South Africa and the illusion of a “just” transition

South Africa’s latest push for fairer funding of its energy transition has revived an uncomfortable truth about global climate finance: even when it claims to empower, it often reproduces dependency.

At COP30 in Brazil, South Africa arrived with a different posture than it had four years ago when it first signed the $8.5 billion Just Energy Transition Partnership (JETP). Back then, the deal was celebrated as a model that promised to help a middle-income country move away from coal while protecting workers and communities. Today, that optimism has faded.

The same country that pioneered the JETP model is now leading the charge for reform. As the first African nation to chair the G20, South Africa has used its new visibility to demand a restructuring of climate finance, one that reflects African developmental priorities rather than external conditionalities. Its message is simple: transitions cannot be just if they deepen debt or reproduce the same asymmetric relationships that defined the last century of global development.

The problem is structural. When the JETP was announced at COP26, Western governments hailed it as a breakthrough in climate justice. In practice, most of the $8.5 billion came as loans rather than grants, often through existing instruments. Nearly 97 percent of the funding would add to South Africa’s sovereign debt.

This pattern extends across the developing world. Climate finance is being packaged as credit rather than compensation. Countries that contributed least to the problem are being asked to borrow their way out of it. As President Cyril Ramaphosa has argued, this model risks replacing fossil-fuel dependence with finance dependence, locking countries into cycles of repayment that erode fiscal space for domestic priorities.

The word has just become one of the most overused and underexamined terms in global climate politics. In practice, it has become a branding device for what remains a fundamentally top-down model. The JETP framework still assumes that the legitimacy of a country’s transition depends on its alignment with external technical and financial standards. Every new iteration follows the same formula: external pledges, debt-heavy instruments, and pre-approved reforms that mirror IMF logic.

These are policy scripts that define “success” through emission targets and private investment ratios rather than social outcomes. When the Komati coal plant in South Africa closed in 2022, no permanent employees lost their jobs (a headline success). But the surrounding community, heavily dependent on coal-linked work, suffered an immediate collapse in local income. People turned to informal mining just to survive. A just transition must do more than move capital from one energy source to another; it must redistribute power.

South Africa’s case captures the paradox confronting much of the Global South. The country has one of the world’s most carbon-intensive economies, but also nearly 32 percent unemployment. Coal provides jobs for more than 120,000 people directly and indirectly supports millions. Cutting emissions without creating alternative livelihoods is austerity by another name.

Most climate finance packages are structured to protect lenders instead of building new productive capacity. As a result, renewable projects are often developed by foreign companies, financed in foreign currency, and integrated into global supply chains that extract value outward. The wind turbines spin in Africa, but the returns circulate elsewhere.

This year, as chair of the G20, South Africa has revived a kind of developmental realism that had gone missing from climate diplomacy. The government has called for reforms that would enable national development banks to lend more in local currency, using risk instruments backed by multilateral partners. This approach could represent a quiet revolution: a move from dependence on foreign lenders toward endogenous financial sovereignty.

But such reforms will only matter if they are accompanied by a change in political imagination, one that treats Africa as a co-architect of the global energy order rather than a recipient. The continent holds roughly 60 percent of the world’s highest-quality solar resources and 30 percent of key critical minerals, yet attracts barely 3 percent of global clean-energy investment.

The JETP model promised to replace conditionality with collaboration. What it delivered was a softer vocabulary for the same old hierarchy: debt over grants, external metrics over domestic priorities, and a persistent faith that private capital will deliver public good.

Climate justice will have to be negotiated, contested, and built through institutional reform that shifts power away from creditors and toward communities. If South Africa can show that decarbonization and development can advance together, it could offer a blueprint for the rest of Africa. But if the model remains trapped in loan-heavy dependency, the gap between global ambition and social reality will only widen.

That is the paradox of our “just transition”: it asks the Global South to change everything except the system that made injustice profitable in the first place.

This article is also published on Substack. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.

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