Yellen: Power cuts a 'considerable challenge'
Lisa Steyn - US Treasury Secretary Janet Yellen has described load shedding as a "considerable challenge" for doing business in South Africa, but said there are still solid fundamentals which are supportive of investment."South Africa has very strong fundamentals, in many ways a strong constitutional system with courts that work well, a legal system that enforces contracts and does other things that are critical to business; a very strong financial sector; a wonderful set of educational institutions – universities and [other] training making available a very skilled workforce," she said.
While there are "absolutely" challenges, especially in the energy sector, Yellen said a raft of structural reforms announced by president Cyril Ramaphosa, "if carried through", will assist in addressing some critical challenges.
Yellen, who has had first-hand experience of load shedding during her trip to South Africa last week, spoke to media following a tour of the Nkangala TVET college - a US-funded job training facility in Emalahleni that is providing skills to local women to prepare them to work in the renewable energy sector.
Yellen said she was pleased to see first-hand the difference that a just energy partnership can make in advancing the energy transition in such communities.
RELIABLE
"The investments that our governments and the private sector are making in renewable energy will play a critical role in creating good paying jobs and reliable sources of clean energy that will power South Africa's economic growth," she said.
"Facilitating a transition that leaves no one behind requires job retraining and reskilling, like we saw today. It also requires the redevelopment of former fossil fuel and power sites and investments in infrastructure to support the development of new industries and economic opportunities. And that is exactly what the United States is committed to do."
The commitment will be facilitated through an US$8.5 billion funding package which the US and other developed nations will provide to South Africa in aid of its move away from coal-fired power.
US president Joe Biden has also made an additional commitment of US$45 million in grant funding (over and above more than US$1 billion committed) to support South Africa's efforts to ensure the transition is just.
Having met with President Cyril Ramaphosa and Mineral Resources and Energy Minister Gwede Mantashe during her SA visit, Yellen said the US is trying to support SA's plans, which it has devised itself and involve a gradual transition and a recognition that affected communities need to be supported.
"The jobs are important, and we emphasised that the 'just' piece of JETP is critically important to us. It's something we are interested in and committed to supporting," she said.
The US$8.5 billion is intended to be a foundation upon which South Africa will raise exponentially more private sector funds for its transition.
CORRUPTION
Asked whether corruption concerns might be an impediment to raising those funds from the private sector, Yellen said addressing corruption is critical for the business environment but that the US was encouraged by Ramaphosa's focus on tackling this issue.
She said a set of organisations had voiced their concern about the need for a just transition. "And we think with a plan in place here in South Africa, and the just part [of the transition] being extremely important. We wanted to talk to them about their willingness to step up, and to help contribute to making this a just transition."
Later on Friday, Yellen met with various philanthropic organisations in Johannesburg to discuss their support for the transition. "An energy transition that is not just simply won't work", she said.
"We must demonstrate quickly that these coal communities, which are already struggling with unemployment, poverty, and the health impacts of coal mining and emissions, will not be left behind in the context of an energy shift ... South Africa will need to see concrete action soon to keep up momentum of the JETP." – Fin24