A $9.3 billion climate financing deal to help South Africa transition to clean energy will continue despite the United States pulling out. Other international partners remain committed to the initiative.
The Just Energy Transition Partnership (JETP) was agreed upon during President Joe Biden’s tenure. The US had pledged $1 billion in commercial loans. However, President Donald Trump, who took office in February, has withdrawn support. A unit in President Cyril Ramaphosa’s office confirmed the US exit but gave no further details.
Despite this setback, the UK’s climate envoy, Rachel Kyte, remains optimistic. “The US withdrawal is regrettable, but the rest of the world moves on,” she said in Pretoria.
The JETP includes France, Germany, the European Union, the UK, the Netherlands, and Denmark. It aims to help South Africa reduce its reliance on coal, which generates about 80/percent of its electricity. South Africa has the most carbon-intensive economy among G20 nations. France and Germany have already provided €1.5 billion ($1.6 billion) in concessional loans.
Launched in 2021, JETP was seen as a model for funding the shift from fossil fuels. However, the program has faced challenges. Delays in financing, political changes in Indonesia and Vietnam—two other countries with similar deals—and difficulties in shutting down aging power plants have slowed progress.
In South Africa, frequent power shortages have fueled opposition to closing coal plants. Many of these plants are nearing or exceeding their mandated closure dates. The energy crisis has raised concerns about shifting to renewables too quickly.
JETP funding is only a small part of what is needed for a global energy transition. Global clean energy investments reached $2 trillion last year, accounting for only 37/percent of the financing required to achieve net-zero emissions by 2050.
Despite the US withdrawal, international partners are holding talks to keep the South African initiative on track, according to sources familiar with the discussions.