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The US is stalling the distribution of $2,6 billion in climate finance to South Africa, stoking concerns the money might be blocked outright, people familiar with the situation said.
At a meeting earlier this month, US representatives prevented the World Bank-linked Climate Investment Funds from approving a US$500 million disbursement to South Africa, two of the people said, asking not to be identified because a public announcement hasn’t been made on the matter.
Those funds would have unlocked a further US$2,1 billion from multilateral development banks and other sources of financing. Another attempt to approve the payment may be made at CIF meetings in June, four of the people said.
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 US 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 US out of the Paris Agreement, an international climate pact.
He also cancelled a pledge of US$4 billion 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$1 billion in loans.
Disbursements by the CIF can be blocked if any of the 15 nations that have contributed to the $12,5 billion 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 US took to thwart the approval process.
A US Treasury spokesperson declined to comment. – Bloomberg
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