SUMMARY: The study discusses the just transition transaction (JTT). The JTT mobilises blended finance to fund the accelerated phase out of coal, thereby accelerating a transition from coal to renewable energy. The study seeks to understand the JTT, its architecture and potential to catalyse changes in the complex set of challenges facing South Africa’s electricity sector. The purpose of the study is to understand the potential of a JTT to accelerate the phase out of coal-fired power and to fund development projects. The scope of the case study is national. Its focus is on mitigation and the contribution that a just transition transaction can make in South Africa’s electricity sector. The study outlines the political economy of South Africa, details on national power producer Eskom, the relevant policies on climate and development, and the electricity sector specifically.
KEY FINDINGS / RECOMMENDATIONS: The study found that community ownership is crucial for the buy-in for renewable energy, with two types being community-owned, small-scale embedded generation and community-owned mini-grid. Significant institutional innovation is needed to integrate community ownership with Eskom, which has had a monopoly on electricity supply. Further research should focus on Mpumalanga where community ownership models are piloted, and these will require a bottom-up, community- and locally-driven process. They also point to the need to co-develop a funding strategy with local communities, workers and municipalities, which could provide guidance of the JT Fund’s spending on development projects.