New report on Just Energy Transition Partnerships recommends piloting new approach in the Philippines
NEW YORK, Feb. 15, 2024 /PRNewswire/ — The Rockefeller Foundation released a roadmap to make Just Energy Transition Partnerships (JETPs) a more effective vehicle for transforming energy systems in low- and middle-income countries. “Scaling the JETP model – prospects and pathways for action” details lessons learned from the first wave of JETPs, identifies roadblocks to the current model, and proposes pathways to scaling JETPs in ways that benefit vulnerable communities. Specifically, The Rockefeller Foundation recommends piloting a new approach to JETPs in a country such as the Philippines, developing a more effective on-ramp for the next wave of interested countries, elevating the role of Multilateral Development Banks (MDBs) in the process, and broadening and deepening support from donor countries.
“There is strong interest from the Philippine private and public sectors in scaled financial packages to support the country’s Energy Transition Plan with focus on fast renewable energy (RE) development, building critical offshore wind port infrastructure, modernizing into a smart and green grid, and incentivizing voluntary early decommissioning and/or repurposing of coal plants,” said Dr. Rowena Cristina L. Guevara, Undersecretary of the Department of Energy, Republic of the Philippines. “International partners must come together to explore how key strategic projects of that Plan can be financed, and the country’s goal of reaching an RE share of more than 50% by 2040 expedited.”
A significant gap remains between global aspirations on climate action and the real pace of national transitions, especially among emerging and developing countries. To address this challenge, South Africa, Indonesia, Vietnam, and Senegal signed four JETP deals from 2021-2023 with the International Partners Group (IPG) of donors to accelerate the pace of their energy transitions. While JETPs are a political and financial innovation, the process to date has been slow, and the financing has failed to flow as quickly or at the scale initially promised.
“To date, JETPs have been long on promise but short on progress. Our new report offers a clear-eyed assessment of what is working, what is not, and what can be done to realize the potential of these political and financial innovations,” said Dr. Rajiv J. Shah, President of The Rockefeller Foundation. “While JETPs are only one piece of the energy transition puzzle, they could and should play a bigger, more effective role in empowering vulnerable people in emerging and developing economies with clean energy.”
Action Pathways to More Effective JETPs:During the six dialogues, co-organized by The Rockefeller Foundation and Environmental Defense Fund (EDF), during the second half of 2023, 250 global stakeholders, experts, and practitioners drilled down into what’s holding the current model back as they are currently structured. The report identifies several barriers to scaling JETPs, which include announcing a political deal before negotiating a high-level investment plan, insufficient amounts of available concessional capital, lack of clarity around country demand for future JETPs, inconsistent role for the MDBs. and the heavy political burden this model has placed on the IPG.
To better facilitate a next wave of countries interested in JETP-like packages of support, such as Colombia, Kazakhstan, Kenya, Mexico, Mongolia, Nigeria, the Philippines, and Thailand, among others, the JETP model needs to evolve. To that end, The Rockefeller Foundation’s new report proposes four distinct, complementary, and mutually reinforcing action pathways:
Experimenting with a JETP “country platform” model.As opposed to the existing JETP model, which begins with a high-level political deal, a country platform approach would provide a nationally owned institutional venue that can bring together domestic policy makers, international investors, and technical experts. This type of platform could oversee and manage a technical and negotiation process to develop a nationally appropriate investment plan – one which emerges from a technical process owned and overseen by a national government.
A coordinated country demand signal.Although a second wave of countries have expressed interest in JETP-like packages of support, there are no established pathways or processes for these countries to follow to engage the international community. A clearer collective demand signal from countries could help set the international agenda, especially if they could align on the set of reforms required by the international financial system to respond to this demand signal.
More pronounced MDB leadership.Successful country platforms are likely to require leadership from at least one MDB, such as the World Bank, Africa Development Bank, Asia Development Bank, Inter-American Development Bank, and others. These institutions could play a more prominent role in designing JETP packages, financing key projects, and helping blend in other types and sources of capital at the project level, while supporting the design and execution of each package.
Broadening and deepening the IPG group of donors.Expanding IPG to include new members could mobilize greater quantities of new and additional concessional finance. The report also recommends shifting away from the current model, where individual IPG members make discrete offers, to a more collaborative approach where the entire group offers comprehensive JETP packages. Additionally, it advocates for a more proactive engagement in the country platform approach for future deals.
Piloting a Way Forward in the Philippines:The Rockefeller Foundation intends to use the action pathways identified in this report to guide its continuing work in this space. As a next step, the report recommends greater philanthropic support for developing and resourcing the country platform model by piloting the new approach in countries such as the Philippines. Since 2022, The Rockefeller Foundation has collaborated with Climate Smart Ventures (CSV) to assess a possible JETP in the country. This initial work identified the need for approximately $9 billion in immediate investment capital to support near-term energy transition priorities and revealed a preference for a nationally owned platform to fund these investments, in line with the recommended country platform approach.
“If successful, the lessons learned from piloting a JETP country platform approach in the Philippines could be tailored to work in other countries. As this report makes clear, philanthropy could play a critical role in supporting the technical work needed to make that possible. More broadly, advancing the Action Pathways identified in this report should feed into the G7, G20, COP and other conversations in the year ahead,” said Dr. Joseph Curtin, Managing Director of Power and Climate at The Rockefeller Foundation, who drafted the report with inputs from Claire Healy, Senior Associate at E3G, and Mandy Rambharos, Vice President for Global Climate Cooperation at EDF.
About The Rockefeller FoundationThe Rockefeller Foundation is a pioneering philanthropy built on collaborative partnerships at the frontiers of science, technology, and innovation that enable individuals, families, and communities to flourish. We make big bets to promote the well-being of humanity. Today, we are focused on advancing human opportunity and reversing the climate crisis by transforming systems in food, health, energy, and finance. For more information, sign up for our newsletter at rockefellerfoundation.org and follow us on X @RockefellerFdn.
SOURCE The Rockefeller Foundation
