March 6, 2025 – The United States has withdrawn from a major climate agreement where wealthy nations pledged billions of dollars to help developing countries transition from coal to renewable energy, according to South Africa’s government.
The US exit impacts the International Partners Group (IPG), a coalition of rich countries including the European Union, Britain, Germany, France, Italy, Canada, Japan, Norway, and Denmark. The IPG had committed financial support to South Africa, Indonesia, Vietnam, and Senegal to phase out coal in favor of greener energy sources.
US Exit Halts Over $1 Billion in Funding for South Africa
South Africa’s Foreign Ministry spokesperson, Chrispin Phiri, confirmed that the US has withdrawn effective immediately from energy transition agreements in South Africa, Indonesia, and Vietnam. The US had not pledged funds to Senegal, so that program remains unaffected.
The South African government said the US withdrawal means it will lose over $1 billion in future investment pledges, impacting its plans to shut down coal-fired power stations and replace them with renewable energy.
“Grant projects in South Africa that were previously funded and in planning or implementation phases have been canceled,” Phiri stated.
Indonesia and Vietnam Also Affected
Indonesia, which signed a $20 billion Just Energy Transition Partnership (JETP) in 2022, will also lose US financial support. Fabby Tumiwa, head of the climate-focused Institute for Essential Services Reform, confirmed that US funding through USAID and the Department of Energy has been canceled.
Other Nations to Continue Support
Despite the US withdrawal, the other IPG countries have reaffirmed their commitment.
Joanne Yawitch, head of South Africa’s Just Energy Transition Project Management Unit, stated:
“South Africa remains steadfast in its commitment to achieving a just and equitable energy transition. All other IPG partners remain firmly committed.”
South Africa was the first country to sign a Just Energy Transition Agreement at the 2021 UN Climate Conference, securing $13.8 billion in pledges before the US exit.
US Climate Policy Shift
The US move marks another step away from global climate agreements. In January, President Donald Trump signed an executive order withdrawing the US from the Paris Climate Agreement, a landmark global deal aimed at limiting global warming to 1.5°C above pre-industrial levels.
The decision is expected to slow down coal phase-out efforts in developing countries that depend on fossil fuels to sustain their economies.
South Africa, Africa’s most industrialized economy, still relies on coal for over 80% of its electricity. Indonesia also remains heavily dependent on coal, with 60% of its energy coming from fossil fuels. Both countries are among the top 20 global emitters of greenhouse gases.
While other IPG nations remain committed, the loss of US funding could hinder progress in transitioning to greener energy in these countries.