South Africa Welcomes $300 Billion Annual Climate Finance Deal from COP29

New Pact Promises Enhanced Support for Developing Economies and Green Investment Opportunities.

The South African government has welcomed the landmark climate finance deal committing $300 billion annually by 2035 to developing economies, achieved at the 29th United Nations Framework Convention on Climate Change Conference of the Parties (COP29). The conference concluded on Sunday in Baku, Azerbaijan, with the adoption of the Baku Climate Unity Pact, seen as a major step forward in addressing the global climate crisis.

This agreement also sets a pathway for private sector and multilateral development banks to scale climate financing to $1.3 trillion annually by 2035, focusing on supporting sustainable development in low- and middle-income nations.

Reforming Climate Finance Architecture

Deputy Director-General for Climate Change and Air Quality Management, Maesela Kekana, emphasized that the decision highlights the need to reform global financial systems to better address climate challenges. The deal calls for increased support through grant-based and concessional financing while tackling barriers such as limited fiscal capacity, high debt levels, and costly access to capital in developing economies.

“The decision underscores the urgency of reforming multilateral financial systems to ensure they can address the climate crisis effectively. It also ensures scaled-up grant-based financing, which will be critical for developing nations like South Africa,” Kekana stated.

Wins for South Africa

South Africa’s delegation, led by Minister of Forestry, Fisheries, and the Environment Dr. Dion George, called the conference outcomes a “win for the country.” Minister George highlighted the adoption of decisions under the Paris Agreement, such as Articles 6.2 and 6.4 on carbon markets, which will pave the way for new green technology projects and investment opportunities in South Africa.

“The carbon market decisions will enable us to drive investments in green technologies and create economic opportunities. These outcomes position us for a sustainable, low-carbon economy,” said George.

The Mitigation Work Programme, co-chaired by South Africa and Norway, was another key highlight. The program aims to share best practices and connect investment needs with potential funders, enhancing South Africa's capacity to meet climate goals.

Advancing Adaptation and Loss and Damage Fund

On adaptation, COP29 parties made significant strides toward tracking global progress on adaptation indicators, which are expected to be finalized at COP30 in Brazil in 2025. These indicators will serve as benchmarks for implementing the Global Goal on Adaptation.

The Loss and Damage Fund, co-led by South Africa and France, is set to begin disbursing funds by mid-2025 to support climate-vulnerable communities. “The institutionalization of the fund is a significant milestone, offering hope to those most affected by climate change,” the department noted.

Addressing Challenges in Negotiations

Despite criticisms from some parties regarding the COP29 presidency’s approach to consensus-building, Minister George stressed the importance of the progress made. “While we understand the frustrations of some, these outcomes are more than we had before the negotiations. They provide a platform for future progress, especially as South Africa prepares to lead the G20 Presidency,” he said.

Vision for the Future

COP29 has laid the groundwork for greater collaboration between nations and institutions, with South Africa positioning itself as a key player in global climate negotiations. The conference outcomes align with South Africa’s strategic vision of leveraging its G20 Presidency to further the global climate agenda.

Looking ahead, South Africa is committed to building on the Baku Climate Unity Pact’s achievements and driving robust climate action through partnerships and innovation. Minister George concluded, “COP29 has inspired hope and demonstrated that meaningful progress is possible when nations unite for a common cause.”