Today we woke up to the news that the US has withdrawn more than $1.56 billion in pledges to South Africa with immediate effect. This includes $56 million in grant funding and $1 billion in potential commercial investments by the US International Development Finance Corporation.

These further reductions in US aid and grant funding to South Africa are the result of Executive Order 14162 – Putting America First in International Environmental Agreements signed by President Trump on 28 February 2025. Given that this Executive Order instructed United States Ambassador to the United Nations to immediately submit notification of the US’ withdrawal from the Paris Agreement and any other pacts made under the UN Framework Convention on Climate Change it is not too surprising, although disappointing. During the following week, the International Partners Group (IPG) is reported to have notified the South African government of the US’ withdrawal from the IPG and Minister Kgosientsho Ramokgopa warned the nation that this funding was at risk.

Yesterday our government noted the decision and confirmed that all projects in the planning or implementation phases in South Africa and funded through US grants have been cancelled.

Although this is undoubtedly a further blow to the South African economy, all may not be lost. The IPG was formed with the launch of the Just Energy Transition Partnership at the COP26 climate summit in 2021. Despite the withdrawal of the US, the IPG remains a partnership that includes the European Union and countries such as the UK, Canada, Japan, Norway, Denmark, Germany, France and Italy that have pledged money for energy transition projects in South Africa, Indonesia, Vietnam and Senegal. To date no other partners have withdrawn and their pledges remain at about $12.8 billion. Hopefully our government will use it well.