(Bloomberg) -- The main labor union at South Africa’s state power utility called for the suspension of an $8.5 billion climate finance pact with some of the world’s richest nations as well as plans to break up Eskom Holdings SOC Ltd. into separate units.

Under the Just Energy Transition Partnership, South Africa agreed to begin moving away from generating electricity from coal, the dirtiest fossil fuel, to producing more renewable energy using financing from Germany, France, the UK, the US and the European Union. As part of a broader transition plan, which didn’t use funding from the so-called JETP, Eskom last year shuttered its Komati coal-fired power plant, with more closures slated to follow.

The National Union of Mineworkers, which represents the most workers of any union at Eskom, wants further consultations on the transition plan because of the threat it poses to as many as 51,000 jobs, it said in a statement on Monday. It also wants more talks on plans to split Eskom into generation, transmission and distribution units, which the government says is aimed at improving their performance as the country battles record power outages.

“There is a clear lack of consultation with organized labor regarding the unbundling of Eskom, the drafting of the JETIP, as well as decommission of Komati power station,” the NUM said. The JETIP is an acronym for the Just Energy Transition Investment Plan, the completion of which is a necessary step for funding to flow from the rich nations. South Africa has repeatedly delayed its completion.

Prototype Pact

The labor union’s demands add to criticism of the JETP by South African Electricity Minister Kgosientsho Ramokgopa and Energy Minister Gwede Mantashe, who’ve said the country is being used as a “guinea pig” for a transition to renewable power. All of the funding partner countries are significantly further advanced in their own energy transitions than South Africa is. 

The JETP, first announced at the COP26 climate summit in Glasgow in 2021, is seen as a prototype for similar agreements being pursued with Indonesia, Vietnam and Senegal. 

A report released by South Africa’s Presidential Climate Commission on Friday laid the blame for poor communication and lack of consultation with workers and communities at Komati at the government’s door. It also said Mantashe and Ramokgopa had caused confusion by saying Komati could have been kept open when it had, in fact, reached the end of its operational life.

While a change from high-emission energy production to low-emission is necessary, the move should be “fair and just” to workers and their communities, the NUM said. It estimated that about 25,000 direct jobs and 26,000 indirect jobs would be lost if the process is conducted too hastily.

“The energy transition which is taking place must be put on hold until such time that we are all convinced that the transition process will be fair,” it said.

--With assistance from Antony Sguazzin.

©2023 Bloomberg L.P.