The United States has withdrawn from the flagship $45 billion Just Energy Transition Partnership (JETP), a global climate financing initiative designed to help developing nations transition away from coal. The move marks another significant retreat from international climate commitments under President Donald Trump’s administration.
The US was a core member of the JETP, an initiative launched in 2021 to assist South Africa, Indonesia, and Vietnam in shifting towards renewable energy. The program, backed by a mix of loans, grants, and private finance, aimed to incentivize these countries to reduce carbon emissions in exchange for financial support. However, letters sent to participating nations last week confirmed the US’s withdrawal following an executive order prioritizing domestic interests over international agreements.
A letter from the US embassy to South Africa’s energy minister, seen by the Financial Times, stated that the withdrawal also meant the revocation of all associated financial pledges. Dana Brown, the US chargé d’affaires, confirmed that planned and ongoing grant projects had been canceled.
The exit deals a blow to efforts to build trust between developed and developing nations in the fight against climate change. The JETPs were initially championed by former US climate envoy John Kerry as a means for wealthier nations—historically the largest contributors to greenhouse gas emissions—to support emerging economies facing both environmental crises and energy development challenges.
“The credibility [of the JETPs] is lost,” said a source familiar with Indonesia’s involvement in the program. Indonesia, one of the world’s largest carbon emitters, was set to receive $20 billion, making it the biggest beneficiary of the initiative. However, the program has faced criticism for slow fund disbursement and reliance on loans rather than grants.
Despite the US’s withdrawal, other international coalition members, including the European Union, the UK, Japan, and Germany, have reaffirmed their commitment. Rachel Kyte, the UK’s climate envoy, acknowledged the loss of US commercial finance but maintained that the program remained viable. German development state secretary Jochen Flasbarth echoed this sentiment, stating that the initiative could continue successfully, with Germany stepping in to co-lead Indonesia’s JETP alongside Japan.
In South Africa, the US exit reduced the pledged financial support from $13.8 billion to $12.8 billion. While the loss of $56 million in grant funding and $1 billion in potential commercial investments is significant, South African officials emphasized that it was not fatal to their transition plans. Joanne Yawitch, head of South Africa’s JETP unit, stated that alternative funding sources would be pursued.
The US decision comes amid ongoing global disputes over climate financing. At the G20 finance ministers’ meeting in Cape Town last week, no consensus was reached on climate finance, with the US reportedly holding out against broader commitments. Similar tensions are expected to resurface at COP29 in Baku this November, where developing nations are expected to challenge wealthier countries over their failure to provide effective climate funding.
