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 the last decade, for example, Africa only attracted 2% of global renewable energy investments―with Southern and North Africa accounting for 38% and 32% of flows respectively. Approximately US$375 billion in investments is required up to 2030 to tap into Africa’s renewable energy potential alone. The extent of the financing challenge requires that African countries unlock additional financing and financing instruments, beyond the global North’s “US$100 billion” climate finance pledge.
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.
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.