In 2021, the world’s first Simply Power Transition Partnership (JETP) was introduced at COP26 in Glasgow. Hailed as a breakthrough, an Worldwide Companions Group, consisting of the USA, United Kingdom, European Union, France and Germany, pledged $8.5 billion in local weather finance to help South Africa in its transition to wash power.
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 packages aimed to take local weather finance to a different degree, promising better affect by concentrating on nations which can be pivotal for the worldwide power transition: main rising economies with a big share of coal of their power combine. They usually set formidable schedules, aiming to lift and deploy the pledged capital effectively earlier than 2030.
Along with securing tens of billions of {dollars} to finance power 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 power, early retirement of coal-fired energy crops and upgrading transmission grids; they’d additionally assist coal-dependent communities regulate to financial disruption as economies pivoted towards clear power.
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, the USA withdrew from the partnerships. But even earlier than that, the JETP platforms have been struggling to generate the funding and transformational coverage reforms envisioned once they have been launched. Why have these large-scale, high-profile partnerships stalled?
The primary purpose is that whereas the JETP built-in notions of justice into clear power and local weather finance, it paid inadequate consideration to the political-economic realities of the recipient nations 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 typically dominate the availability and distribution of electrical energy. The federal government’s principal 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 steadiness of funds, corresponding to massive overseas money owed. The politics of reforming highly effective state-owned utilities, unsurprisingly, is proving to be a fancy endeavor.
The JETPs encourage recipient nations to embrace pro-market reforms in an effort to create favorable situations for personal traders and builders. If enacted, many of those reforms would shift a major quantity of market threat onto the state, result in greater costs for customers, require politically dangerous overhauls of state-owned electrical utilities, and improve 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 corresponding to who can pay, on what phrases and the way dangers and rewards are allotted. The problem in reaching consensus on these crucial factors and sufficiently accounting for the political and financial realities of power in these nations spawned a sequence of formidable partnerships which have but to completely ship on their lofty targets.
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 overseas funding and know-how to speed up its clear power transition. Since 2007, South Africa has been experiencing rolling blackouts on account 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 technology with coal was a call 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 additionally a legal responsibility as new capability wants to return on-line shortly to shut the power deficit. The JETP was designed to deal with 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 automobiles, and renewable power. Funding in electrical energy technology and grid upgrades alone was anticipated to succeed in $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 nations, and $2.6 billion in market-rate financing and fairness funding, together with $1 billion from the USA. The U.S. didn’t supply any financing or funding beneath market charges.
Preliminary commitments below the JETP have been lower than 10 p.c of whole 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 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 principal roadblocks is state-owned electrical utility Eskom. Eskom has dominated the availability 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 fee of 16 South African rand to the greenback), and famous of their annual report that working cashflow was insufficient to satisfy debt servicing necessities.
For the JETP to work as envisioned, Eskom wants to rework itself right into a extra useful market-maker that’s each financially self-sustaining and has the credibility to draw personal 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 impartial oversight. Nevertheless, this stays an ongoing course of, and the final word impact it would have on the South African power 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 p.c between 2021 and 2025 as a sequence of worth will increase on customers went into impact. Even so, internet money from operations stays insufficient to cowl debt servicing and funding in renewable power is beneath goal.
Subsequent yr is the tip of South Africa’s preliminary five-year JETP timeframe. Whereas Eskom is now transferring towards a sounder monetary and operational footing, the restructuring course of has taken longer than anticipated and customers and the state have shouldered many of the prices. Whether or not these prices will probably be justified by unleashing the hoped-for wave of personal funding stays to be seen. Curiously, lots of the points slowing down South Africa’s JETP implementation may also 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 similar components as South Africa’s. The preliminary dedication was $20 billion in power transition funding, half of which was to return from the personal sector at market charges. Whole funding wants by means of 2030 have been estimated at $97 billion, which 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 personal funding.
The JETP aimed for peak emissions in 2030, with renewable power anticipated to account for 34 p.c of whole electrical energy technology 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 power sector extra enticing to non-public traders and builders.
As of early 2026, the JETP is not on time. In accordance with the 2025 Progress Report, $2.9 billion of mortgage or fairness funding had been authorized below the JETP framework. Nevertheless, this contains $1.8 billion from JICA to finance the development of the Jakarta Mass Speedy Transit system. This mission, 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 authorized funding has been allotted for particular clear power tasks. Consequently, few utility-scale photo voltaic or wind tasks have reached monetary closing or entered building in Indonesia since JETP was launched. Lots of people who have, such because the Cirata floating photo voltaic farm, have been completed outdoors of the JETP framework. The CIPP envisioned Indonesia producing at the very least 2 p.c of its power from photo voltaic and wind by 2025, however the realized quantity is a fraction of that. Attaining the 14 p.c goal by 2030 will probably be difficult.
A serious impediment is that the pursuits of key stakeholders have struggled to align. A crucial 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 customers in step with greater working prices, and eradicating home worth caps in order that coal may very well be purchased and bought 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 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 personal sector by dealing with tough preparatory duties corresponding to land acquisition. PLN would additionally develop a extra bankable contract template with favorable phrases for traders, corresponding to denominating funds to impartial energy producers in U.S. {dollars}.
If enacted, these enabling insurance policies would shift a lot of the market threat from personal sector traders and builders onto PLN and the Indonesian state, whereas asking for politically unpalatable concessions corresponding to elevating the value of electrical energy for Indonesian customers. The JETP reforms would successfully require PLN to surrender appreciable market energy and assume extra threat, one thing that the utility was not more likely to comply with.
The 2025 Progress Report acknowledges that some points 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 fresh power tasks by means of joint ventures with PLN. Regardless of the last 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-known components, with worldwide companions pledging $15.5 billion for clear power growth, half to return from the personal sector. Vietnam was skeptical from the start, agreeing to a preliminary framework and announcement after particular language was included, promising that at the very least $7.5 billion in financing can be made obtainable 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 nations, Vietnam is the one one which has skilled a transparent and unambiguous clear power 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, just about all of this exercise occurred outdoors of the JETP framework, and far of it earlier than the JETP was launched.
Speedy 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 consequently, solar energy grew dramatically from 2019 onward as builders rushed to get tasks in earlier than the deadline. Nevertheless it got here at a value, 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, but it surely additionally considerably diluted the utility’s market energy throughout the power 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 doubtless 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 power, Vietnam’s current efforts will be thought of a hit. However its capacity and urge for food for EVN to behave because the fulcrum for an additional massive spherical of fresh power tasks aimed on the personal sector, corresponding to these envisioned by the JETP, could also be restricted.
A Means Ahead?
The Simply Power Transition Partnerships in Indonesia, South Africa, and Vietnam pledged at the very least $44 billion for funding in clear power. A minimum of half of this was to return from the personal sector, and the recipient nations have been anticipated to undertake reforms to make their power sectors extra bankable and enticing to non-public traders. In all three instances, funding and mission growth have progressed extra slowly than anticipated.
When it comes to 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 enormous worth will increase on customers. Nevertheless, whereas the coverage surroundings could also be making incremental progress towards a extra market-friendly footing, it has not but unleashed an enormous growth in renewable power.
Confronted with an analogous package deal of coverage reforms, Indonesia has been much less receptive to alter. PLN and the federal government of Indonesia have largely been unwilling to make concessions on key points corresponding to eradicating worth caps on coal, elevating costs on customers, restructuring PLN or extensively de-risking clear power tasks to make them extra enticing to non-public 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 power tasks. It will 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 power and diminished emissions nonetheless exist for Simply Power Transition Partnerships? Definitely. The JETPs have all the time 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. Finally, the success of JETP and any clear power transition would require an sincere stock of key stakeholders, their pursuits and an equitable distribution of threat and reward between the personal sector, the recipient nations and the state-owned utilities which can be essential to attaining the imaginative and prescient of a cleaner power future.