Climate change remains one of the most pressing challenges of the 21st century, significantly impacting Africa’s development agenda. Despite contributing less than 4% of global greenhouse gas emissions, Africa faces disproportionate climate change effects, threatening economic growth and community livelihoods. To address this, all African countries have ratified the Paris Agreement and submitted their Nationally Determined Contributions (NDCs), outlining their commitments to climate action. However, implementing these NDCs requires approximately USD 2.8 trillion by 2030, a target hindered by financial gaps, limited access to international funding, underdeveloped market systems, and inadequate private sector investment.
Current financial mobilization for climate action in Africa remains significantly below requirements, with public funding insufficient to meet demands. While multilateral development banks (MDBs) and international climate funds offer some financial support, private sector contributions remain critically low compared to other regions such as Latin America and South Asia. Additionally, grant-based financing models have proven inadequate in establishing sustainable, market-driven funding mechanisms. Addressing these challenges requires a strategic approach to mobilizing both public and private sector investments in climate finance.
This study is crucial in identifying the structural barriers to climate finance and providing strategic recommendations for enhancing Africa’s institutional preparedness. By evaluating financial mechanisms and capacity-building initiatives, in Kenya, Rwanda, Malawi, Mauritius, Senegal, Ghana and South Africa, the study aims to bridge knowledge gaps and unlock climate finance opportunities for effective NDC implementation. In addition, this study will significantly inform the new ambitions that countries are setting in their second round of updated NDCs to be submitted in 2025. Lessons from the first revisions submitted in 2020 revealed that most African countries focused on increasing technical ambitions with little details on financial transition to achieve such ambitions.
Objectives
This study aims to analyze the opportunities for mobilizing private and public sector financing for NDCs in Africa and the sorts of capacities needed to tap into these opportunities. The specific objectives of the study are to:
- Analyze NDC finance portfolios and identify barriers to effective financing: This objective focuses on assessing the composition and structure of NDC finance portfolios across selected countries, evaluating the challenges to effective financing, and understanding the roles of key financial institutions. Specifically, the study will:
- Unpack opportunities for mobilizing private and public sector investment for NDCs: This objective focuses on exploring opportunities for public and private sector engagement in NDC financing, particularly through innovative financial mechanisms and the role of policy frameworks.
- To identify capacity needs for and assess FFPs impacts in mobilizing private and public (development) sector financing for NDCs:
Geographical scope
The Geographical scope of this study will be the entire Africa with a deep dive analysis of specific countries drawn from four African regions, i.e. West Africa (Senegal and Ghana), East Africa (Kenya and Rwanda), Southern Africa (South Africa and Malawi), and Small Island Developing Countries (Mauritius) as shown in the map below. The selection of the study sites hinges on the unique climate finance experiences as well as institutional arrangements in the respective countries.
Implementing Entities
This project is funded by the International Development Research Centre (IDRC) and is jointly implemented by:
- African Research and Impact Network (ARIN) – Leading the NDC finance landscape analysis, stakeholder engagements, and high-level policy recommendations.
- Frankfurt School of Finance & Management (FS) – Conducting the capacity needs assessment and coordinating the training and fellowship programs.
Project Duration
The project will be conducted over a period of 12 months, ensuring a comprehensive evaluation of NDC finance mechanisms and capacity-building strategies.
Project Team
- Dr. Joanes Atela – Principal Investigator (PI)
- Dr Christine Gruening – Project Co-lead
- Eurallyah Akinyi,
- Washington Kanyangi
- Dr Humphrey Agevi
- Nancy Mutwii
- Jerry Ariel Mandela
- Dr Mary Nantongo
- Michael Koenig
- Dr Karishma Ansaram
- Dr Antonio Faye