Landscape of Climate Finance in Africa (Climate Policy Initiative)

Summary

• Africa will need USD 2.8 trillion between 2020-2030 to implement its Nationally Determined Contributions under the Paris Agreement.p.5
• The continent needs USD 277 billion annually to implement its NDCs, but annual climate finance flows stand at only USD 29.5 billion.p.6
• Total climate finance flows represent only 11% of needs, with public international actors providing 80%, private finance 14% and African Governments 4%.p.19
• Ten countries out of 54 absorb more than half of all climate investment.p.7
• International public climate finance grew from USD 22.3 billion in 2019 to USD 24.3 billion in 2020.p.7
• Annual investment in renewable energy stands at USD 9.4 billion, against USD 29 billion per year in fossil fuel investment and USD 37 billion in fossil fuel subsidies.p.8
• Agriculture, forestry and other land use drew only 16% of total climate finance in Africa.p.8

Key insights

1. Mitigation accounted for 49% of climate finance flows, followed by adaptation at 39% and dual benefits finance at 12%.p.20
2. Loans (56%) were the preferred instruments for climate finance in Africa, followed by grants (30%).p.21
3. Multilateral DFIs were the largest source of international public climate finance (40%, or USD 11.5 billion).p.22
4. USD 4.2 billion was tracked as private investment in climate-related projects, only 14% of total tracked climate finance flows.p.25
5. Private climate finance is a much higher share in Latin America & Caribbean (49%), East Asia & Pacific (39%) and South Asia (37%).p.25
6. Energy projects attracted the largest share of private investments (74%).p.26
7. Investment in energy systems of USD 9.4 billion accounts for 59% of mitigation finance but falls short of needs estimated at USD 133 billion.p.28
8. The Just Energy Transition Partnership provides USD 8.5 billion of support from donor governments to South Africa.p.30