The US is stalling a US$2.6 billion climate finance package to South Africa, raising concerns over potential blockage. A US$500 million disbursement was blocked by US representatives, which could have enabled an additional US$2.1 billion. Diplomatic tensions are increasing, especially following US aid withdrawal and accusations against South Africa. The US is the largest contributor to the CIF, which administers the funds.
The United States is currently delaying the release of a significant US$2.6 billion climate finance package for South Africa, raising concerns regarding a potential complete blockage of the funds. Sources indicate that earlier actions by US representatives led to the Prevention of the World Bank-linked Climate Investment Funds (CIF) from approving a vital US$500 million disbursement intended for South Africa. This initial funding could have catalyzed an additional US$2.1 billion from various multilateral development banks and other financial sources.
In June, further attempts to secure the funding approval are expected at CIF meetings. This development is likely to exacerbate existing tensions between the United States and South Africa. President Donald Trump’s administration has already suspended aid to South Africa, labeled its ambassador as “persona non grata,” and made accusations regarding land expropriation, although South African authorities have not confiscated any private land since apartheid ended in 1994.
These frictions arise amid a broader retreat by the US from global climate initiatives. Following his inauguration, President Trump committed to withdrawing from the Paris Agreement and rescinded a US$4 billion pledge to the Green Climate Fund. Additionally, he abandoned efforts supported by wealthy nations to assist South Africa, among others, in decreasing their reliance on coal, resulting in South Africa losing US$1 billion in loans.
Disbursements from the CIF can be blocked based on objections from any of the fifteen contributing nations, which control the US$12.5 billion in funds administered by CIF. There is currently no clarity on the specific methods employed by the United States to impede the approval process. A representative from the US Treasury did not provide comments, while the CIF stated that deliberations remain confidential and documentation is published post-approval. The South African Presidency’s unit in charge of climate finance also refrained from commenting.
By the end of 2024, the United States had contributed the highest amount to the CIF, totaling US$3.84 billion, closely followed by the United Kingdom at US$3.63 billion. Contributions from Germany, Japan, and Canada exceeded US$1 billion each, supporting the CIF’s projects executed through six multilateral development banks, including the World Bank and the African Development Bank.
In conclusion, the United States’ delay in disbursing the US$2.6 billion climate finance package for South Africa is not only raising concerns over potential funding blockage but is also intensifying existing diplomatic tensions. These developments follow a broader trend of US withdrawal from international climate commitments and could have significant implications for South Africa’s climate financing and development. The forthcoming CIF meetings in June will be crucial in determining the next steps for the funding approval process.
Original Source: www.thestar.com.my
