In 2021, the world’s first Simply Vitality Transition Partnership (JETP) was introduced at COP26 in Glasgow. Hailed as a breakthrough, an Worldwide Companions Group, consisting of america, United Kingdom, European Union, France and Germany, pledged $8.5 billion in local weather finance to help South Africa in its transition to wash vitality.
On the 2022 G20 Summit in Bali, Indonesia unveiled its personal $20 billion JETP with an analogous slate of companions. Vietnam adopted a number of months later with a $15.5 billion deal. (A smaller EUR 2.5 billion JETP with Senegal was introduced in 2023 and a a lot bigger one with India was negotiated however by no means finalized.) These applications aimed to take local weather finance to a different stage, promising better impression by focusing on international locations which are pivotal for the worldwide vitality transition: main rising economies with a big share of coal of their vitality combine. They usually set bold schedules, aiming to boost and deploy the pledged capital nicely earlier than 2030.
Along with securing tens of billions of {dollars} to finance vitality transitions in rising markets, what set the JETPs aside was their dedication to placing local weather justice on the heart of worldwide local weather finance. Not solely would they channel billions of {dollars} into renewable vitality, early retirement of coal-fired energy crops and upgrading transmission grids; they might additionally assist coal-dependent communities regulate to financial disruption as economies pivoted towards clear vitality.
It has been 4 years since COP26 in Glasgow, and the proof is obvious: the Indonesian, South African, and Vietnamese JETPs have all made sluggish progress. After President Donald Trump returned to the White Home in early 2025, america withdrew from the partnerships. But even earlier than that, the JETP platforms had been struggling to generate the funding and transformational coverage reforms envisioned once they had been launched. Why have these large-scale, high-profile partnerships stalled?
The primary cause is that whereas the JETP built-in notions of justice into clear vitality and local weather finance, it paid inadequate consideration to the political-economic realities of the recipient international locations and the problem of enacting deep and sometimes politically unpalatable structural reforms. In rising markets like Indonesia, South Africa, and Vietnam, financially fragile however politically highly effective state-owned utilities usually dominate the provision and distribution of electrical energy. The federal government’s foremost precedence is usually to make sure dependable entry to electrical energy at steady and inexpensive costs, and it’s cautious of accumulating exterior liabilities on the stability of funds, resembling giant overseas money owed. The politics of reforming highly effective state-owned utilities, unsurprisingly, is proving to be a fancy enterprise.
The JETPs encourage recipient international locations to embrace pro-market reforms as a way to create favorable circumstances for personal traders and builders. If enacted, many of those reforms would shift a big quantity of market threat onto the state, result in larger costs for shoppers, require politically dangerous overhauls of state-owned electrical utilities, and enhance publicity to market-rate debt. Indonesia, South Africa, and Vietnam have been slower to embrace and implement these reforms than anticipated.
Appeals to local weather justice have confirmed much less necessary than extra pragmatic points resembling who can pay, on what phrases and the way dangers and rewards are allotted. The issue in reaching consensus on these vital factors and sufficiently accounting for the political and financial realities of vitality in these international locations spawned a sequence of bold partnerships which have but to totally ship on their lofty objectives.
South Africa
South Africa was the primary JETP candidate due to its heavy reliance on coal, its ageing fleet of coal-fired energy crops, and the necessity for overseas funding and know-how to speed up its clear vitality transition. Since 2007, South Africa has been experiencing rolling blackouts because of ageing infrastructure, particularly its fleet of coal-fired energy crops, virtually all of which had been constructed within the Eighties or earlier. Anchoring electrical energy technology with coal was a choice that made sense again then, provided that South Africa is the world’s seventh largest producer of coal, most of which is consumed domestically. Coal is a linchpin of the nation’s political financial system, but in addition a legal responsibility as new capability wants to come back on-line shortly to shut the vitality deficit. The JETP was designed to handle these points.
The JETP funding roadmap was revealed in 2022 and estimated that South Africa’s complete transition funding necessities from 2023 to 2027 can be $98 billion, together with sizable investments in inexperienced hydrogen, electrical automobiles, and renewable vitality. Funding in electrical energy technology and grid upgrades alone was anticipated to achieve $69 billion. The preliminary $8.5 billion below the JETP was to be composed of round $6 billion in grants and concessional loans from European international locations, and $2.6 billion in market-rate financing and fairness funding, together with $1 billion from america. The U.S. didn’t supply any financing or funding beneath market charges.
Preliminary commitments below the JETP had been lower than 10 % of complete estimated wants, and roughly 1 / 4 was to be at market somewhat than concessional charges. Simply $50 million was allotted for financial diversification, re-skilling and social inclusion. JETP planners had been conscious that $8.5 billion in funding was inadequate, however hoped this system would catalyze extra funding at scale. Up to now, this has not occurred. In accordance with Eskom’s annual report, as of March 2025, photo voltaic and wind accounted for simply 8 % of complete electrical energy provided.
One of many foremost roadblocks is state-owned electrical utility Eskom. Eskom has dominated the provision and transmission of electrical energy in South Africa for over a century, and have become closely indebted within the course of. When South Africa’s JETP was introduced in 2021, Eskom had adverse earnings of $1.1 billion (at an trade charge of 16 South African rand to the greenback), and famous of their annual report that working cashflow was insufficient to fulfill debt servicing necessities.
For the JETP to work as envisioned, Eskom wants to remodel itself right into a extra practical market-maker that’s each financially self-sustaining and has the credibility to draw non-public funding. A restructuring course of is underway to perform this, together with separating Eskom into three completely different entities (technology, transmission, and distribution) with extra unbiased oversight. Nevertheless, this stays an ongoing course of, and the last word impact it would have on the South African vitality market, in addition to investor confidence, stays an open query.
In 2025, Eskom turned a revenue of $1 billion, because of a big debt reduction package deal from the federal government. Income additionally rose 67 % between 2021 and 2025 as a sequence of worth will increase on shoppers went into impact. Even so, web money from operations stays insufficient to cowl debt servicing and funding in renewable vitality is beneath goal.
Subsequent 12 months is the tip of South Africa’s preliminary five-year JETP timeframe. Whereas Eskom is now shifting towards a sounder monetary and operational footing, the restructuring course of has taken longer than anticipated and shoppers and the state have shouldered many of the prices. Whether or not these prices might be justified by unleashing the hoped-for wave of personal funding stays to be seen. Curiously, most of the points slowing down South Africa’s JETP implementation can be present in Indonesia and Vietnam.
Indonesia
When the JETP Secretariat unveiled Indonesia’s Complete Funding and Coverage Plan (CIPP) in 2023, it contained most of the identical components as South Africa’s. The preliminary dedication was $20 billion in vitality transition funding, half of which was to come back from the non-public sector at market charges. Complete funding wants via 2030 had been estimated at $97 billion, that means the JETP would solely cowl a portion of the required quantity. The objective, as in South Africa, was for the JETP to function a catalyst for elevated non-public funding.
The JETP aimed for peak emissions in 2030, with renewable vitality anticipated to account for 34 % of complete electrical energy technology by then. So as to take action, photo voltaic and wind energy would want to extend dramatically from 0.2 % in 2022 to 14 % by 2030. To facilitate this, the JETP proposed a sequence of regulatory and coverage reforms to make the clear vitality sector extra enticing to personal traders and builders.
As of early 2026, the JETP is delayed. In accordance with the 2025 Progress Report, $2.9 billion of mortgage or fairness funding had been accepted below the JETP framework. Nevertheless, this consists of $1.8 billion from JICA to finance the development of the Jakarta Mass Fast Transit system. This challenge, and public transit extra usually, was not a part of the JETP’s unique remit. Many of the remaining $1.1 billion consists of coverage loans earmarked for capability constructing within the Indonesian authorities.
Solely a small quantity of accepted funding has been allotted for particular clear vitality tasks. Consequently, few utility-scale photo voltaic or wind tasks have reached monetary closing or entered development in Indonesia since JETP was launched. Lots of those who have, such because the Cirata floating photo voltaic farm, had been finished outdoors of the JETP framework. The CIPP envisioned Indonesia producing a minimum of 2 % of its vitality from photo voltaic and wind by 2025, however the realized quantity is a fraction of that. Attaining the 14 % goal by 2030 might be difficult.
A significant impediment is that the pursuits of key stakeholders have struggled to align. A vital assumption was that in trade for entry to funding, Indonesia would enact wide-ranging structural reforms. Known as “enabling insurance policies,” these measures included enjoyable home content material necessities, elevating electrical energy costs for shoppers according to larger working prices, and eradicating home worth caps in order that coal may very well be purchased and offered at its true market worth. The Indonesian authorities was additionally anticipated to offer sovereign ensures for precedence tasks.
State-owned electrical utility PLN, which provides electrical energy to 98 % of Indonesian households, was anticipated to take a step again and act extra as a market-maker and funding facilitator, de-risking tasks for the non-public sector by dealing with troublesome preparatory duties resembling land acquisition. PLN would additionally develop a extra bankable contract template with favorable phrases for traders, resembling denominating funds to unbiased energy producers in U.S. {dollars}.
If enacted, these enabling insurance policies would shift a lot of the market threat from non-public sector traders and builders onto PLN and the Indonesian state, whereas asking for politically unpalatable concessions resembling elevating the value of electrical energy for Indonesian shoppers. The JETP reforms would successfully require PLN to surrender appreciable market energy and assume extra threat, one thing that the utility was not prone to conform to.
The 2025 Progress Report acknowledges that some elements of the JETP had been under-developed in its first iteration, such because the difficult politics of early retirement of coal-fired energy crops. There additionally seems to be extra openness to co-development of unpolluted vitality tasks via joint ventures with PLN. Regardless of the closing kind, the JETP in Indonesia is unlikely to make vital headway till a extra equitable distribution of dangers and rewards turns into a severe a part of the dialog.
Vietnam
Vietnam’s JETP follows a well-recognized formulation, with worldwide companions pledging $15.5 billion for clear vitality improvement, half to come back from the non-public sector. Vietnam was skeptical from the start, agreeing to a preliminary framework and announcement after particular language was included, promising that a minimum of $7.5 billion in financing can be made accessible at charges decrease than what may very well be obtained on the open market. Neither Indonesia nor South Africa insisted on comparable assurances.
Of the three JETP international locations, Vietnam is the one one which has skilled a transparent and unambiguous clear vitality growth. In 2023, Vietnam generated 44.2 % of its electrical energy from renewables (together with hydropower), virtually the identical quantity because it produced from burning coal. Wind and photo voltaic have skilled great development, rising from 0.4 % of electrical energy generated in 2018 to 14 % in 2023. Nevertheless, just about all of this exercise occurred outdoors of the JETP framework, and far of it earlier than the JETP was launched.
Fast development will be attributed to a beneficiant Feed-in-Tariff established in 2017. The FIT assured a charge of 9.35 U.S. cents per kilowatt hour for tasks that reached business operation by June 30, 2019. Investor response was extremely optimistic and in consequence, solar energy grew dramatically from 2019 onward as builders rushed to get tasks in earlier than the deadline. However it got here at a price, one largely borne by state-owned electrical utility EVN and Vietnamese shoppers.
EVN’s working prices rose sharply as a wave of personal builders entered the market and the utility was obligated to purchase energy from them at an above market charge. Funds to exterior service suppliers elevated from $4.7 billion in 2018 to $11.8 billion by 2023. Between 2022 and 2023, EVN posted a cumulative after-tax lack of VND 47.5 trillion, roughly $1.97 billion. Not solely did this wave of personal funding pressure EVN’s funds, however it additionally considerably diluted the utility’s market energy inside the vitality sector. EVN accounted for 61 % of Vietnam’s nationwide put in capability in 2016. In 2023, this had fallen to 37 %.
The federal government reluctantly raised costs on shoppers between 2023 and 2025, which allowed EVN’s funds to stabilize. This expertise seemingly sharpened Vietnam’s skepticism of public-private partnerships the place substantial threat and prices are absorbed by the nation receiving the funding. If the objective was merely to construct extra clear vitality, Vietnam’s latest efforts will be thought of successful. However its capacity and urge for food for EVN to behave because the fulcrum for one more large spherical of unpolluted vitality tasks aimed on the non-public sector, resembling these envisioned by the JETP, could also be restricted.
A Means Ahead?
The Simply Vitality Transition Partnerships in Indonesia, South Africa, and Vietnam pledged a minimum of $44 billion for funding in clear vitality. A minimum of half of this was to come back from the non-public sector, and the recipient international locations had been anticipated to undertake reforms to make their vitality sectors extra bankable and enticing to personal traders. In all three circumstances, funding and challenge improvement have progressed extra slowly than anticipated.
By way of enabling insurance policies, South Africa is the furthest alongside, with Eskom present process an intensive restructuring and returning to a sounder monetary footing after authorized reforms, debt reduction, and huge worth will increase on shoppers. Nevertheless, whereas the coverage atmosphere could also be making incremental progress towards a extra market-friendly footing, it has not but unleashed a giant growth in renewable vitality.
Confronted with an analogous package deal of coverage reforms, Indonesia has been much less receptive to vary. PLN and the federal government of Indonesia have largely been unwilling to make concessions on key points resembling eradicating worth caps on coal, elevating costs on shoppers, restructuring PLN or extensively de-risking clear vitality tasks to make them extra enticing to personal builders and traders.
PLN continues to desire joint ventures and extra equitable risk-sharing, whereas authorities officers have voiced a want for extra favorable phrases if traders need entry to the Indonesian market. In Vietnam, even earlier than the JETP was launched, EVN noticed its market share shrink whereas being financially stretched by underwriting a wave of public-private clear vitality tasks. It could not be stunning if that is considered in neighboring Indonesia as a cautionary story, and might be not one thing EVN is raring to expertise once more both.
Does a reputable pathway to extra clear vitality and decreased emissions nonetheless exist for Simply Vitality Transition Partnerships? Actually. The JETPs have at all times billed themselves as a versatile framework, able to adjusting to new data and circumstances. If these initiatives are to collect steam within the years forward, they might want to show that is the case. In the end, the success of JETP and any clear vitality transition would require an trustworthy stock of key stakeholders, their pursuits and an equitable distribution of threat and reward between the non-public sector, the recipient international locations and the state-owned utilities which are essential to attaining the imaginative and prescient of a cleaner vitality future.
