A Just Transition Finance Roadmap for South Africa: A First Iteration
This report outlines a roadmap for financing South Africa's just transition to a low-carbon economy, emphasizing the need to address socio-economic impacts on vulnerable workers and communities. It highlights the urgency of mobilizing finance for economic diversification, social protection, and institutional support in regions like Mpumalanga, where coal-dependent economies face imminent job losses. The report proposes a dual agenda: short-term innovations within the existing financial system and long-term systemic changes to mainstream just transition finance.
Key Findings/Recommendations: The report emphasizes that just transition finance should be separate from climate finance, targeting economic diversification, worker support, and institutional capacity. It identifies challenges such as high transaction costs for small projects, technology risks, and lack of private sector interest in low-ticket, high-ambition projects. Proposed solutions include de-risking mechanisms, blended finance, and thematic bonds (e.g., mine rehabilitation bonds). Policy actions recommended involve the government providing clear signals, incentivizing private sector participation, and negotiating preferential offshore funding. Institutional reforms suggested including establishing a Just Transition Fund and improving coordination among public, private, and international financiers.
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