South Africa will get $8.5 billion from the United States, the European Union, and the United Kingdom to accelerate the transition away from coal

The agreement, according to Ramaphosa, is a "watershed moment" for South Africa and the world.

On Tuesday, the US joined the United Kingdom, France, Germany, and the European Union in a multibillion-dollar collaboration to help South Africa fund a faster transition away from coal, which will serve as a model for other countries.

The plan, according to British Prime Minister Boris Johnson, is worth $8.5 billion (R131.24 billion) in total and will help the world fulfill its climate targets by "choking off foreign money for coal," according to the United Nations COP26 gathering in Glasgow

South Africa, which is the world's 12th largest emitter of climate-warming gases and relies heavily on coal-fired power plants for energy, said the funds will help it meet a more aggressive pledge to cut emissions by 2030.

At a joint ceremony at COP26 with European Commission President Ursula von der Leyen, Biden announced the United States' support in the project, which was initially proposed last week.

He stated that the US would contribute funding to help the world achieve net zero emissions "by retiring South Africa's coal facilities ahead of schedule and investing in clean alternatives... for the people of South Africa."

President Cyril Ramaphosa called the pact a "watershed moment" for South Africa and the world, while von der Leyen said the "just energy transition partnership" may serve as a model for international collaboration.

"It is proof that, with cooperation from wealthy countries, we can take ambitious climate action while boosting our energy security, creating jobs, and leveraging new investment opportunities," Ramaphosa said in a statement.

Biden did not detail Washington's financial contribution, but reaffirmed Washington's commitment to implementing the Group of Seven advanced nations' pledges to hasten the transition away from coal in developing countries announced in June.

Germany announced that it would invest 700 million euros (R12.51 billion) in the project.

Coal is the most polluting fossil fuel, and it must be phased out swiftly if the world is to reach the Paris Agreement's goal of limiting global warming to 1.5 degrees Celsius and avoiding the worst effects of climate change.

Many poorer countries argue they can't go any farther without cash from richer countries that bear historical responsibility for climate change, putting climate finance at the forefront of the COP26 negotiations.

By assisting areas and people in coal industries affected by the phaseout, Biden said the financing will enable "equitable, inclusive transitions in South Africa's coal sector."

South Africa, which vowed to cut emissions by 2030 in an updated commitment to global efforts, employed more than 90,000 people in coal mines alone in 2020.

"A groundbreaking agreement between a coal-dependent developing country and a group of donor governments to collaborate and fund an equitable transition away from coal." On Twitter, Jesse Burton, an energy policy analyst who focuses on South Africa's coal sector, stated, "This is a major problem."

The funding will help South Africa speed investment in renewable energy and the development of new industries such as electric vehicles and green hydrogen, as well as ensure that state utility Eskom has access to capital to repurpose coal-fired power plants.

Funds are also needed to ensure that communities that rely on coal mining or coal power plants for employment have greener options as part of the process.

The initiative with South Africa, according to John Morton, a former private equity adviser and senior climate consultant to US Treasury Secretary Janet Yellen, underlined the need of moving away from coal and might serve as a model for collaborations with other carbon-intensive economies.

Mafalda Duarte, the head of the Climate Investment Funds (CIF), which has supported over 300 climate-friendly initiatives in 72 countries, told Reuters that her firm had been working on the new Accelerating Coal Transition (ACT) facility for months.

It will collaborate with multilateral development bank partners to provide a financial toolkit to South Africa and other nations that combines low-cost loans with technical assistance to help attract private sector and other sources of investment.

$1 equals R15.4436; €1 equals R17.8809.