KEY POINTS
- South Africa places climate financial support at the forefront of its G20 leadership initiative.
- Shortages in funding have emerged as a result of decreased financial support from the U.S. and Europe.
- Africa demands increased investments to obtain critical minerals required for clean energy development.
South Africa’s G20 presidency is focusing on securing funding to help developing nations transition to cleaner energy sources.
Speaking at a G20 finance ministers and central bankers’ meeting in Cape Town, President Cyril Ramaphosa emphasized the urgent need for financial support to address climate change.
“Significantly more funding is required to limit global temperature rise in line with the Paris Agreement while ensuring that the transition is equitable and just,” Ramaphosa said.
South Africa retains its position as the initial signatory of the Just Energy Transition Partnership (JETP), whereas securing necessary funding remains problematic.
The JETP program began its operations through the U.N. Climate Conference in 2021, to unify funding from national governments, multilateral banks and private investors, who finance clean energy projects that serve local communities.
Concerns over U.S. and European funding cuts
The push for climate financing faces persistent obstacles, as some European nations has decided to cut funding while the United States does the same.
President Donald Trump administration has slashed overseas development aid programs and this has created doubts about future funding for developing nations.
Several European nations such as the United Kingdom are spending their foreign development funds on defense budgets, thus reducing the funding available for climate programs.
According to Reuters, this has put pressure on developing nations, which rely on external funding to make the transition to renewable energy sources.
Meanwhile, major energy companies have chosen to pour their resources into oil and gas operations by decreasing their support for renewable energy development.
The financial limitations, which experts observe at the G20 summit demonstrate how they believe the worldwide transition to clean energy has been obstructed.
Africa seeks greater role in climate financing
The president emphasized that Africa needs to maximize its extensive natural resources which enable renewable energy technology through critical minerals.
Africa holds 30 percent of the world’s reserves of these minerals but currently receives only 3 percent of global energy investments.
“As mineral extraction accelerates to meet the needs of the energy transition, the countries and local communities endowed with these resources must be the primary beneficiaries,” Ramaphosa said.
As part of its strategy South Africa intends to push G20 nations to increase their environmental commitments before the Brazil-hosted U.N. climate discussions (COP30).
The country is pushing for greater concessional and grant funding to help developing economies shift to cleaner energy.
Ramaphosa emphasized the necessity of growing carbon market initiatives while providing financial help to countries facing major climate change risks, because extreme weather events show signs of worsening.
