According to COP27’s Sharm el-Sheikh Implementation Plan, at least USD four – six trillion is required per year for a global transition to a low-carbon economy.1 In fossil fuel–dependent countries, Nationally Determined Contributions typically include a fossil fuel phaseout or increasing renewable energy (RE) deployment. The eventual reduction in fossil fuel dependency could result in assets being stranded, impact government revenues and employment opportunities among other aspects. To ensure that the transition to a cleaner future is just and equitable, it is imperative to reskill workers, create alternate employment opportunities, and facilitate the participation of a wide spectrum of stakeholders in this transition. The fulfilment of such just transition objectives will require a considerable amount of financial assistance from domestic as well as international public and private sectors.
While there is no official definition of what a JETP is, it may be viewed as a multilateral agreement between a developed and developing country, wherein the former extends financial and technical support to facilitate socially inclusive energy transitions in the latter.2,3,4,5 JETPs aim to provide the finances required for energy transitions, focus on reducing coal dependency through supporting workers, and ensure a just transition for vulnerable communities. The funding is provided through a mix of grants – both concessional and market-rate loans – and assistance for catalysing investment from the private sector.2,3,4,5
The first JETP was announced at COP26 in Glasgow (2021). The partnership involves South Africa, which was to receive financial aid amounting to USD 8.5 billion from France, Germany, the United Kingdom (UK), the United States (US), and the European Union (EU).2 Commitments included concessional funding and policy loans. The JETP Investment Plan (JETP IP), released by South Africa at COP27 (2022), showcased a transition pathway with three focus areas: the electricity sector, new energy vehicles, and green hydrogen. The updated JETP IP pathway estimated a funding requirement of USD 98 billion.6
The second JETP was announced at the G20 leaders’ summit in Bali in November 2022, between Indonesia and an international partners group (IPG), amounting to USD 20 billion.3 The IPG is co-led by the US and Japan, and also consists of the UK, the EU, Northern Ireland, Germany, France, Italy, Canada, Denmark, and Norway. Per the terms of the partnership, donors and private-sector investors are to mobilise USD 10 billion each, to be delivered over three to five years.7 This JETP targets the early retirement of coal-fired power plants, achieving net zero in the power sector by 2050, and commitments towards regulatory reforms and energy efficiency.
The third JETP was announced in December 2022 between Vietnam and an IPG and amounts to USD 15 billion. The IPG consists of the UK, the EU, Northern Ireland, the US, Japan, Germany, France, Italy, Canada, Denmark, and Norway.4 The finance has been pledged in equal shares of USD 7.5 billion each by public and private sector investors.4 It will come primarily in the form of loans, along with a few grants. The partnership aims to decommission coal-fired power plants, invest in RE and energy storage, and increase energy efficiency.
The fourth JETP was announced at the Summit for a New Global Financing Pact in June 2023, between Senegal and an IPG, amounting to EUR 2.5 billion.5 The IPG, comprising France, Germany, the EU, the UK, and Canada, will provide financial and technical support to Senegal. The technical expertise and funding will be provided by multilateral development banks, the private sector, sovereign wealth funds, and philanthropic foundations over the next three to five years. This JETP focuses on increasing energy access, accelerating RE deployment, and envisioning a long-term low greenhouse gas emission development strategy.