Sustainable Finance

The ACF’s sustainable finance programme aims to shift, unlock, scale and mobilise finance in sectors at the nexus of climate and development. Sufficient finance on fair terms should enable African countries to invest in a 1.5 degree aligned development pathway.

Unlocking Additional Financing and Financing Instruments in Africa

Africa is at a critical juncture to leverage the socio-economic and environmental benefits of a climate resilient pathway. At the core of the transition is the continent’s finance and investment needs. Despite the growing appetite to invest in Africa’s energy transition and climate-vulnerable sectors, the investment deficit remains considerably high and uneven across the continent. In 2020, of the US$632 billion total climate finance, Africa accounted for only 3% (US$19 billion). The African Development Bank estimates that at least US$1.4 trillion is needed between 2020 and 2030 to implement Africa’s nationally determined contributions (NDCs), but there is a current shortfall of between US$99.9–US$127.2 billion. Overlapping crises and escalating costs of capital are also driving the continent towards a debt precipice. The ACF believes that new forms of finance, the expansion and lowering of the cost of public and private capital, and debt relief can fundamentally reform Africa’s ability to achieve long term transformative and climate resilient growth.

Scaling Up Quality Finance

Current investment levels are insufficient to meet the continents financing needs. The quality of current investments has also been challenged by multiple constituencies. The ACF seeks to identify support mechanisms to overcome barriers for deploying finance in three critical areas: energy transitions and requisite infrastructure, agriculture and adaptation financing, land use and food systems and finally resilient urban environments. Channelling finance for adaptation and loss and damage is essential for African countries. Also critical, is ensuring finance packages are availed on fair terms, including removing restrictions on localisation, technology transfer and the continent’s scope to industrialise.

Our Approach to Sustainable Finance

As a cross cutting theme, our Sustainable Finance Programme seeks to catalyse Africa’s investment flows across the ACF’s Programmatic areas. To meet the scale and urgency of the finance shortage, the ACF is working with multiple stakeholders and establishing partnerships that leverage public international finance as an anchor point, mobilise regional development finance institutions, boost domestic resource mobilisation and attract private capital.

Our programme activities:

Articulate an African-led narrative which locates the climate finance debate within the broader context of financing for development and economic transformation.
Enhance the capacity of African stakeholders to systematically engage and influence policy decisions and negotiations at the international level.
Support the expansion of innovative sources of finance to improve the quality and quantity of public and private financing flows to Africa.
Build institutional capacity to support the development of tangible transition plans and strategies that attract climate-friendly investment from multiple sources.
Strengthen philanthropic coordination and collaboration to inform and enable effective philanthropic support and intervention.

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