The U.S. has stalled a $2.6 billion climate finance package for South Africa, blocking a $500 million disbursement that would unlock additional funds. Tensions between the two countries are elevated due to U.S. withdrawal from international climate agreements and prior sanctions. The future of these funds is uncertain pending further deliberations.
The United States has stalled a $2.6 billion climate finance package intended for South Africa, raising concerns about potential outright blockage of the funds. Recent actions by U.S. representatives prevented the approval of a $500 million disbursement from the World Bank-linked Climate Investment Funds (CIF), which would have enabled an additional $2.1 billion from various multilateral development banks.
Further attempts to secure this financing could occur at upcoming CIF meetings in June. This situation could exacerbate tensions between the U.S. and South Africa, particularly given the administration’s prior decisions to halt aid to South Africa and label its ambassador as ‘persona non grata’ over alleged land confiscation, which has not occurred since apartheid ended.
These tensions are part of a broader U.S. withdrawal from international climate commitments. Soon after taking office, President Trump announced the U.S. exit from the Paris Agreement and canceled a $4 billion pledge to the Green Climate Fund, impacting support for nations, including South Africa, in reducing coal dependence, resulting in a loss of $1 billion in loans.
CIF disbursements can be obstructed if any of its 15 contributing nations with a total of $12.5 billion demand further deliberation or object to the disbursement. The specific actions taken by the U.S. to hinder this process remain unclear. A Treasury spokesperson declined to comment, and the CIF has stated member deliberations are not public.
As of the end of 2024, the U.S. is the largest contributor to the CIF, providing $3.84 billion, followed by the U.K. and other nations such as Germany and Japan, each with over $1 billion in contributions. The CIF’s funding is managed through several multilateral development banks, including the World Bank and the African Development Bank.
The stalling of the $2.6 billion climate finance package for South Africa highlights significant U.S.-South Africa tensions, compounded by broader U.S. pullbacks from international climate initiatives. The blockage of essential funds could have serious implications on South Africa’s efforts to combat climate challenges and signals a precarious diplomatic relationship. The critical role of the U.S. as a contributor to the CIF underscores the importance of resolving these standoffs for future climate finance efforts.
Original Source: www.thestar.com.my
