By: Muhammed Sayed

As governments and financiers converge in Belém for COP30, one message is becoming clear: the global energy transition will succeed or fail on the strength of its financing models. For developing economies, the challenge is not only to mobilise funds, but to do so in a way that creates jobs, reduces inequality, and strengthens resilience.

In South Africa, where the realities of climate change are already evident—from crippling droughts to floods that devastate livelihoods—the question is how to manage this transition fairly and efficiently. That is the ambition driving the collaboration between the Development Bank of Southern Africa (DBSA) and the Presidential Climate Commission (PCC) as they work together on the Just Transition Financing Mechanism (JTFM).

The JTFM is being designed as a catalytic finance platform to de-risk and crowd in capital for projects that deliver environmental, social, and financial value. It will focus on community- and labour-owned initiatives, as well as small and medium enterprises, bridging the gap between climate ambition and investable opportunity.

At COP30, the DBSA and PCC will host a joint side event exploring the JTFM’s design and its role in aligning climate finance with the principles of equity and inclusion. The discussion will gather national and international development finance institutions (DFIs), private investors, and policy leaders to identify ways to scale just transition financing across the Global South.

Shifting the Finance Paradigm

Traditional climate finance often flows to large-scale infrastructure or utility-led projects. While critical, these models rarely reach local actors—the small enterprises, cooperatives and community organisations that anchor regional economies. The JTFM proposes a shift: finance that is distributed, inclusive, and catalytic.

By aggregating smaller projects, standardising due diligence, and using blended instruments, the mechanism aims to make local projects bankable. Crucially, it embeds distributive justice principles—ensuring ownership structures allow for fair sharing of benefits, risks and decision-making power.

In practice, this could mean financing worker-owned renewable energy cooperatives in coal transition zones, small enterprises offering green services, or community-led adaptation projects that strengthen water and food security. These investments are not merely social good—they are economic multipliers, generating local employment, driving demand, and enabling long-term resilience.

The partnership between the DBSA and PCC is grounded in a shared understanding: finance must serve people as much as it serves projects. Achieving this requires trust, knowledge, and credible pipelines.

The collaboration therefore prioritises:

Knowledge-building, so that both investors and affected communities understand and can influence the transition.

Trust-building, by ensuring alignment between public institutions, investors and workers.

Project preparation, to produce bankable, scalable investments that meet both financial and social criteria.

By combining the DBSA’s financing and structuring expertise with the PCC’s policy leadership and stakeholder engagement, the partnership provides a bridge between policy ambition and financial execution.

Lessons for Emerging Markets

Although South Africa’s transition challenges are distinctive, the JTFM’s architecture offers lessons across the Global South. Many developing countries face the same balancing act: advancing decarbonisation while preserving social stability and economic inclusion.

A one-size-fits-all financing approach designed in the Global North cannot meet this complexity. Instead, country-led financing mechanisms like the proposed JTFM—rooted in national contexts but globally informed—provide a model for how public development banks can mobilise both concessional and private capital.

At COP30, the DBSA–PCC side event will contribute to a broader dialogue within the International Development Finance Club (IDFC) and allied DFIs on how to expand such models through peer learning and co-investment platforms.