US Withdraws from Climate Finance Pact Supporting Developing Nations’ Energy Transition
The United States has pulled out of a major international climate initiative aimed at helping developing countries transition from coal to cleaner energy sources, according to South African officials.
South Africa announced that it had been formally notified of the US decision to exit the International Partners Group (IPG), a coalition of wealthy nations that has pledged billions of dollars to support energy transitions in countries including South Africa, Indonesia, Vietnam, and Senegal. Other members of the group—such as the European Union, the United Kingdom, Germany, France, and Japan—remain committed to the initiative.
A spokesperson for South Africa’s foreign ministry said the US withdrawal takes immediate effect and applies to agreements involving South Africa, Indonesia, and Vietnam. The move follows a broader shift in US climate policy, including its earlier decision to withdraw from the Paris Agreement, the global framework designed to limit temperature rise and combat climate change.
The funding pledged under the IPG was intended to help countries gradually phase out coal-fired power plants and invest in renewable energy infrastructure. In South Africa alone, officials estimate that more than $1 billion in future US commitments will now be lost. Several grant-funded projects that were already in planning or implementation stages have reportedly been cancelled.
Indonesia has also been affected, with US-backed funding for its energy transition program withdrawn. However, other IPG members have reaffirmed their support, signaling that the broader initiative will continue despite the US exit.
South Africa emphasized that it remains committed to pursuing a “just and equitable” energy transition. The concept, first formalized at the 2021 UN climate conference, recognizes that many developing economies depend heavily on fossil fuels and require financial and technical support to shift toward cleaner energy without undermining economic stability.
Before the US withdrawal, South Africa had secured approximately $13.8 billion in climate finance pledges. Similar multibillion-dollar agreements were later signed by Indonesia and Vietnam. These countries are among the world’s largest greenhouse gas emitters and rely significantly on coal and other fossil fuels to meet their energy needs.
Officials and analysts warn that the US decision could complicate global efforts to reduce emissions, particularly in emerging economies where financial support is critical to accelerating the transition to renewable energy.