South Africa, Indonesia say US withdrawing from climate finance deal

South Africa generates most of its electricity through coal – Copyright Intuitive Machines, LLC/AFP HANDOUT

The United States has pulled out of a climate funding deal struck by rich nations to help their developing counterparts transition to clean energy, the programme’s first beneficiary South Africa and Indonesia said Thursday.

The so-called Just Energy Transition Partnerships (JETP) are ambitious financing deals between a small group of wealthy countries and emerging economies to help them ditch planet-polluting coal. 

Coal-rich but energy-starved South Africa was the first developing country to reach a deal on a JETP in 2021. Indonesia’s partnership for more than $20 billion in financing to wean itself off coal was unveiled in late 2022.

But the United States has withdrawn from its multi-million-dollar deal with Pretoria under President Donald Trump’s administration, a unit in South Africa’s presidency said in a statement. 

“The Just Energy Transition Project Management Unit in the Presidency acknowledges the decision of the United States of America to withdraw from the Just Energy Transition Partnership with South Africa,” it said.

“The South African government was formally informed of this decision by the US Embassy on 28 February 2025,” the statement read, adding that Washington had cited executive orders by Trump in January and February.

Indonesia’s JETP Secretariat head Paul Butarbutar confirmed the US embassy in Jakarta informed him Tuesday of Washington’s decision to withdraw.

“Correct… it is part of the executive order,” he told AFP when asked if the Trump administration had ordered the withdrawal.

Butarbutar said the pledge of $21.6 billion from private and public donors remained unchanged, but expected the US withdrawal to impact transition studies and the issuance of grants.

“My understanding… is the US will still collaborate with Indonesia for development of renewable energy and other forms of energy, as long as it is still in line with US interests,” he said.

The United States had pledged $56 million in grants to the South African initiative and an additional $1 billion in potential commercial investments.

Introduced during the UN climate talks in Scotland in 2021, the initiative’s backers counted France, Germany, Britain, Canada and the European Union. 

South Africa alongside Senegal, Vietnam and Indonesia were named as the first recipients of the support.

The US withdrawal leaves South Africa with $12.8 billion in pledges, Pretoria said. 

Pretoria and Washington have been at odds over a range of policies, including a recent land ownership law. 

Trump, whose tycoon ally Elon Musk was born in South Africa, last month froze aid to the country over the law that he alleges, without evidence, would allow land to be seized from the white minority.

The claims came in an executive order, which also noted foreign policy clashes between the United States and South Africa over the war in Gaza, particularly its genocide case against Israel at the International Court of Justice.

South Africa last week said it would push on with the clean energy transition and would explore partnerships with the private sector.

“Our commitment to a just energy transition is not conditional on other sovereign powers,” Energy Minister Kgosientsho Ramokgopa told reporters on the sidelines of a Group of 20 leading economies meeting.

Africa’s most industrialised nation is one of the largest polluters in the world and generates about 80 percent of its electricity through coal.