US exits $9.3 billion climate deal with developing nations

The United States has withdrawn from the Just Energy Transition Partnerships (JETP), a multi-billion-dollar initiative launched in 2021 to help emerging economies move away from coal and other non-renewable energy sources.

Other partners, including France, Germany, the European Union, the UK, the Netherlands, and Denmark, remain committed to the program.

The US exit will strongly affects South Africa and Indonesia, which are among the beneficiaries of the program.

According to a statement from South African President Cyril Ramaphosa’s office, grant projects that were previously funded ''and in planning or implementation phases have been canceled.''

Billions for projects in South Africa, Indonesia and Vietnam

Indonesia’s JETP Secretariat head, Paul Butarbutar, confirmed that the US embassy in Jakarta informed him of Washington's decision, citing an executive order from President Donald Trump.

He noted that while the $21.6 billion (€20.70 billion) pledge from private and public donors remains unchanged, the US withdrawal will impact transition studies and grant funding in Indonesia.

Under the South Africa agreement, the country was promised $56 million (€52.37 million) in grants and an additional $1 billion in potential commercial investments. Similar agreements were made with Indonesia and Vietnam.

The JETP initiative has struggled to deliver many of the intended objectivesImage: Eskom/dpa/picture alliance

UK climate envoy Rachel Kyte called the US withdrawal ''regrettable'' but reassured South Africa that “the rest of the world moves on.”

Can South Africa afford a green transition?

South Africa is one of the world’s largest polluters, with coal generating 80% of its electricity. Energy Minister Kgosientsho Ramokgopa stated, ''Our commitment to a just energy transition is not conditional on other sovereign powers.''

However, frequent power outages plaguing the country have fueled political opposition to closing coal plants.

The JETP was hailed as a breakthrough in 2021, offering a model to bring public and private funding together to support clean energy transitions in developing nations. However, progress has been slow to implement due to financing challenges, leadership changes in Indonesia and Vietnam, and the complexities of shutting down power plants.

Edited by: Darko Janjevic