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 the same 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 degree, promising higher affect by focusing on nations which are pivotal for the worldwide vitality transition: main rising economies with a big share of coal of their vitality combine. And so they set bold schedules, aiming to lift 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 middle 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’d additionally assist coal-dependent communities modify to financial disruption as economies pivoted towards clear vitality.
It has been 4 years since COP26 in Glasgow, and the proof is evident: 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 have been struggling to generate the funding and transformational coverage reforms envisioned after they have been launched. Why have these large-scale, high-profile partnerships stalled?
The principle 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 nations and the issue of enacting deep and infrequently 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 primary precedence is commonly to make sure dependable entry to electrical energy at secure and inexpensive costs, and it’s cautious of accumulating exterior liabilities on the steadiness of funds, akin to massive international money owed. The politics of reforming highly effective state-owned utilities, unsurprisingly, is proving to be a fancy enterprise.
The JETPs encourage recipient nations to embrace pro-market reforms so as to create favorable situations for personal buyers and builders. If enacted, many of those reforms would shift a big quantity of market danger onto the state, result in increased costs for customers, 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 essential than extra pragmatic points akin to who pays, on what phrases and the way dangers and rewards are allotted. The issue in reaching consensus on these essential factors and sufficiently accounting for the political and financial realities of vitality in these nations 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 growing older fleet of coal-fired energy crops, and the necessity for international funding and know-how to speed up its clear vitality transition. Since 2007, South Africa has been experiencing rolling blackouts because of growing older infrastructure, particularly its fleet of coal-fired energy crops, virtually all of which have been constructed within the Eighties or earlier. Anchoring electrical energy era with coal was a choice that made sense again then, on condition 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 economic system, but in addition a legal responsibility as new capability wants to return on-line rapidly 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 whole transition funding necessities from 2023 to 2027 can be $98 billion, together with sizable investments in inexperienced hydrogen, electrical autos, and renewable vitality. Funding in electrical energy era and grid upgrades alone was anticipated to succeed in $69 billion. The preliminary $8.5 billion beneath the JETP was to be composed of round $6 billion in grants and concessional loans from European nations, 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 beneath the JETP have been lower than 10 p.c of whole estimated wants, and roughly 1 / 4 was to be at market slightly than concessional charges. Simply $50 million was allotted for financial diversification, re-skilling and social inclusion. JETP planners have been conscious that $8.5 billion in funding was inadequate, however hoped this system would catalyze extra funding at scale. Thus far, this has not occurred. In accordance with Eskom’s annual report, as of March 2025, photo voltaic and wind accounted for simply 8 p.c of whole electrical energy equipped.
One of many primary 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 damaging earnings of $1.1 billion (at an alternate fee 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 (era, transmission, and distribution) with extra impartial oversight. Nevertheless, this stays an ongoing course of, and the final word impact it should 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 bundle from the federal government. Income additionally rose 67 p.c between 2021 and 2025 as a sequence of value will increase on customers went into impact. Even so, internet money from operations stays insufficient to cowl debt servicing and funding in renewable vitality is beneath goal.
Subsequent yr 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 customers and the state have shouldered a lot of the prices. Whether or not these prices shall be justified by unleashing the hoped-for wave of personal funding stays to be seen. Apparently, lots 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 lots of the identical parts as South Africa’s. The preliminary dedication was $20 billion in vitality transition funding, half of which was to return from the non-public sector at market charges. Complete funding wants by way of 2030 have been estimated at $97 billion, that means the JETP would solely cowl a portion of the required quantity. The aim, 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 p.c of whole electrical energy era by then. So as to take action, photo voltaic and wind energy would wish to extend dramatically from 0.2 p.c in 2022 to 14 p.c by 2030. To facilitate this, the JETP proposed a sequence of regulatory and coverage reforms to make the clear vitality sector extra enticing to non-public buyers 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 authorised beneath the JETP framework. Nevertheless, this consists of $1.8 billion from JICA to finance the development of the Jakarta Mass Fast Transit system. This undertaking, and public transit extra usually, was not a part of the JETP’s unique remit. A lot of the remaining $1.1 billion consists of coverage loans earmarked for capability constructing within the Indonesian authorities.
Solely a small quantity of authorised 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. A lot of people who have, such because the Cirata floating photo voltaic farm, have been accomplished exterior of the JETP framework. The CIPP envisioned Indonesia producing at the least 2 p.c of its vitality from photo voltaic and wind by 2025, however the realized quantity is a fraction of that. Reaching the 14 p.c goal by 2030 shall be difficult.
A significant impediment is that the pursuits of key stakeholders have struggled to align. A essential assumption was that in alternate 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 customers in keeping with increased working prices, and eradicating home value caps in order that coal could possibly be purchased and bought at its true market value. The Indonesian authorities was additionally anticipated to offer sovereign ensures for precedence tasks.
State-owned electrical utility PLN, which provides electrical energy to 98 p.c 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 tough preparatory duties akin to land acquisition. PLN would additionally develop a extra bankable contract template with favorable phrases for buyers, akin to denominating funds to impartial energy producers in U.S. {dollars}.
If enacted, these enabling insurance policies would shift a lot of the market danger from non-public sector buyers and builders onto PLN and the Indonesian state, whereas asking for politically unpalatable concessions akin to elevating the worth of electrical energy for Indonesian customers. The JETP reforms would successfully require PLN to surrender appreciable market energy and assume extra danger, one thing that the utility was not more likely to conform to.
The 2025 Progress Report acknowledges that some features of the JETP have 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 by way of joint ventures with PLN. Regardless of the remaining type, the JETP in Indonesia is unlikely to make important headway till a extra equitable distribution of dangers and rewards turns into a critical a part of the dialog.
Vietnam
Vietnam’s JETP follows a well-recognized method, with worldwide companions pledging $15.5 billion for clear vitality growth, half to return 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 at the least $7.5 billion in financing can be made accessible at charges decrease than what could possibly be obtained on the open market. Neither Indonesia nor South Africa insisted on related assurances.
Of the three JETP nations, Vietnam is the one one which has skilled a transparent and unambiguous clear vitality growth. In 2023, Vietnam generated 44.2 p.c 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 super progress, rising from 0.4 p.c of electrical energy generated in 2018 to 14 p.c in 2023. Nevertheless, nearly all of this exercise occurred exterior of the JETP framework, and far of it earlier than the JETP was launched.
Fast progress will be attributed to a beneficiant Feed-in-Tariff established in 2017. The FIT assured a fee of 9.35 U.S. cents per kilowatt hour for tasks that reached industrial operation by June 30, 2019. Investor response was extremely optimistic and because of this, solar energy grew dramatically from 2019 onward as builders rushed to get tasks in earlier than the deadline. But it surely got here at a price, one largely borne by state-owned electrical utility EVN and Vietnamese customers.
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 fee. 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, nevertheless it additionally considerably diluted the utility’s market energy inside the vitality sector. EVN accounted for 61 p.c of Vietnam’s nationwide put in capability in 2016. In 2023, this had fallen to 37 p.c.
The federal government reluctantly raised costs on customers between 2023 and 2025, which allowed EVN’s funds to stabilize. This expertise probably sharpened Vietnam’s skepticism of public-private partnerships the place substantial danger and prices are absorbed by the nation receiving the funding. If the aim was merely to construct extra clear vitality, Vietnam’s latest efforts will be thought of successful. However its potential and urge for food for EVN to behave because the fulcrum for one more huge spherical of unpolluted vitality tasks aimed on the non-public sector, akin to these envisioned by the JETP, could also be restricted.
A Means Ahead?
The Simply Vitality Transition Partnerships in Indonesia, South Africa, and Vietnam pledged at the least $44 billion for funding in clear vitality. No less than half of this was to return from the non-public sector, and the recipient nations have been anticipated to undertake reforms to make their vitality sectors extra bankable and enticing to non-public buyers. In all three instances, funding and undertaking growth 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 value will increase on customers. Nevertheless, whereas the coverage atmosphere could also be making incremental progress towards a extra market-friendly footing, it has not but unleashed an enormous growth in renewable vitality.
Confronted with the same bundle 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 akin to eradicating value caps on coal, elevating costs on customers, restructuring PLN or extensively de-risking clear vitality tasks to make them extra enticing to non-public builders and buyers.
PLN continues to favor joint ventures and extra equitable risk-sharing, whereas authorities officers have voiced a need for extra favorable phrases if buyers 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 keen to expertise once more both.
Does a reputable pathway to extra clear vitality and lowered emissions nonetheless exist for Simply Vitality Transition Partnerships? Definitely. The JETPs have at all times billed themselves as a versatile framework, able to adjusting to new data and situations. If these initiatives are to assemble 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 danger and reward between the non-public sector, the recipient nations and the state-owned utilities which are essential to attaining the imaginative and prescient of a cleaner vitality future.
