How JETPs can accelerate our path to net zero
Recent years have shown the convening power of the region in bringing climate leaders together, with COP27 in Egypt last year and the UAE hosting COP28 this year.
One of the specific areas I work on is just energy transition partnerships (JETPs), which are growing in popularity around the world. They bring stakeholders together to enable a clean, fair energy transition in emerging economies that rely heavily on coal.
Essentially, they’re multilateral financial agreements aimed at accelerating the phase-out of fossil fuels, in a way that addresses the social consequences of doing so.
The model first gained attention in 2021, when an USD 8.5 bn deal was announced for South Africa in partnership with France, Germany, the UK, US, and EU. This was followed by a USD 20 bn package for Indonesia and a USD 15.5 bn agreement for Vietnam last year.
Christian Déséglise is HSBC’s group head of sustainable infrastructure and innovation.
A JETP allows the key players to work together on designing, funding, and implementing a plan that’s tailored to the country’s specific needs and characteristics. It’s underpinned by a commitment from the country to step up its climate ambitions, against the promise of funding and support from its external partners.
Most agree that we need to transition away from carbon-intensive energy sources, but we can’t simply pull the plug overnight — the transition needs to take account of energy needs across emerging economies. That’s why the third goal of JETPs is to implement policies that support affected communities — for example, ensuring workers in coal regions can access retraining.
We want to play our part in supporting the transition to a more sustainable world. That’s a key part of HSBC’s strategy as a business. We’re a global bank, but with strong local knowledge in many markets across the world, particularly here in the Middle East. We can bring our local knowledge and local footprint to the global community driving the partnerships.
On a regional front, in July 2022 ahead of COP27, Egypt announced its Nexus for Water, Food and Energy (NWFE) program, the country’s just transition platform to identify priority projects across those three pillars that will give momentum to its transition.
At COP27, we became a founding member of a working group that will support the Egyptian government to deliver on its commitments under the energy pillar and to help identify ways of overcoming barriers to private investment and innovative approaches to attracting private finance at the necessary scale.
Recently, we’ve played a key role in helping to finance a new onshore 500-MW wind farm which is part of Egypt’s NWFE program in the Gulf of Suez area. The project is set to be Africa’s largest. It’s early days for these agreements and they are long-term initiatives. But if successful, I believe they can provide a template for decarbonisation across the world.
Christian Déséglise is HSBC’s group head of sustainable infrastructure and innovation.
This article first appeared on Enterprise here.