The United States has decided to pull out of a significant climate funding initiative aimed at assisting developing countries in transitioning to cleaner energy sources. This decision affects South Africa and Indonesia, two nations that were among the first beneficiaries of the Just Energy Transition Partnerships (JETP). The JETP is an ambitious financing arrangement between wealthy countries and emerging economies to reduce reliance on coal, a major contributor to environmental pollution. South Africa secured its deal in 2021, while Indonesia's agreement was announced in late 2022. The US withdrawal, attributed to executive orders issued by President Trump, has raised concerns about the future of these projects.
In a statement, South Africa’s government acknowledged the US decision to withdraw from the partnership. The notification came from the US Embassy on February 28, 2025, citing specific executive orders from January and February. Despite this setback, the South African government remains committed to pursuing clean energy transition through alternative partnerships and private sector involvement. Meanwhile, Indonesia's JETP Secretariat confirmed similar information regarding the US withdrawal, noting that the overall pledge of $21.6 billion remains intact but could affect certain aspects of the transition process.
The US had initially pledged substantial financial support for both countries: $56 million in grants and up to $1 billion in potential commercial investments for South Africa. This move leaves South Africa with $12.8 billion in remaining pledges. The JETP was introduced during UN climate talks in Scotland in 2021, backed by several developed nations including France, Germany, Britain, Canada, and the European Union. South Africa, along with Senegal, Vietnam, and Indonesia, were named as the initial recipients of this support.
Tensions between Pretoria and Washington have escalated over various policies, particularly concerning land ownership laws and foreign policy disagreements, notably over the conflict in Gaza. Despite these challenges, South Africa's Energy Minister emphasized the country's unwavering commitment to achieving a just energy transition, stating that it would not be contingent on external influences. As one of the largest polluters globally, generating approximately 80% of its electricity from coal, South Africa aims to explore new avenues for sustainable development.
Africa's most industrialized nation faces significant challenges in reducing its carbon footprint. However, the determination to move forward with clean energy initiatives remains strong. While the US withdrawal may impact some aspects of the transition, South Africa and Indonesia are exploring alternative strategies to ensure progress towards a greener future. Collaboration with the private sector and other international partners will play a crucial role in this endeavor.