Just Energy Transition Partnership (JETP)
A financing agreement between a coal-dependent emerging country and a group of wealthy countries and banks, to speed up its exit from coal without sacrificing jobs.
A country whose electricity relies on coal cannot close its plants without funding new capacity, the grid that connects it and the conversion of mining regions all at once. The partnership brings donor states, development banks and sometimes private banks together around a national investment plan, in exchange for dated emission reduction targets. The announced amount mixes grants, concessional loans, guarantees and commercial financing, and that mix makes all the difference for the recipient country: a market-rate loan adds debt where shared risk was needed. For insurance and reinsurance, these plans create demand for construction, political risk and credit cover on renewable energy projects in countries rated below investment grade.
The first partnership was announced for South Africa at COP26 in Glasgow in November 2021, for 8.5 billion dollars; Indonesia followed in November 2022, for 20 billion, and Vietnam in December 2022, for 15.5 billion.
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