In a move that has further strained relations between Washington and Pretoria, the United States has withdrawn from the Just Energy Transition (JET) partnership with South Africa. This decision follows an executive order signed by President Donald Trump after his return to the White House, marking his second term in office. The order effectively removes the US from the international partners group that initiated the JET partnership at COP26 in 2021.

Under the now-terminated arrangement, the US had pledged a combined total of $56 million in grant funding and a potential $1 billion in commercial investments through its development finance corporation. Notably, no concessional loans were offered as part of this commitment. With America’s withdrawal, the overall international pledges to South Africa’s JET plan have decreased from $13.8 billion to $12.8 billion. This also marks the US exit from JETP agreements with Indonesia, Vietnam and Senegal.

South Africa’s JET Project Management Unit (PMU), operating under the auspices of the Presidency, has confirmed that it is actively seeking alternative grant-making organizations to compensate for the lost US funding. Joanne Yawitch, head of the JET PMU, stated, “South Africa remains steadfast in its commitment to achieving a just and equitable energy transition. All other IPG partners remain firmly committed to supporting South Africa’s JET Investment Plan.”

President Trump’s stance on climate financing is consistent with his prior skepticism regarding the severity of climate change. Upon resuming office, he also led the United States to become the first nation to withdraw from the 2016 Paris Agreement on Climate Change. This accord aimed to significantly cut global greenhouse gas emissions and provide financing for developing economies to shift toward low-carbon energy.

Adding to the complexities, during the recent G20 finance ministers’ meetings in Cape Town, discussions on global climate financing priorities reportedly stalled due to pushback from the US delegation. This has compounded concerns about Washington’s renewed skepticism toward international climate commitments.

The US withdrawal extends beyond South Africa, impacting a broader $9.3 billion climate finance deal designed to assist developing countries in transitioning from coal to renewable energy. The Just Energy Transition Partnership (JETP), launched in 2021, was intended to support nations in shifting to cleaner energy sources through loans and grants, initially focusing on South Africa, Indonesia, Vietnam, and Senegal. The US had pledged over $1 billion to South Africa’s plan and $3 billion for Indonesia and Vietnam, before exiting all JETP agreements.

This withdrawal casts significant doubt on the transition efforts, particularly in coal-reliant South Africa, where 70% of electricity is generated from coal, and thousands of jobs depend on the coal sector. The situation is further complicated by President Trump's recent decree, citing concerns over unjust discrimination against white South Africans, which has led to the suspension of all aid to South Africa.