UK says SA climate finance deal to proceed without US

A $9.3 billion climate deal rich nations struck with South Africa to help it transition to clean forms of energy will forge ahead despite the withdrawal of the US, with other partners remaining committed to it, the UK’s climate envoy said.The US had planned to contribute about $1 billion in commercial loans to the so-called Just Energy Transition Partnership, which was agreed during President Joe Biden’s tenure. Similar deals were struck with Indonesia and Vietnam. France, Germany, the European Union, the UK, the Netherlands and Denmark are part of the South African deal.“The US withdrawal is regrettable,” Rachel Kyte, the UK’s climate envoy, said in an interview in the capital, Pretoria, on Thursday. “The rest of the world moves on.”President Donald Trump, who succeeded Biden in February and has clashed with South Africa over its land-expropriation and foreign policies, was widely expected to pull out of the deal given his skepticism about global warning. A unit in South African President Cyril Ramaphosa’s office said notification of its exit had been received, without giving further details.Kyte said she was unaware whether the US has also withdrawn from the Vietnam and Indonesia programs.South Africa relies on coal to generate about 80% of its electricity and has the most carbon-intensive economy of any of the Group of 20 nations. The JET funding was contingent on it lessening its dependence on climate-warming fossil fuels. The program’s implementation has been led by France and Germany, which have provided €1.5 billion ($1.6 billion) in concessional loans so far.The JETP programs were initially hailed as a breakthrough when they were first conceived in 2021 because they, in theory at least, solved a crucial problem: How to bring together public and private money to make it economically feasible for large developing nations to wean themselves off the use of coal to produce electricity. South Africa’s was the first to be agreed.The initiative has however struggled to deliver many of the intended objectives so far because of slow progress in financing efforts, political leadership changes in Indonesia and Vietnam, and the complexity of shuttering power plants that often have many decades of remaining operational life.South Africa’s recurrent power outages have also stiffened political opposition to their closure. Many of South Africa’s plants are close to their mandated closure dates and some are breaching those.The programs also only represent a fraction of the total financing required. Annual energy transition investment topped $2 trillion globally last year, yet that was only about 37% of the total that’s needed to put the world on track for net zero emissions by 2050, BloombergNEF said in a January 30 report.Talks between international partners have been taking place to sustain momentum in the program as the US pulls back, people familiar with the discussions said last month.The US withdrawal from the pact with South Africa was reported earlier by Reuters.-Bloomberg

UK says SA climate finance deal to proceed without US

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