Africa’s climate finance story needs fewer promises and more projects that reach financial close.
The $ 100 billion goal was finally met in 2022, yet flows remain misaligned with Africa’s pipeline and needs.
A capital that is fast, affordable, and accountable can stabilise grids, protect farms, and create jobs. The task now is simple to state and hard to do: build investable pipelines country by country and match them with blended finance and local anchors while policy holds steady.
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The continental numbers
Under the United Nations climate framework, the countries responsible for providing climate finance are the Annexe II group, which broadly covers OECD members as of 1992, including the United Kingdom, the United States, the European Union and its members, Japan, Canada, Norway, Switzerland, and others. Those Annexe II contributors provided about one hundred and sixteen billion dollars in 2022, which met the headline pledge for that year.
Africa’s annual investment still sits far below required levels even after a 2022 surge in flows tracked by Climate Policy Initiative. Needs remain in the range of $200 to $250 billion per year this decade. Akinwumi Adesina, the president of the African Development Bank, put it plainly: Africa will need about $ 277 billion each year to address climate change, yet it receives roughly $30 billion.
East Africa momentum
Kenya is the geothermal backbone.
Kenya has treated the Rift Valley like a patient map of steam and stone. The country now runs one of the world’s cleanest power mixes, with close to ninety per cent from renewables and geothermal, nearly half of the supply in 2023.
That base is a banker’s comfort because heat beneath the ground does not wait for clouds or wind. With a fully green grid in sight by 2030, the revenue story becomes clearer year by year as new wells, grid upgrades, and private wheeling deepen the market.
The result is a system that can power data centres and irrigation pumps with the same steady pulse. Investors see a country that turns natural advantage into bankable routine.
Tanzania hydropower pivot
Tanzania has entered a new phase. The Julius Nyerere hydropower scheme at 2,015 megawatts anchors the centre, while new solar and wind sites sketch the edges of a more diverse map.
Gas remains part of the picture as industry grows and the grid stretches toward mining belts and coastal zones. The opportunity now is choreography. Transmission must keep pace with generation. Ports, rail, and industrial parks need power at the proper voltage and at the right time.
Clear tariffs, timely permits and transparent procurement will decide whether private capital flows in like the rains or hesitates at the gate. With the proper sequencing, Tanzania can turn a large dam into a wider development story where factories hum and farms keep the lights on through dry seasons.
East Africa in one frame
Taken together, the two neighbours show how East Africa can move from potential to predictable cash flows. Kenya brings baseload steam that steadies the system. Tanzania adds scale and new corridors that pull investment across regions. Cross-border interconnectors open trade windows, enabling spare power to find buyers. When policy stays steady and contracts keep their promises, the drumbeat turns regular and capital keeps time.
Sahara scale and North Africa’s export play
North Africa has turned the Sahara’s light and wind into bankable metal and concrete. Morocco’s Noor complex demonstrates how concentrated solar power can be stored and sold after sunset. At the same time, Egypt’s Benban park proves that scale in photovoltaics can be stitched together one array at a time until a desert becomes a grid resource.
The export dream is absolute yet still unsettled. The United Kingdom has stepped back from the Morocco to Britain Xlinks plan, which means the undersea route to Europe will need new buyers or a different pathway; even so, the map is busy. Brussels is advancing hydrogen links with North Africa while a new corridor proposal looks to repurpose pipes and lay fresh lines before the decade ends. Egypt’s Suez Canal zone is courting green fuels for ships and industrial use and Mauritania is shaping large projects for export as well as power at home. The caravan is moving even if one route is closed.
For investors, the lesson is simple. Go where policy is steady, where ports and pipelines are planned, and where offtakers can sign on terms that survive the sandstorms of politics. Morocco and Egypt already show that clear frameworks unlock capital at scale and the emerging hydrogen corridors offer a second engine for the region if costs fall and rules stay predictable. In a land where the sun writes long hours across the dunes, the projects that win are the ones that keep their promises when night comes.
South Africa’s just transition
South Africa’s just transition plan is a wide river with clear banks. It sets investment needs near ninety-eight billion dollars and brings eight and a half billion in partner pledges to prime the flow. That early capital is the spark that turns a promise into a project. It helps move designs off paper and into soil while easing the first steps for private lenders.
Recent procurement rounds are widening the channel. Grid expansion plans open space for independent power as new wheeling rules and more precise offtake terms invite pension funds and insurers to join. The task is to move electricity from where the wind and sun are strongest to where industry needs it most. Stronger transmission is the spine that holds the body upright.
Green hydrogen adds a second engine. Projects at Boegoebaai and along corridors that link with Namibia aim to turn coastal wind and sun into molecules for steel shipping and fertiliser. Ports, rail, and water supply must advance together so the value chain grows like a well tended vineyard season by season.
There is no trade-off between climate action and growth when policy is steady and contracts are bankable. South Africa can fill this river with stable rules, reliable grids, and patient capital, so jobs and competitiveness rise with the tide.
Nigeria’s financing signals
Nigeria opened the door early. Sovereign green bonds raised N10.69 billion in 2017 and N15 billion in 2019. Those issuances proved that local investors would back climate projects when the rules are clear and the pipeline is visible. They also sent a signal beyond Lagos and Abuja that Nigeria could price sustainability in its own currency and do so at scale.
The task ahead is bigger than one market cycle. Estimates for financing Nigeria’s nationally determined contributions range from $177 billion for 2021 to 2030 to $189 billion for 2023 to 2030. That is a long road and it will be walked one bankable project at a time.
Delivery rests on the strength of the electricity market. Tariffs that track costs, metering that cuts losses, and timely permits that keep schedules intact will all determine whether cash flows are strong enough for lenders. Offtakers must be creditworthy so contracts survive political weather. Local currency solutions can steady debt service while transparent procurement shortens the distance between plan and power.
Think of the transition as a busy port where each vessel needs a clear berth. When policy is steady, when revenue frameworks are dependable, and when projects report progress without surprises, capital comes in on the tide. Nigeria can fill it with projects that switch on lights, water farms, and move people and goods, turning green finance from a promise into everyday infrastructure.
What lowers the cost of capital
Investors look for three signals: Policy clarity that survives elections, transparent revenue frameworks with fair indexation, and dependable execution data. Blended structures with partial guarantees can bring in pension funds and insurers at scale. “You cannot separate climate action from development action”, said John Roome of the World Bank.
Africa’s advantage is the size and urgency of its pipeline. Preparation facilities guarantee local currency solutions, and regional power pools can turn that pipeline into projects that lift growth and resilience. The drummer must keep steady time so the dancers find the rhythm. Policy and project delivery must now keep the beat.
