The United States has withdrawn from the Just Energy Transition Partnerships, the multi-donor arrangements set up between 2021 and 2022 to finance faster retirement of coal power and investment in clean electricity in South Africa, Indonesia and Vietnam. The decision follows executive orders issued in January that rescinded US international climate finance commitments.
South Africa's government said on 6 March that it noted the decision. The country's JETP project management unit in the Presidency said the US share of pledges, about $1.06 billion, would no longer be available, reducing total pledges from $13.8 billion to $12.8 billion. The remaining members of the International Partners Group, which include the United Kingdom, Germany, France, the European Union and others, issued a joint statement saying they remained committed to the partnership.
What the partnerships are
The South African JETP was announced at COP26 in Glasgow in 2021, initially with $8.5 billion of pledges, and later expanded. It aims to support the decarbonisation of the country's power system, which relies on coal for most of its generation, while managing the economic and social effects on coal-mining regions. Indonesia's partnership, announced at the G20 in Bali in 2022, and Vietnam's, announced in December 2022, followed a similar model, combining grants, concessional loans, guarantees and private capital.
Each partnership was built around a national investment plan setting out priorities such as new transmission, renewable generation, early retirement of coal plants, and support for workers. Most of the money pledged has been loans rather than grants, which has been a recurring point of contention in recipient countries.
How much the US contributed
The US pledge in South Africa was about $1 billion, according to South Africa's project management unit, much of it expected to come in the form of commercial investment facilitated by US agencies rather than direct grants. In Indonesia and Vietnam, the United States was a co-lead alongside Japan and other partners, and its share was also largely in the form of finance mobilised through development finance institutions.
Because a substantial share of the pledged totals in all three partnerships depends on private investment, the headline figures have always overstated what would be disbursed directly by governments. The US exit therefore affects not only the pledges themselves but also the signal to private investors, who often look to sovereign participation as a form of risk mitigation.
Reactions from recipient countries
South Africa's statements were measured, emphasising that the partnership continues with other donors. Indonesia's energy minister told Reuters on 24 March that other partners would not follow the US exit. Vietnam's partnership has moved more slowly, with few large projects announced, and the effect of the withdrawal there is harder to measure.
The International Partners Group statement on South Africa said the remaining partners would continue to work with the South African government and that the partnership is focused on supporting the country's own priorities for its power sector.
The power system context
For South Africa, the stakes are tied to the condition of its electricity system. Eskom, the state utility, operates an ageing coal fleet with frequent breakdowns, and the country experienced severe load shedding in 2022 and 2023 before performance improved. The national transmission network needs large investment to connect new renewable projects, particularly in the Northern, Western and Eastern Cape, where wind and solar resources are strongest. Transmission finance was one of the priorities in the JETP investment plan.
In Indonesia, the challenge is different. The country has a large and relatively young coal fleet, including captive coal plants built to power nickel smelters and other industrial parks. The JETP investment plan envisaged early retirement of some plants and limits on new coal, but implementation has been slow. In Vietnam, the main constraints are grid capacity and regulatory frameworks for direct power purchase agreements and offshore wind.
What it means for energy markets
The direct financial effect of the US exit is modest relative to the overall pledge totals and to the investment each country needs. South Africa alone has estimated its transition financing needs at many times the pledged amount, and the JETP was always intended as a catalyst rather than a full funding source. The indirect effects may matter more. Coal retirement deals rely on blended finance that combines concessional money with private capital. Concessional finance absorbs risk that private investors would otherwise price into the cost of capital. When a large concessional provider leaves, the remaining partners either need to fill the gap or accept that some projects will carry higher financing costs.
For coal markets, the JETPs were never expected to cause abrupt changes in demand. Retirement schedules in all three countries stretch over a decade or more, and coal consumption is also driven by industrial growth. For equipment suppliers and developers in renewables and grids, the more relevant question is whether project pipelines tied to JETP funding continue to reach financial close at the expected pace.
Questions for the remaining partners
The partnerships now face practical questions. One is whether the remaining members will reallocate their pledges to cover projects that were linked to US agencies, or whether those projects will be dropped. Another is how the coordination role in Indonesia and Vietnam, where the United States had a leading position, will be redistributed. A third is how private lenders will treat projects that lose part of their concessional layer.
Recipient governments also have choices. Each JETP was designed around country-owned investment plans, and governments can reprioritise within those plans. South Africa, for example, has emphasised transmission, which can attract finance from multilateral development banks and domestic lenders, as well as from private partners in independent transmission projects.
A wider pattern in climate finance
The JETP withdrawal is one of several changes in US international climate finance in early 2025. The executive orders also rescinded the US international climate finance plan, and agencies are reviewing commitments to multilateral climate funds. At the same time, other donors face budget pressures of their own, and several European governments have announced cuts to overseas development assistance as they raise defence spending.
For developing countries preparing new NDCs for COP30, many of which include targets conditional on international finance, the reduction in available concessional funding is likely to shape how ambitious those conditional targets are and how quickly any coal retirements proceed.