The United States has halted the USD 2.6 billion climate finance package for South Africa, raising concerns over funding potential blockage. Key actions by U.S. representatives prevented a critical USD 500 million disbursement from the Climate Investment Funds. The situation risks deepening diplomatic tensions as the U.S. continues its pullback from global climate commitments.
The United States has reportedly paused the allocation of USD 2.6 billion in climate finance intended for South Africa, raising fears that this funding may face an outright block. Recently, actions taken by U.S. representatives thwarted an approval by the Climate Investment Funds (CIF) for a USD 500 million disbursement designated for South Africa. This halted disbursement would also have enabled an additional USD 2.1 billion from other multilateral development banks and funding sources.
A subsequent attempt to gain approval for the necessary payment is expected during the CIF meetings scheduled for June. This situation has the potential to exacerbate tensions between the United States and South Africa. The administration under President Donald Trump has already suspended aid to South Africa, labeled its ambassador as a “persona non grata,” and accused the nation of land expropriation.
Contrary to these accusations, South Africa has not seized any private land since the apartheid era ended in 1994. This diplomatic friction aligns with a broader trend of the U.S. retreating from global climate initiatives. Shortly after his inauguration, President Trump announced the U.S. withdrawal from the Paris Agreement, discontinued a USD 4 billion commitment to the Green Climate Fund, and relinquished support for programs aiding Indonesia, Vietnam, and South Africa in reducing coal dependency, costing South Africa USD 1 billion in loans alone.
The CIF’s disbursements can be obstructed if any of the 15 contributing nations to its USD 12.5 billion fund express objections or request additional time for clarifications regarding the fund’s uses and stipulations. The exact nature of the U.S. strategy to impede the approval process remains uncertain, as a U.S. Treasury spokesperson refused to comment. In response to inquiries, the CIF stated, “Member deliberations are not made public. Documents are published once approved.”
The South African Presidential unit accountable for climate finance also opted not to comment on this matter. As of the end of 2024, among the 15 contributors to the CIF, the United States is the largest, having contributed USD 3.84 billion, followed closely by the United Kingdom with USD 3.63 billion, while Germany, Japan, and Canada have each committed over USD 1 billion. The CIF’s funding is channeled through six multilateral development banks, including the World Bank and the African Development Bank.
– Bloomberg
The recent stalling of the USD 2.6 billion climate finance package for South Africa by the United States highlights rising tensions between the two nations. Actions taken by the U.S. have successfully delayed crucial funding, amid broader U.S. disinvestment from climate initiatives. Such developments may have serious implications for South Africa’s climate finance and international relations, especially in the context of historical grievances regarding land ownership and the global climate landscape.
Original Source: www.thestar.com.my
