Yellen welcomes South Africa's energy transition, steers clear of Russia mention

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By Andrea Shalal and Kopano Gumbi

PRETORIA (Reuters) -U.S. Treasury Secretary Janet Yellen on Thursday lauded South Africa's "bold" participation in an energy transition partnership backed by the United States and other Western nations but steered clear of mentioning U.S. concerns about Pretoria's planned military drills with China and Russia.

Yellen spoke to reporters alongside South African Finance Minister Enoch Godongwana in Pretoria on the third leg of her nearly two-week tour of Africa, and just days after Russian Foreign Minister Sergei Lavrov visited South Africa.

She welcomed Godongwana's "cooperation and insightful views" in their previous discussions, and said she would raise several issues, including Zambia's stalled sovereign debt restructuring effort, given South Africa's key role on the country's creditor committee.

"The United States strongly values our relationship with South Africa," Yellen said in remarks that included no mention of Russia or China, or White House concerns about Pretoria's plans to hold joint military drills with both countries.

Washington was not asking countries to choose sides, focusing instead on America's plans in South Africa and beyond, a senior Treasury official said.

U.S. officials did brief the South Africans on U.S. sanctions imposed on Russia over its war in Ukraine to avoid possible misunderstandings, the official told reporters.

Godongwana said the two would discuss countering the financing of terrorism, climate financing, resolving sovereign debt crises in Africa and global topics that will form part of a meeting of the G20 group of major economies next month.

He said Yellen's visit was a "momentous" occasion, noting that the previous visit by a U.S. Treasury secretary was in 2014, and praised Yellen's announcement on Wednesday that the United States and South Africa were setting up a joint task force on combating the financing of wildlife trafficking.

South Africa has remained one of Moscow's most important allies on a continent divided over Russia's invasion of Ukraine on Feb. 24.

Yellen's trip has kicked off a yearlong charm offensive of U.S. top leader visits to Africa aimed at deepening U.S. economic ties with the continent and countering China's long dominance of trade and lending with many African nations.

Throughout her visit, Yellen has emphasized the right of countries to choose their trading partners while pitching the greater transparency and lasting nature of engagement with the United States.

The Treasury secretary, who met with South Africa Energy Minister Gwede Mantashe later on Thursday, singled out South Africa's "Just Energy Transition Partnership," backed in late 2021 by the United States, Britain, France, Germany and the European Union, as a key to future growth.

They pledged a combined $8.5 billion to accelerate South Africa's transition away from fossil fuels to renewable energy, but South Africa's plan could cost five times that much.

"This partnership represents South Africa's bold first step toward expanding electricity access and reliability and creating a low-carbon and climate-resilient economy," Yellen said, adding that it would "alleviate the deep fiscal strain the energy sector is putting on South Africa's economy."

Yellen had a "frank" exchange of views with both Ramaphosa and Mantashe about the partnership, the U.S. ambassador to South Africa, Reuben Brigety, told reporters.

The need to transition to a low-carbon-emission economy was not in dispute, but South African officials questioned how they could get there and on what timetable, he said.

Yellen assured them that the partners would continue to support South Africa's transition and work with them on their plans, Brigety said.

(Reporting by Andrea Shalal and Kopano Gumbi in Pretoria; Editing by Matthew Lewis, Alexander Winning, Toby Chopra and Mark Porter)