The US is stalling the distribution of US$2.6-billion (R47-billion) in climate finance to South Africa, stoking concerns the money might be blocked outright, people familiar with the situation said.
At a meeting earlier this month, US representatives prevented the World Bank-linked Climate Investment Funds from approving a $500-million disbursement to South Africa, two of the people said, asking not to be identified because a public announcement hasn’t been made on the matter.
Those funds would have unlocked a further $2.1-billion from multilateral development banks and other sources of financing. Another attempt to approve the payment may be made at CIF meetings in June, four of the people said.
The development has the potential to deepen a fallout between the nations. The administration of President Donald Trump has already halted aid to South Africa, declared its ambassador to the US a “persona non grata”, and accused the country of expropriating land. South African authorities haven’t confiscated any private land since the end of apartheid in 1994.
Those tensions come on top of a wider US pullback from global climate initiatives.
Shortly after his inauguration, Trump promised to yank the US out of the Paris Agreement, an international climate pact. He also cancelled a pledge of $4-billion to another international climate institute, the Green Climate Fund, and withdrew from plans backed by rich nations to help Indonesia, Vietnam and South Africa reduce their reliance on coal. That last step has already cost South Africa $1-billion in loans.
Blocked
Disbursements by the CIF can be blocked if any of the 15 nations that have contributed to the $12.5-billion in funds it oversees object or ask for more time to seek additional details on what the funds will be used for, and under what conditions. It’s unclear which approach the US took to thwart the approval process.
A US treasury spokesman declined to comment.
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“Member deliberations are not made public. Documents are published once approved,” the CIF said in response to questions. The unit in the South African presidency responsible for climate finance declined to comment.
As of the end of 2024, of the 15 contributors to the CIF, the US is the biggest, having provided $3.8-billion. It’s closely followed by the UK at $3.6-billion. Germany, Japan and Canada have each contributed more than $1-billion.
South Africa could have secured the money late last year when the Biden administration was still in office, but opted to delay the process in order to alter the terms of the pact. It sought to keep three coal-fired power plants open beyond the 2030 deadline it had originally set.
Losing the funds would be another blow to South Africa’s bid to pay for the roll-out of green energy and close the coal-fired power plants that supply more than 80% of its electricity, making it the most carbon-intensive economy of any nation with a population of more than four million people. — (c) 2025 Bloomberg LP
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