US Delays $2.6 Billion Climate Aid To South Africa

The United States has delayed the disbursement of $2.6 billion in climate finance to South Africa, raising concerns that the funds may be blocked altogether. According to sources familiar with the matter, US representatives recently prevented the World Bank-linked Climate Investment Funds (CIF) from approving a $500 million payment to South Africa. The sources, who requested anonymity due to the lack of a public announcement, stated that the funds would have unlocked an additional $2.1 billion from multilateral development banks and other financing sources.

Another attempt to approve the funds may occur during CIF meetings in June, sources indicated. This delay could worsen the already strained relations between the US and South Africa. The Trump administration had previously suspended aid to South Africa, labeled its ambassador as “persona non grata,” and accused the nation of expropriating land. However, since the end of apartheid in 1994, South Africa has not confiscated any private land.

The ongoing tensions between the two countries also coincide with a broader US retreat from global climate initiatives. Shortly after taking office, former President Donald Trump announced his decision to withdraw the US from the Paris Agreement, a global climate pact. He also canceled a $4 billion pledge to the Green Climate Fund and withdrew support for efforts aimed at reducing coal reliance in countries such as Indonesia, Vietnam, and South Africa. As a result, South Africa has already lost $1 billion in loans due to the US withdrawal.

CIF disbursements can be blocked if any of its 15 contributing nations object or request more time to assess the usage and conditions of the funds. It remains unclear whether the US used this process to hinder the approval of the funds for South Africa.

A spokesperson for the US Treasury declined to comment, while CIF stated that member deliberations are confidential, and documents are published only once approved. The unit responsible for climate finance in the South African Presidency also declined to comment.

As of the end of 2024, the US is the largest contributor to CIF, having provided $3.84 billion, closely followed by the UK at $3.63 billion. Germany, Japan, and Canada have each contributed over $1 billion.

South Africa had an opportunity to secure the funds late last year when the Biden administration was still in office but opted to delay the process to renegotiate the terms of the agreement. The country sought to extend the operation of three coal-fired power plants beyond the originally set 2030 deadline.

The potential loss of these funds would deal a significant blow to South Africa’s efforts to finance the transition to green energy and close its coal-fired power plants, which currently provide more than 80% of the nation’s electricity. South Africa remains the most carbon-intensive economy among countries with a population exceeding four million people.