Africa holds 17.8% of global population, contributes a paltry 3.7% to global greenhouse emissions and suffers disproportionately from climate change. According to a report published by the World Meteorological Organization (WMO), climate change in Africa is “harming food security, ecosystems and economies, fueling displacement and migration and worsening the threat of conflict over dwindling resources”. The State of the Climate in Africa 2022 report[1] further indicates that “the rate of temperature increase in Africa has accelerated in recent decades, with weather-and climate-related hazards becoming more severe. And yet financing for climate adaptation is only a drop in the ocean of what is needed.”

In 2022, more than 110 million people across Africa “were directly affected by weather, climate and water-related hazards, causing more than $8.5 billion in economic damages.” Within the review period, at least 5000 fatalities were reported out of which 48% and 43%were associated with drought and flooding respectively. The WMO report points that this figure is likely to be much higher because of under-reporting.

Professor Petteri Taalas, the Secretary General of the WMO recognizes that Africa is the continent which is least able to cope with the negative impacts of climate change. Unfortunately, our analysis of the global flow of climate finance reveals that the continent is equally failing to attract climate funding commensurate with the risk it faces, with almost 50% of $640 billion climate finance flowing into East Asia and the Pacific in 2020 according to a UNDP report[2]. It is noteworthy that East Asia and the Pacific accounts for one-third of global greenhouse emissions according to another report by the World Bank.[3]

Continent	Share of Emissions (%)	Volume of Emissions (Billion Metric Tonnes)
Asia	53.0	19.0
North America	18.0	6.5
Europe	17.0	6.1
Africa	3.7	1.3
South America	3.2	1.1
Oceania	1.3	0.5

Why is Africa failing to attract climate finance in spite of the huge need for climate adaptation and mitigation projects across the continent? Perhaps an appreciation of the concept, structure and forces that drive the global flow of climate funding will help. Climate finance according to the UNDP “refers to financial resources and instruments that are used to support action on climate change. Climate finance can come from different sources: public or private, national or international, bilateral or multilateral. It can employ different instruments such as grants and donations, green bonds, equities, debt swaps, guarantees, and concessional loans. And it can be used for different activities, including mitigation, adaptation, and resilience-building.”

There are a number of multilateral funds accessible to developing countries. Some of these include the Green Climate Fund (GCF), the Global Environment Facility (GEF), and the Adaptation Fund (AF). These funds were established as financial instruments of the United Nations Framework Convention on Climate Change (UNFCCC) to help developing countries combat climate change.

In spite of the availability of multiple funding options, a 2018 report published by Carbon Brief titled ‘How Climate Finance Flows Around the World’[4] indicated that for the 2015 and 2016 review year, Africa had a paltry share of the annual $100 billion climate finance pledged by wealthy countries to poorer nations. It is important to note that available OECD data totals $37 billion climate finance flows from donor countries for the review period. Of the top ten climate finance recipients, India, Bangladesh, Vietnam, Philippines and Thailand were top 5, receiving $2.60 billion, $1.35 billion, $1.34 billion $1.29 billion and $0.96 billion respectively. The only African countries that made the cut were Kenya and Ethiopia in 7th and 9th position receiving $0.76 billion and $0.64 billion respectively in the review year. India and other East Asian countries that contribute significantly to global greenhouse emissions got the lion share of climate finance.

Largest Climate Financiers (2015-2016)	Amount Donated	Largest Climate Finance Recipients (2015-2016)	Amount Received
Country	$(Billion/Year)	Country	$(Billion/Year)
Japan	10.322	India	2.603
Germany	6.493	Bangladesh	1.357
France	3.671	Vietnam	1.344
United Kingdom	2.618	Philippines	1.296
United States	2.370	Thailand	0.963
Netherlands	0.940	Indonesia	0.952
Sweden	0.918	Kenya	0.766
Norway	0.755	Turkey	0.665
Canada	0.682	Ethiopia	0.647
Australia	0.480	Myanmar	0.646

Above: Top 10 Climate Financiers and Recipients averaged over 2015 – 2016 according to OECD data (Source: Carbon Brief December 2018)

From the above table, Japan, Germany, France, the United Kingdom and the United States were the largest climate financiers in the 2015 and 2016 review period jointly contributing about 70% of all climate finances. Conversely, the East Asian countries of India, Bangladesh, Vietnam, Philippines and Thailand were the biggest beneficiaries of climate finances, receiving about 21% of climate finances for the same period.

Above chart only covers climate finance flows from rich countries to poorer countries for the review period according to OECD data. The anonymised category above implies that the transactions do not meet official development assistance criteria. Further, this chart does not account for all of the funding going towards tackling climate change, such as private finance, local funding in-country or flows between developing countries. The UNFCCC biennial report gives an estimate that includes all of these flows and puts overall global climate finance at $680bn and $681bn for 2015 and 2016 respectively increasing by 17% from 2013-2014 due to new private investments in renewable energy projects.

Climate finance reported to the OECD can be tagged as being for mitigation or adaptation purposes. In cases where it is tagged as both mitigation and adaptation, the OECD does not further breakdown the data. Mitigation specific projects received an average 44% of donor funding in 2015 and 2016, while adaptation specific projects received 24% of funding. Projects with both mitigation and adaptation components received 17% of donor finance, with no data available for 14% of projects.

There are a number of things Africa must do to attract more climate funding taking into cognizance the peculiarities of grants, debt finance and (or) private equity. Wisdom can be gleaned from what Bertram Zagema, policy advisor on food and climate change at Oxfam told Carbon Brief: “Grant money can go to such things that communities need to adapt to climate change, for example and private money will only be invested if there’s a business model”. Structured money typically flows in the direction of transparent and predictable regulatory ecosystems and bankable and technically feasible projects.

For the most part, the climate finance ecosystem of many African countries is still very opaque. While 51 out of 53 African countries that submitted Nationally Determined Contributions (NDCs) have provided data on the costs of implementing their NDCs between 2020 and 2030 which they put at $2.8 trillion, the basic assumptions upon which some of the data is based may be faulty, potentially increasing the risk of project failure at the point of execution. A report published by Climate Policy Initiative (CPI) in June 2022 titled ‘The State of Climate Finance in Africa: Climate Finance Needs of African Countries’ supports this position: “African governments have committed USD 264 billion of domestic resources, about 10% of the total cost. USD 2.5 trillion must come from international public sources and the domestic and international private sectors. This external support.is defined as “climate finance need”. While almost all African regions have expressed high needs (see figure below), these could be underestimated due to a lack of data from subnational governments and vulnerable communities.”[5]

Above: Estimated Climate Finance Needs in Africa by Region (Source: CPI June 2022)

The report further indicates that “mitigation accounts for the largest share of reported needs in 2020 – 2030, at 66% of total climate finance needs. Mitigation needs are predominantly split across four sectors: transport (58%), energy (24%), industry (7%), and agriculture, forestry, and other land use (AFOLU) (9%). Adaptation accounted for only 24% of total climate finance needs identified, despite Africa being highly vulnerable to climate change and calls for a better balance of finance between mitigation and adaptation. Adaptation needs are likely to be underestimated due to a lack of data and technical expertise to estimate the true cost of adaptation measures.” The need for capacity building to adequately plan and account for adaptation projects on the continent cannot be overstated.

Although the private sector has immense potential to galvanize resources towards meeting the continents climate finance needs, NDCs rarely discuss its role. Public funding cannot singlehandedly meet Africa’s climate finance needs, given the magnitude of investments needed and the fragility of public funding sources on the continent.  Private equity pursues business models that are bankable. Sub national governments across Africa must therefore view climate resilience as a business opportunity that must be run profitably for all stakeholders. CPI further notes in their report that private finance can be mobilized if public actors “improve policy frameworks and investment environments, deploying concessional financing to target investment barriers.”  I have stated this earlier.

African countries can work with the UNFCCC to develop robust templates to help the continent determine its needs in a more comprehensive way. Improving the quality of data on climate finance needs would support financing roadmaps that effectively target needs and mobilize local and global capital.

Finally, Africa must borrow a leaf from other regional blocs who are currently successfully attracting the bulk of global climate finance. A cursory examination of some of the leading destinations of climate financial flows indicate that they are thinking on their feet, quickly putting together the regulatory frameworks that create pathways unbundling local and foreign funding. They also have a healthy mix of funding options including grants, debt, issuance of regulated green bonds etcetera. For instance the UNDP reports that “Latin America and the Caribbean (LAC) Countries in the LAC region are trying to secure the investments they need for climate action in the coming decades through a mix of finance instruments and approaches that include green finance, results-based payments for REDD+, carbon markets, and finance for blue economy, biodiversity funds, and public finance planning.”[6]  

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[1] The State of the Climate in Africa 2022, World Meteorological Organization

[2] https://climatepromise.undp.org/news-and-stories/what-climate-finance-and-why-do-we-need-more-it

[3] Climate and Development in East Asia and Pacific Region, World Bank November 2023

[4] https://www.carbonbrief.org/interactive-how-climate-finance-flows-around-the-world/

[5] The State of Climate Finance in Africa: Climate Finance Needs of African Countries, Climate Policy Initiative (CPI) June 2022

[6] https://climatepromise.undp.org/news-and-stories/how-countries-latin-america-and-caribbean-are-financing-their-climate-goals