A World Bank-linked climate fund has backed South African plans to cut its reliance on coal, unlocking up to $2.6-billion in financing and giving the nation’s energy transition an unexpected boost.

The approval of the updated plan by the Climate Investment Funds, which was stalled after South Africa last year asked to delay the closure of three coal-fired power plants to ease an energy crisis, will see the CIF disburse $500-million to the country.

That clears the path for as much as $2.1-billion from multilateral lenders including the World Bank and the African Development Bank, plus other sources.

“CIF’s Clean Technology Fund Trust Fund Committee approved an update to South Africa’s Accelerating Coal Transition investment plan” on June 11, the fund said in a response to queries.

Under the plan, it said South Africa can now put forward detailed costing for projects it had outlined and then get approval for their funding from the trust. It referred additional questions on financing to the South African government, which confirmed that the plans are still in place.

The financing will play an important role in South Africa’s energy transition. The country relies on coal for about 80% of its electricity generation and has the most carbon-intensive economy of any country in the Group of 20.

The decision also rescues support that looked to be in peril after South Africa, back around September, asked to alter the plan, which had originally been endorsed in 2022.

That request delayed approval until after the Jan. 20 inauguration of US President Donald Trump and subsequent pullback by America from a range of international climate initiatives. The actions of US representatives then thwarted an opportunity to support the South African plan in March, people familiar with the situation said at the time.

Of the 15 contributors to the $12.5-billion CIF the US was the biggest as of end-2024, having provided $3.8-billion. It’s closely followed by the UK at $3.6-billion. Germany, Japan and Canada have each contributed more than $1-billion.

Disbursements by the CIF can be blocked if any of the nations that have contributed to the funds object or ask for more time to seek additional details on what the funds will be used for, and under what conditions. Approval can be granted if a country abstains rather than votes against the plan. It’s unclear how voting went on June 11.

The US State Department referred queries to the Treasury. The Treasury didn’t respond to an earlier request for comment.

Earlier this year the US withdrew from plans backed by rich nations to help Indonesia, Vietnam and South Africa reduce their reliance on coal. That step cost South Africa $1-billion in loans. Shortly after his inauguration, Trump promised to yank the US out of the Paris Agreement, an international climate pact. He also canceled a pledge of $4-billion to another international climate institute, the Green Climate Fund.

Separately, relations between the US and South Africa have been strained.

Trump also halted aid to the country and his top officials have boycotted G-20 meetings hosted by South Africa this year.