The US has quit the Just Energy Transition Partnership (JETP) initiative it helped launch to support several developing countries in their shift away from coal to clean energy, ending its contribution to the $45 billion in climate finance pledged to back their efforts.

The withdrawal is the latest in a rapid-fire series of US funding cuts for work in developing countries after President Donald Trump, a climate change sceptic, came to power in late January. His right-wing administration has since given notice that the US will leave the Paris Agreement, rescinded pledges of $4 billion to the Green Climate Fund, and given up the US seat on the loss and damage fund board.

The JETP initiative was launched in 2021 to great fanfare, with South Africa signing the first deal with the International Partners Group (IPG) – including the European Union, Germany, the UK, France and the US – at the COP26 climate summit in Glasgow.

The group pledged to mobilise an initial $8.5 billion between 2023 and 2027, a total that increased by several billion dollars as the Netherlands and Denmark joined. In 2022, Indonesia negotiated a JETP deal with a $20-billion commitment from the IPG, including $10 billion from commercial investors, followed by Vietnam with $15 billion.

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Last week, the US wrote letters to those three recipient countries – Indonesia, Vietnam and South Africa – informing them of its decision to withdraw funding as part of the IPG, a coalition of donor countries and financial institutions providing funding and other technical support to the deal.

A fourth JETP was agreed with Senegal, but the US was not part of that from the beginning.

Germany described the US decision to exit as “regrettable”. However, German Development State Secretary Jochen Flasbarth said his government is convinced the work of the JETPs “can be continued successfully”.

As Climate Home News reported last year, Germany and the UK disclosed at the COP29 climate summit last year that they were hesitant to pursue additional JETPs and set out the lessons learned so far.

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But in his statement on the US withdrawal, Flasbarth said the partnerships “have grown”, adding that “the decision to share responsibility between so many partners is now turning out to be very helpful”.

He added that while public funding plays an important role in the JETPs, the mobilisation of private investment “is far more important”. The partnership has been working on the “conducive environment and reliable regulations” to stimulate such investment flows, he noted.

In South Africa, for example, energy legislation reforms laid the foundation for “a market-led boom in renewable energy”, Flasbarth said, meaning that renewables are now mostly cheaper than fossil fuels.

UK climate envoy Rachel Kyte said in South Africa this week that while the US exit is “regrettable”, she believes there is a “clear path forward”, in comments reported by the Financial Times.

Kyte went on to announce additional funding support for South Africa’s JETP to help prepare the country’s wholesale electricity market and explore interim transmission solutions. 

‘Dangerous precedent’

While the IPG plans to move on without the US, environmental group 350.org said the US remains morally bound to deliver on its financial obligations to developing countries, adding that the exit is “deeply concerning” for the future of the planet and communities dealing with escala