Solar panels are seen near the cooling towers of a retired coal-fired Komati Power Station, operated by Eskom, near Komati village, in the Mpumalanga province in South Africa, May 9, 2024. REUTERS/Siphiwe Sibeko/File Photo
WASHINGTON: The United States is stalling the distribution of US$2.6bil in climate finance to South Africa, stoking concerns the money might be blocked outright, according to sources.
Earlier this month actions by US representatives prevented the World Bank-linked Climate Investment Funds (CIF) from approving a US$500mil disbursement to South Africa, said the sources.
Those funds would have unlocked a further US$2.1bil from multilateral development banks and other sources of financing.
Another attempt to approve the payment may be made at CIF meetings in June.
The development has the potential to deepen a fallout between the nations.
The administration of President Donald Trump has already halted aid to South Africa, declared its ambassador to the United States a “persona non grata”, and accused the African nation of expropriating land.
South African authorities haven’t confiscated any private land since the end of apartheid in 1994.
Those tensions come on top of a wider US pullback from global climate initiatives.
Shortly after his inauguration, Trump promised to yank the United States out of the Paris Agreement, an international climate pact.
He also cancelled a pledge of US$4bil to another international climate institute, the Green Climate Fund, and withdrew from plans backed by rich nations to help Indonesia, Vietnam and South Africa reduce their reliance on coal.
That last step has already cost South Africa US$1bil in loans.
Disbursements by the CIF can be blocked if any of the 15 nations that have contributed to the US$12.5bil in funds it oversees object or ask for more time to seek additional details on what the funds will be used for, and under what conditions.
It’s unclear which approach the United States took to hinder the approval process.
A US Treasury spokesperson declined to comment.
“Member deliberations are not made public. Documents are published once approved,” the CIF said in response to questions sent by Bloomberg.
The unit in the South African Presidency responsible for climate finance declined to comment. As of the end of 2024, of the 15 contributors to the CIF the United States was the biggest, having provided US$3.84bil. It’s closely followed by the United Kingdom at US$3.63bil.
Germany, Japan and Canada have each contributed more than US$1bil.
The CIF’s funding is implemented through six multilateral development banks including the World Bank and the African Development Bank. –– Bloomberg
