By Abdullahi Lukman
South African President Cyril Ramaphosa has declared that his nation’s G20 presidency will focus on securing financial support for developing countries to transition to low-carbon economies.
This declaration comes against the backdrop of significant reductions in U.S. overseas aid and a broader global shift in funding priorities.
This announcement came Wednesday at the opening of the G20 finance ministers and central bankers’ meeting in Cape Town.
The central aim of South Africa’s initiative is to address the critical funding gap needed to meet the Paris Agreement’s global temperature rise goals, particularly for nations heavily reliant on fossil fuels.
Ramaphosa emphasized the necessity for “significantly more funding” to ensure an “equitable and just” energy transition.
This focus is highlighted by South Africa’s own experience with its Just Energy Transition Partnership (JETP), where despite securing an initial agreement to move away from coal, the country has faced challenges in accessing the required financial resources.
The need for increased funding is made more pressing by the United States’ decision to curtail overseas aid programs under the Trump administration, along with similar funding reductions in Europe where some nations are redirecting funds towards defense.
Major energy companies are increasingly retracting investments in renewable energy, refocusing on traditional oil and gas.
Despite a general increase in global climate financing since 2018, the distribution of funds to poorer nations, especially in Africa, remains disproportionately low, with the continent receiving less than 5% of global energy investments, despite having a significant portion of the worlds critical mineral reserves.
South Africa plans to use its G20 presidency to advocate for ambitious climate action targets at the upcoming UN climate talks in Brazil, pushing for greater concessional and grant funding for developing economies.
Ramaphosa also called for increased funding to help vulnerable countries cope with extreme weather events, and for the development of effective carbon markets.
Further, South Africa will push for an agreement on critical minerals, to ensure African nations benefit from their natural resources during the energy transition. Africa holds 30% of the world’s critical mineral reserves, and seeks to use this to fund climate action.
