The US’ decision to drop its funding commitments to emerging markets via Just Energy Transition Partnerships (JETP) is unlikely to have a long-term impact, according to research by BMI, a Fitch Solutions company. The US has played a pivotal part as a significant financier and co-leader of JETPs to date, including the partnership for Indonesia (where it was contributing 18% of total public spending) and South Africa (where it was contributing 11% of the US$13.8 billion funding pledge). The US decision to drop these commitments has been made following President Donald Trump’s decision to slash foreign aid. As such, these markets will need to find alternative sources to support their energy transitions. “Although we expect the loss of US funding in the JETP partnerships to be disruptive and potentially add further delays to these programmes, we see other international partners stepping up to fill the void and ensure the continuity of the JETPs,” the report said. Germany has confirmed it will take on the co-leadership role with Japan for Indonesia’s partnership, while France and the rest of the EU have also launched the Indonesia Energy Transition Facility, committing an additional €14.7 million (US$15.9 million) to accelerate the JETP process. “South Africa’s energy transition under the JETP is expected to press forward, with a focus on maintaining momentum through alternative funding sources and strategic partnerships,” the report added. Other international partners, including the UK, will continue to provide financial backing.
