Collective pledges for the country’s transition, including commitments from multilateral development banks, stands at $13.7 billion
South Africa’s just energy transition partnership (JETP) gained momentum in 2025, with international partners reaffirming their commitment despite growing geopolitical uncertainty and the United States’ withdrawal from the initiative earlier in the year.
The International Partners Group (IPG) — comprising the United Kingdom, Denmark, the European Union, France, Germany and the Netherlands — and South Africa’s just energy transition project management unit released their joint 12-month update late last year, outlining progress across energy reform, infrastructure investment and social transition measures.
Collective pledges from IPG members now stand at $10 billion, with additional bilateral contributions lifting the total to $12.4 billion. When commitments from multilateral development banks are included, total pledged support reaches $13.7 billion.
On 28 February last year, the US formally withdrew from the partnership, cancelling an unallocated $56 million in grant funding and a potential $1 billion in commercial investments. The remaining partners have since maintained their “strong support” for South Africa’s just and inclusive energy transition.
Market reform, grid expansion
Progress on energy sector reforms, renewable energy investment, private sector participation in transmission and improvements in distribution infrastructure indicate that South Africa’s transition remains on a positive trajectory.
The update welcomed key policy and market developments over the past year, with regulatory frameworks and capacity-building well underway for the launch of the South African Wholesale Electricity Market (Sawem), scheduled for April.
The Electricity Regulation Amendment Act which came into force on 1 January 2025 laid the legal foundation for wholesale market reform. In November, the National Energy Regulator of South Africa (Nersa) granted a market operator licence to the National Transmission Company South Africa, clearing a major hurdle ahead of Sawem’s launch.
Nersa also approved new grid capacity allocation rules and established a 14-member electricity market advisory forum to guide regulatory instruments and ensure market readiness.
“The National Transmission Company South Africa is delivering the over-subscribed Sawem school,” the update said. “Further work is needed to unbundle Eskom divisions, fine-tune the market code, finalise wholesale market tariffs and trading rules, and agree vesting contracts with coal plants.”
Transmission remains a critical bottleneck. South Africa’s transmission development plan identifies the need for more than 14 000 km of new lines over the next decade. Last July 2025, Electricity and Energy Minister Kgosientsho Ramokgopa launched the first request for qualification for independent transmission projects, covering 1 164 km of new lines.
This rollout is supported by a World Bank-backed credit guarantee facility designed to de-risk projects and attract private capital, with the first procurement phase expected by mid-2026 and annual procurement windows thereafter.
Policy alignment, political backing
The update underscores continued political support for the transition. President Cyril Ramaphosa’s February 2025 State of the Nation address emphasised market reform, generation competition and ring-fenced municipal utilities, while South Africa’s G20 presidency provided a platform to reinforce its commitment to decarbonisation alongside energy access.
In October, the cabinet approved the Integrated Resource Plan outlining energy allocations to 2030: more than 10 000MW of solar PV, 7 300MW of wind, 6 000MW of gas-to-power, and 5 200MW of new nuclear capacity by 2039.
South Africa submitted its revised national climate commitments — its nationally determined contribution (NDC) in October 2025, setting a greenhouse gas emissions range of 320–380 MtCO₂e by 2035 (million tons of carbon dioxide equivalent) — higher than the range recommended by the Presidential Climate Commission.
Following the 2024 Climate Change Act, the government consulted on phase two of its carbon tax arrangements, and last July Ramokgopa approved the publication of draft national greenhouse gas carbon budget and mitigation plan regulations for public comment.
After delays linked to US objections, the updated Accelerating Coal Transition Investment Plan was approved by the Climate Investment Funds in June 2025, paving the way for implementation under a dedicated governing committee.
The update noted that Eskom returned to profitability for the first time since 2017, though rising municipal debt and failing distribution infrastructure remain significant risks. Both Eskom and the government are trialling measures to stabilise and upgrade municipal networks.
The just energy transition project management unit’s funding platform is operational, matching JET-aligned projects with grant funding, while IPG investments are tracked through a quarterly-updated international finance register, it said.
JET-aligned investments advanced across multiple sectors in 2025. Germany’s KfW provided a €150 million loan to strengthen Cape Town’s electricity grid, while the UK’s British International Investment and GuarantCo committed $100 million in guarantee financing to support new energy trading capacity.
The European Investment Bank signed a €350 million loan with Transnet, and France announced a further €300 million to support the state-owned company’s decarbonisation plans. Denmark is providing ongoing technical assistance to build capacity in regulation, power market development, energy planning and procurement models.
On the ground
Progress in 2025 included support for small, medium and micro-enterprises, skills development programmes, and place-based transition initiatives.
In Mpumalanga, construction is underway on the Grootvlei horticulture expertise facility, funded by the Netherlands, on the site of the decommissioned Grootvlei power station. The facility aims to create alternative livelihoods through climate-smart, water-efficient agriculture, training workers, farm managers and agricultural entrepreneurs.
Institutionally, just energy transition portfolios are embedded across government, with lead departments for electricity, municipal reform, green hydrogen, electric vehicles, skills development and provincial transition planning. A just energy transition municipal council has been established to coordinate municipal-level efforts.
The update highlights the JETP’s tangible impact in supporting the enabling environment for transition, mobilising finance, unblocking financial flows and sustaining political momentum. “It has demonstrated both the challenges and opportunities in transitioning energy systems in emerging economies,” it said.
The document noted that South Africa is unlikely to meet the high ambition target of its 2030 NDC, but a credible pathway remains to meet the lower bound of 420 MtCO₂e if mitigation measures are accelerated. The recently published NDC target range of 320–380 MtCO₂e by 2035 “suggests that the just energy transition must be accelerated to enhance emissions reduction.”
Progress on energy sector reforms, renewable energy investment, private sector participation in transmission, and improvements in distribution infrastructure “all show that South Africa’s just energy transition continues on a positive trajectory.”
JETPs are a “pioneering model of country-led clean energy transition support”, increasingly regarded as “first-generation country platforms” that align domestic policies with international and private finance.
In 2026, the focus will shift to delivery and learning. The Just Energy Transition Project Management Unit will evaluate implementation with IPG members and stakeholders, capturing lessons for other JETP countries and next-generation platforms.
The IPG said its support for South Africa’s energy transition “remains strong” and that it, together with South Africa, reiterated their commitment to work together to achieve the objectives set out in the JETP Political Declaration (2021), Investment Plan (2022), and Implementation Plan (2023).
“In the current uncertain geopolitical context, it remains vital to support the just energy transition, including its social dimensions, with key partners such as South Africa.”