The EBRD’s Just Transition Initiative (JTI) was launched in 2020, with an aim to ensure that the benefits of the green economy transition are shared, while protecting vulnerable countries, people and regions from falling behind.
The Initiative combines EBRD’s ‘green’ and ‘inclusive’ strategic priorities. It is guided by its Green Economy Transition approach and Economic Inclusion Strategy, the Bank helps its countries of operations to achieve a just transition by harnessing the power of the private sector to accelerate the transition towards sustainable and inclusive market economies.
JTI is critical to ensuring societal buy-in for accelerated decarbonisation via a stakeholder engagement process and targeted support across three pillars:
The EBRD’s experience of supporting economic inclusion through private sector investments and associated policy engagement to achieve structural change provides the basis for its approach to supporting vulnerable communities and workers as part of a just transition.
Further insights have emerged from a wide review of literature on the transition away from carbon-intensive sectors in other geographies. These are centred on the role of strategic planning, strong institutions and the need for a range of different interventions.
Since the launch of the Initiative, the EBRD has embraced the agenda via both policy and investments. On the policy side, we are supporting Governments in integrating just transition considerations into key climate documents and regional development strategies, as well as the development of critical skills and labour market reforms.
The EBRD has also launched its flagship product – Just Transition Diagnostics and Action Plans to analyse the effects of accelerated decarbonisation scenarios on the carbon-intensive regions, labour markets and people, and identify new opportunities, including in relation to economic diversification. This has led to the development of action plans across governance, policy and investment dimensions to support a just transition. We have three active assignments – in North Macedonia with European Union Delegation, as well as in Serbia and Ukraine (on hold) with support from Climate Investment Funds in the context of green C-19 recovery.
On the investment side, we are delivering on just transition projects and investment mobilisation. A recent example includes a loan to JSC Elektrani na Severna Makedonija ("ESM") in North Macedonia for the deployment of solar PV on the site of a former coal mine. This is accompanied by support for targeted labour market initiatives at the regional and national levels to safeguard livelihoods for the local workforce. Another example is the EBRD’s participation in a bond issued by Tauron Polska Energia S.A, the largest electricity distributor in Poland, for distribution grid and renewable energy investments. As part of this project, we support the company’s decarbonisation strategy and, importantly, the re-skilling of workers in the heavily coal-reliant region of Silesia.
The EBRD has been active in international just transition fora. In 2021, as a chair of MDB Working Group on just transition, we helped to launch Principles for MDB Support for a Just Transition at COP26. The EBRD is also an active participant in the Coal Regions in the Western Balkans and Ukraine Platform, an initiative led by the European Union, as well as a member of the ILO’s Climate Action for Jobs Working Group on and just transition. We are also working closely with the European Training Foundation.
So what lies ahead for EBRD on just transition? Apart from continuing our work in the aforementioned areas, we are scaling-up our involvement in three dimensions:
We stand ready to continue supporting our clients in accelerating inclusive green economy transition, as well as working with partners to mobilise financing and technical support for these objectives.
