Just Transition.
In prepared notes, Yellen says the US is proud to commit as a partner to South Africa’s Just Transition. She believes the initiative will “alleviate the deep fiscal strain the energy sector is putting on South Africa’s economy and support strong economic growth”.
At the meeting with local and international philanthropies, Yellen said: “I think we all see both the tremendous need and opportunity for reform of the energy sector in a way that lifts up impacted communities and strengthens sustainable economic growth.”
“That is, in large part, why we joined international partners in creating the Just Energy Transition Partnership with South Africa,” she added.
Furthermore, Yellen says the partners “must demonstrate quickly that these coal communities, which are already struggling with unemployment, poverty and the health impacts of coal mining and emissions, will not be left behind in the context of an energy shift that benefits other regions”.
“South Africa will need to see concrete action soon to keep up momentum on the … [Just Energy Transition] partnership,” Yellen said.
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