After US pulls funding, experts agree SA’s Just Transition faces shortfalls – not collapse

The United States’ withdrawal of its share of the International Partners Group’s (IPG’s) funding for South Africa’s Just Energy Transition Investment Plan (JET-IP) has left a $1-billion hole in South Africa’s plans.

However, experts argue that while this loss poses challenges, it won’t derail South Africa’s broader decarbonisation agenda.

At a webinar on green finance mechanisms for South Africa’s energy transition on Thursday, panelists emphasised that international partners – particularly in Europe – remain committed. 

The US government under President Donald Trump withdrew from the Just Energy Transition Partnership with South Africa, taking with it $56-million in grant funds and $1-billion in potential commercial investments by the US International Development Finance Corporation.

The US pulling out of the partnership lowers international funding pledges to South Africa from $13.8-billion to $12.8-billion, mainly affecting potential private investments. 

The Just Energy Transition Project Management Unit, in its Just Energy Transition Quarterly Progress Report for the period ending 31 December 2024, noted that the Just Energy Transition Investment Plan shows that R1.5-trillion (about $100-billion) in investment is needed from multiple sources, including fiscal budgets, multilateral development banks, bilateral donor countries, the private sector and philanthropies.

Read more: Trump administration pulls more than $1bn of pledged funding for SA’s energy transition

Speaking on Thursday, Mandy Rambharos, CEO of the carbon credit non-profit Verra, said, “From a climate perspective, perversely, you know, the last time Trump won the election, we saw voluntary action in the climate world increasing. So corporates took on more climate action. That’s when the voluntary carbon market really grew.”

“We’re seeing a similar thing now,” she said, careful to temper optimism with her view that the deregulation agenda under the Trump administration, particularly as it relates to the Environmental Protection Agency (EPA), is likely to have a negative impact.  

Under the Trump administration, the EPA is targeting dozens of environmental policies.

EPA Administrator Lee Zeldin wrote in a Wall Street Journal opinion piece on Wednesday, “Yesterday was the most consequential day of deregulation in American history. Alongside President Trump, we announced that the Environmental Protection Agency will take 31 actions to advance his day-one executive orders and power the Great American Comeback.”

“By overhauling massive rules on the endangerment finding, the social cost of carbon and similar issues, we are driving a dagger through the heart of climate-change religion and ushering in America’s Golden Age,” wrote the man in charge of an agency ostensibly meant to protect human health and the environment by enforcing regulations, conducting research and ensuring compliance with environmental laws.

Rambharos, formerly the general manager of the Just Energy Transition office at Eskom, continued on Thursday that “when we negotiated the JETP… I think the country that contributed the least was the US.”

“Our European funders are still on board. So I think we just need to also temper that on what impact the US will have on our funding,” she said.

Filling the gaps