Agreements to donate finance to support clean energy transition of South Africa, Indonesia and Vietnam are cancelled ‘effective immediately’ by US
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In the latest example of the US retreating from international agreements, President Trump has withdrawn the country from a climate agreement that required wealthy nations to contribute billions of dollars towards supporting environmental improvements in a group of small developing countries.
Formed back in 2021, the climate agreement, known as Just Energy Transition Partnerships (JETP), is essentially a myriad of deals between wealthy and developing countries that help the latter transition to greener energy sources instead of using coal to produce power. Crucially, these deals are formulated in a way that financially supports the countries’ economies as they switch to cleaner energy alternatives since many of them rely heavily on the money generated through their coal-fired power plants.
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South Africa – one of the countries receiving financial aid from the agreement (totalling $13.8 billion across all donating nations) – had reported receiving notice the US had withdrawn from the International Partners Group (IPG), the bloc of rich countries pledging money which includes nations such as Germany, France, Canada, the UK, Norway and Denmark.
According to the South African governmental website, grant projects that were previously funded, or planned to be implemented, have been cancelled. In total, estimates from the office of South African President Cyril Ramaphosa suggest a US withdrawal from the IPG would mean South Africa loses out on more than $1 billion in future investment pledges; vital finance that would help transition the country from planet-polluting coal power stations to greener alternatives.
Currently, the nation generates around 80 per cent of its electricity through coal.
Effective immediately, the US has declared a withdrawal from its agreements from two other countries: Indonesia and Vietnam.
In Indonesia, future funding for the country’s energy transition programme – which was provided by the US aid agency, and the US Department of Energy – has now been cancelled. However, according to Indonesia’s JETP Secretariat head Paul Butarbutar, the overall pledge of $21.6 billion from private and public donors will remain unchanged.
