The United States is postponing a US$2.6 billion climate finance package for South Africa, raising fears it may be entirely blocked. This delay, due to US objections at Climate Investment Funds meetings, jeopardizes access to additional funding from multilateral banks, further straining US-South African relations amidst broader US withdrawal from climate initiatives.
The United States is currently delaying the distribution of a US$2.6 billion climate finance package intended for South Africa, which raises concerns that the funds may be permanently blocked. Reports indicate that US representatives obstructed the Climate Investment Funds (CIF) from approving a US$500 million disbursement at a recent review. This initial funding would have unlocked an additional US$2.1 billion from various multilateral development banks and financing sources.
A potential subsequent attempt to approve the funding is scheduled during CIF meetings in June. This controversy may exacerbate existing tensions between the United States and South Africa, particularly as President Donald Trump’s administration suspended aid to the nation, labeled its ambassador a “persona non grata,” and accused South Africa of land expropriation, despite the absence of such actions since apartheid’s end in 1994.
These tensions occur amid a broader US retreat from global climate initiatives. Following his inauguration, President Trump pledged to withdraw the United States from the Paris Agreement and rescinded a US$4 billion commitment to the Green Climate Fund, which supports various countries, including South Africa, in transitioning away from coal dependency. This policy shift has already impacted South Africa, costing it approximately US$1 billion in loans.
Disbursements managed by the CIF can be impeded if any of the 15 nations contributing to the US$12.5 billion fund raise objections or request additional details about the funds’ intended uses. It remains unclear how the United States effectively disrupted the approval process, as a US Treasury spokesperson declined to provide specific comments on the matter. The CIF stated, “Member deliberations are not made public. Documents are published once approved,” in response to inquiries from Bloomberg.
The South African Presidency’s climate finance unit also refrained from commenting on the situation. As of late 2024, the United States was the largest contributor to the CIF, providing US$3.84 billion, closely followed by the United Kingdom at US$3.63 billion. Other significant contributors include Germany, Japan, and Canada, each exceeding US$1 billion.
The delay in the US$2.6 billion climate finance package underscores escalating tensions between the United States and South Africa. With significant financial implications for South Africa’s climate initiatives, the situation reflects broader geopolitical strains and the United States’ withdrawal from international climate agreements. As discussions for possible approval continue, the outcome could have far-reaching effects on bilateral relations and broader climate collaboration efforts.
Original Source: www.thestar.com.my
