The coalition is aimed at helping developing countries transition from coal to renewable energy.  

The decision is expected to have far-reaching consequences for nations like South Africa (SA), Indonesia, and Vietnam. For SA, this means the loss of over $1 billion in US investment that had been earmarked for its Just Energy Transition Partnership, a key part of the country’s effort to shift from fossil fuels to sustainable energy sources.

Along with this withdrawal, the US also pulled out of the Loss and Damage Fund, a financial mechanism designed to assist vulnerable countries in addressing the devastating impacts of climate change. The loss of these resources raises concerns over the future of global climate cooperation, particularly for countries like SA that are highly dependent on external funding to facilitate their energy transitions.

To understand the implications of these developments, in an interview Blessing Manale, Executive for Communications and Stakeholder Relations at SA's Presidential Climate Commission expressed his concern over the US’s decision, calling it a major setback for SA’s climate goals.  

He reflected on the broader impact of the withdrawal, “It is regrettable that the US has decided to step back from its commitment to global climate action, especially when such pledges were made under the Paris Agreement and the United Nations Framework Convention on Climate Change agreements supported by over 140 nations. One country’s decision to withdraw threatens the multilateral systems we rely on.”

For SA, the immediate concern is the substantial financial loss. Manale explained, “The US commitment was not just a billion-Dollar investment; it included $20 million in technical assistance and grants. This is crucial funding for small non-governmental organisations and local communities, especially those working on non-bankable projects like the development of green hydrogen and electric vehicle production.”

The US withdrawal will also hinder SA’s efforts to move away from coal dependence and invest in renewable energy infrastructure. However, Manale remained hopeful about the country’s ability to find alternative sources of funding. “We will need to engage with other international partners, particularly in Europe and Japan, to make up for this shortfall. More importantly, we must continue building a business case for green investments within SA itself. There is enormous potential in our renewable energy sector, and we cannot afford to lose sight of that.”

While SA’s energy mix will still rely on fossil fuels like coal and gas in the short term, Manale stressed that the country’s long-term goals remain focused on sustainability. “Renewables are essential not only because the costs are coming down but because the environmental costs of fossil fuels are unsustainable. We need to stay committed to clean energy, not for the US, but for the health of our communities, our rivers, and our future.”

Looking to the future, Manale outlined strategies that the Presidential Climate Commission is considering mitigating the impact of the US withdrawal. “We will be closely monitoring the national budget and exploring opportunities to optimise measures already in place, like carbon taxes and incentives for renewable energy projects. But the key to our success lies in forging stronger regional alliances within Southern Africa, boosting local manufacturing capabilities, and finding new investors who are equally committed to our green future.”

The challenges of securing adequate climate financing are not unique to SA. Many developing countries face similar struggles in obtaining the funds needed to adapt to climate change. Manale pointed out that loans are often not concessional, and they come with heavy burdens, including increased national debt and demands for access to natural resources. “For African nations, the climate crisis is urgent, and we must not allow delays in funding to derail our development. We are the most vulnerable, yet we have the least resources to manage the consequences.”

Despite these challenges, Manale was confident that SA and other African nations would find ways to navigate these turbulent waters. “Our commitment to fighting climate change remains unwavering. We must continue working with our international partners and explore innovative solutions, just as we did during the COVID-19 pandemic with the Solidarity Fund. Our strategy must evolve, but we will not be deterred.”

--ChannelAfrica--