1、Landscape of Climate Finance in AfricaSeptember 2022iiLandscape of Climate Finance in AfricaACKNOWLEDGMENTS The authors would like to acknowledge and thank FSD Africa,the Childrens Investment Fund Foundation,and UK Aid for commissioning and guiding the development of this paper.They would also like

2、to acknowledge the CPI team who supported this effort:Barbara Buchner,Baysa Naran,Caroline Dreyer,Dharshan Wignarajah,Jonathan First,Vikram Widge,Valerio Micale,Rob Kahn,Elina Majumdar,and Michael Gold for advice,editing,and internal review;Josh Wheeling,Elana Fortin,and Diana De Leon for layout and

3、 graphic design;and Jake Connolly for data support.In addition,they acknowledge the many people who provided inputs and guidance including staff from FSD Africa and the Childrens Investment Fund Foundation-Dayna Connolly,Irene Karani,Jonathan Israel,Mark Napier,and Sandy Okoth.The authors appreciate

4、 the review from Padraig Oliver(the UNFCCC Secretariat)and Denise Puca(GSCC Network).The authors also appreciate data support by Oliver Reynolds(GOGLA).Responsibility for the information and views set out in this publication lies with the authors.FSD Africa,the Childrens Investment Fund Foundation,a

5、nd UK Aid cannot be held responsible for any use which may be made of the information contained or expressed therein.AUTHORSChavi Meattle,Rajashree Padmanabhi,Pedro de Arago Fernandes,Anna Balm,Elvis Wakaba,Daniela Chiriac,and Bella Tonkonogy.ABOUT CLIMATE POLICY INITIATIVECPI is an analysis and adv

6、isory organization with deep expertise in finance and policy.Our mission is to help governments,businesses,and financial institutions drive economic growth while addressing climate change.CPI has six offices around the world in Brazil,India,Indonesia,the United Kingdom,and the United States.Copyrigh

7、t 2022 Climate Policy Initiative climatepolicyinitiative.org.All rights reserved.CPI welcomes the use of its material for noncommercial purposes,such as policy discussions or educational activities,under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International(CC BY-NC-SA 4.0)Licens

8、e.For commercial use,please contact adminsfcpiglobal.org.Landscape of Climate Finance in AfricaiiiFOREWORDA low carbon,climate resilient pathway offers the African continent the opportunity to address climate change while ensuring sustainable development,improvement in livelihoods,energy security,an

9、d job creation.Bringing it to fruition will take significant financial resources from public and private actors,at scale and with speed.To tap these resources effectively and efficiently,countries need to ensure that enabling institutional and financial mechanisms are in place.The fiscal and economi

10、c environment,despite their constraints,should provide a platform for enabling the deployment of capital towards the achievement of climate mitigation and adaptation objectives.Each country on the continent needs to foster sectoral policies,taxonomies,and governance mechanisms that support the attra

11、ction of domestic and global capital.Clearand consistent transition policies and information on investment will help highlight existing gaps,spotlight opportunities,and provide a fertile environment for effective mobilisation and scaling of climate and just transition finance.This is the context in

12、which the Landscape of Climate Finance in Africa report is being launched.This report provides a first-of its kind assessment of climate finance flowing into and within African countries.This report is a crucial one and comes at a time when it is urgently needed,and to inform the discussions and neg

13、otiations at COP27 in Egypt.It provides a baseline to understand climate finance flows in Africa which need to be tracked,in order to measure progress of each country and,in combination,the continent,towards meeting their Nationally Determined Contributions(NDCs)under the Paris Agreement.Importantly

14、,a report such as this allows us to measure whether the commitments of developed countries to provide finance to developing countries,is indeed being delivered.According to this CPI report,African countries collectively received only 12-15%of their required climate response investments in 2019 and 2

15、020.Climate finance must be mobilised at greater speed and scaled significantly if the continent as a whole is to achieve its mitigation outcomes and adapt to climate change.Incremental progress,the existing status quo and business-as-usual are no longer appropriate as developing countries pursue th

16、eir socio-economic development paths to lower carbon economies and climate resilient societies.As climate change agents on the continent,we welcome this report on the climate finance landscape and we are hopeful that it will make a contribution to our endeavours to meaningfully participate in the gl

17、obal efforts towards a net zero future._ Valli Moosa Deputy Chairperson,South African Presidential Climate Commission ivLandscape of Climate Finance in AfricaDESCRIPTORSSECTORClimate finance,adaptation,energy,agriculture,forestry and other land use REGIONAfricaKEYWORDSClimate finance;adaptation;miti

18、gation;private finance;public finance;Africa RELATED CPI WORKSClimate Finance Needs of African CountriesClimate Finance Innovation for AfricaFinancial Innovation for Climate Adaptation in AfricaGlobal Landscape of Climate Finance 2021The Landscape of Climate Finance in KenyaSouth African Climate Fin

19、ance Landscape 2020CONTACTChavi Meattle chavi.meattlecpiglobal.org MEDIA CONTACTSCaroline Dreyer(CPI)caroline.dreyercpiglobal.orgNelson Karanja(FSD Africa)nelsonfsdafrica.org RECOMMENDED CITATIONClimate Policy Initiative.2022.Landscape of Climate Finance in Africa.Landscape of Climate Finance in Afr

20、icavEXECUTIVE SUMMARYAfrica offers a wealth of climate-related investment opportunities.New value chainsfrom sustainable agribusiness to renewable energyare taking root as the continents industrial mix extends beyond extractives and other traditional sectors(EY,2020).A young and growing population i

21、s increasingly keen to tackle big challenges.At the same time,the continent faces issues ranging from lack of energy access to water scarcity,to acute food insecurity,and more.The COVID-19 pandemic,Russias invasion of Ukraine,rising debt,and climate change-induced severe weather magnify these risks.

22、Africa will need USD 2.8 trillion between 2020-2030 to implement its Nationally Determined Contributions(NDCs)under the Paris Agreement(CPI,2022).1 This is the cost of the continents contribution to limiting warming to 1.5C and addressing the biggest impacts of climate change.To help direct investme

23、nt to where it can have the most impact,the Landscape of Climate Finance in Africa provides a comprehensive overview of climate investment flows on the continent.It has the following objectives:1.Establish a first-of-its-kind baseline of public and private climate finance flows in Africa2.Improve un

24、derstanding of volume,sources,thematic uses,and sectoral allocation of these flows3.Identify entry points,financing gaps,and opportunities for new investments4.Identify and propose solutions to methodological challenges and data gaps5.Help financial actors and climate negotiators scale up climate fi

25、nance1 Based on data from 51 African countries(out of 54 total)viLandscape of Climate Finance in AfricaES Figure 1:Climate finance flows in Africa,2019/2020(USD billion)KEY FINDINGS1.Both public and private actors must do more to fill Africas climate finance needs.CPI estimates that the continent ne

26、eds USD 277 billion annually to implement its NDCs and meet 2030 climate goals.2 But annual climate finance flows in Africa stand at only USD 29.5 billion.This gap is likely even wider as countries often underestimate their financial needs,especially in relation to adaptation,due to data and methodo

27、logical problems in costing their NDCs(UNFCCC,2021).Time is of the essence;delaying action will cost the continent more in the future.2.Investment gaps vary between countries.All sub-regions receive significantly less finance than they need.However,the Southern African region bears the largest finan

28、cing gap in absolute terms.This is mainly attributed to the high climate finance needs identified by South Africa aloneUSD 107 billion annually3,combined with one of the lowest regional levels of climate investment.2 This is the total cost of implementing NDCs in Africa,as reported in their NDC subm

29、issions.3 South Africas needs assessment is one of the most comprehensive on the continent and is based on a detailed goal-based methodology,which provides different estimates based on probabilities of low,moderate,and high climate scenarios.For more details,refer to The State of Climate Finance in

30、Africa:Climate Finance Needs of African Countries(CPI,2022)Grants$8.7Low-costproject debt$8.3Project-levelmarket rate debt$7.6Project-level equity$1.8Unknown$1.2Governments$6.4National DFIs$0.3Bilateral DFIs$5.3Multilateral DFIs$11.6Multilateral Climate Funds$1.0Other Public$0.7Commercial FIs$1.1Ins

31、titutional investors$0.4Households/Individuals$0.4Corporations$1.6Unknown$0.7International$25.2Domestic$3.7Unknown$0.6Balance sheet financing$1.8equity$1.2,debt$0.6 SOURCES AND INTERMEDIARIESWhich type of organizations are sources or intermediaries of capital for climate finance?INSTRUMENTSWhat mix

32、of financial instruments are used?DOMESTIC/INTERNATIONALFrom where is the finance flowing?PRIVATEPUBLICLandscape of Climate Finance in AfricaviiCountries in Central and East Africa face the largest climate investment gaps as a percentage of GDP:26%and 23%on average,respectively.North African countri

33、es face the lowest climate investment gaps(3%of GDP),but absolute climate finance needs in those countries still exceed flows by three to six times.3.Climate finance is concentrated in too few countries.Ten countries(out of 54 African countries)absorb more than half of all investment4.Risksboth real

34、 and perceivedreduce investor appetite to expand investment(Africa NDC Hub,2021).These risks include:Currency instability Regulatory and governance problems Lack of bankable project pipelines Counterparty risks Lack of technical capacity,transparency,and accountability mechanisms Information asymmet

35、ries4.However,some large actors under-report their financing flows.These include China,a major backer of infrastructure projects across the continent,and African Governments themselves.A lack of standardized,accessible,and climate-tagged expenditure data at national and sub-national levels hampers e

36、fforts to estimate the full share of government financing.Evidence from countries that do track domestic finance,however,suggests low levels of climate-related expenditures.5.International public finance climbed marginally from 2019 to 2020.The COVID-19 pandemic did not disrupt growth in this tranch

37、e of funding,which grew from USD 22.3 billion in 2019 to USD 24.3 billion in 2020.Multilateral Development Financial Institutions(DFIs)and climate funds were the largest source of public climate finance(49%),followed by bilateral development partners including bilateral DFIs(22%),international gover

38、nments(16%)and climate funds(4%).6.The private sector needs to step up.It contributed only 14%(USD 4.2 billion)of total climate finance in Africa,much lower than in other regions like South Asia(37%),East Asia and Pacific(39%),and Latin America&Caribbean(49%)(CPI,2021a).Sources of private sector inv

39、estment were split between domestic(49%),international(39%),and unidentified sources(12%).The private sectorlargely corporates and commercial financial institutionsinvested mostly in mitigation projects(81%).Supportive public interventions,growing maturity of renewable energy technologies,and better

40、 funding models for renewable energy projects versus adaptation-based projects largely drove this trend.7.Africa strikes a better balance between adaptation and mitigation than other regions.Mitigation accounted for 49%(USD 14.6 billion)of climate finance flows in Africa,followed by 39%(USD 11.4 bil

41、lion)towards adaptation,and 12%(USD 3.5 billion)to dual benefits.This is in contrast to other regions globally where adaptation represents only 7%16%of total climate finance.This is a positive trend,given Africas disproportionately high vulnerability to climate change.Yet funding for both adaptation

42、 and mitigation must still increase by at least six and 13 times,respectively.4 Egypt,Morocco,Nigeria,Kenya,Ethiopia,South Africa,Mozambique,Cote dIvoire,Tunisia and Ghana(ranked from highest to lowest)viiiLandscape of Climate Finance in Africa8.Loans dominate grants by nearly two to one as a share

43、of total financing.Although this varied by country,sector,and type of project,the predominant funding vehicle for each category is mentioned below:Mitigation:loans5(57%)Adaptation:grants(46%),and low-cost loans(30%)Adaptation in low-income countries:grants(69%)Adaptation in lower-middle-income count

44、ries:loans(73%)Commercially attractive sectors(e.g.,energy):loans(56%)Agriculture,forestry,and other land use(AFOLU):grants(54%)9.There is huge potential to translate Africas sustainable energy needs into investment opportunities and reduce investments in fossil fuels.Africa will need around USD 133

45、 billion annually in clean energy investment to meet its energy and climate goals between 20262030(IEA,2022).However,annual investment in renewable energyarguably the most attractive sector for commercial investorsstands at a mere USD 9.4 billion.This is a fraction of the continents investment in fo

46、ssil fuels(USD 29 billion/year between 20162021),and government subsidies for fossil fuels(USD 37 billion/year in 2019/2020)(Banktrack 2022).10.Stakeholders need to boost funding for AFOLU6 in particular.Despite the sectors economic and social importance,and implications for food security,gender,bio

47、diversity,and water security,it drew only 16%of the total climate finance in Africa.5 Project-level market rate debt(30%)and low-cost project debt(27%)6 Agriculture,Forestry and Other Land UseLandscape of Climate Finance in AfricaixOPPORTUNITIES AND RECOMMENDATIONSTo address the current climate fina

48、ncing gap and accelerate investment into Africas diverse opportunities,we propose the following immediate priorities:Adapt strategies to address current and future country realities.Currently,debt accounts for more than half of climate finance.This exacerbates already high debt vulnerabilities amid

49、other ongoing crises such as the Covid-19 pandemic,food insecurity,and exchange rate vulnerabilities.Guarantees,insurance,and currency hedging could better address current fiscal realities and catalyze more private investment(OECD,2020a).Stakeholders should tailor their solutions to local factors li

50、ke depth of capital markets and implementation capacity.For instance,the Liquidity Sustainability Facility(LSF),established by UNECA in 2021,aims to compress liquidity premiums and improve sovereign access to international bond markets for African countries,drawing on additional Special Drawing Righ

51、ts(SDRs).Boldness to fund hard-to-abate sectors and less mature markets.While lending via traditional instruments(debt,equity,and grants)is critical,concessional finance players should take on greater risk,and,once they are de-risked and the project is operational,exit.Public actors should continue

52、to lend to energy projects when needed and focus grants on adaptation and AFOLU projects.Stakeholders should commit concessional finance to hard-to-abate sectors like industry and urban infrastructure;sectors where the transition has hardly begunlike natural capital in carbon sinks,biodiversity,and

53、ecosystem preservation;and nascent areas like the blue economy and green-fintech.Catalyze private finance,including domestic capital.Private climate finance comprises half of total climate finance globally.In Africa it is only 14%.Actual risk,perceived risk,and ticket sizes dissuade private capital

54、players,but several steps could be taken to expand investment.Development partners could target higher leverage ratios through blended financing structures,with a particular focus on an enhanced role for private insurance and partial guarantees.They could also support capacity building,both within d

55、omestic finance institutions and in developing a pipeline of investable opportunities.Information exchange platforms could make existing transactions more visible to investors.International networks like GFANZ could support pipeline development and back transaction accelerators.They could also engag

56、e actively with domestic institutions to source and bundle viable,well-diligenced transactions.Data tracking and disclosure to inform financing strategies.Data is crucial for converting NDCs into climate finance strategies,building effective solutions,and informing investors.Yet pervasive data gaps

57、exist across actors and sectors.Governments should climate tag to track their revenue and expenditure.This can support the deployment of existing budgets towards climate-friendly activities and redirect them away from carbon-intensive ones.Since climate information is critical to investors,private c

58、ompanies also need to produce this information.Overall,stakeholders need to boost climate risk analysis,and better track the progress in translating net zero pledges into tangible targets and flows.xLandscape of Climate Finance in AfricaEnhance the enabling environment through capacity building.Stak

59、eholders should support governments to make smarter climate decisions and develop climate-relevant policies.Some African countries have relatively robust regulatory frameworks in place(e.g.,climate finance acts,green bond investment guidelines,green fiscal incentives),but many do not.Governments can

60、 learn from their peers,jointly develop best practices,and inform regulations.This will help build enabling environments and unlock private investment.Facilitate climate investment at a sub-national level.Africa is urbanizing quickly,yet some regulations limit provinces,counties,and cities from expa

61、nding their financial or operational capabilities.Empowering local governments would improve vertical integration by avoiding policy gaps between national action plans and local initiatives.It could also ensure horizontal coordination across local governments.Kenyas Financing Locally-Led Climate Act

62、ion Program(FLLoCA)is an example of one approach that aims to build climate finance capacity at a county level.The socio-economic,ecological,and developmental benefits of climate finance investments far outweigh the costs of implementing them.This report,through robust evidence,aims to identify oppo

63、rtunities to scale up climate finance to ensure a just,fair,and inclusive transition for the region.Landscape of Climate Finance in AfricaxiCLIMATE FINANCE IN AFRICA IN FIGURESES Figure 2:Private and public climate finance flows vs.total cost by climate use(USD billion)ES Figure 3:Climate finance fl

64、ows and needs in Africa(USD billion,annual average)0500300Private flowsTotal Climate FinancePublic flowsNDCs Cost27725.24.2AdaptationMitigationDual Benefits1896225Flows NDCs CostNorth Africa 176West Africa 327East Africa 8210Central Africa 235Southern Africa 1102Unknown/Multiple Regions3x

65、iiLandscape of Climate Finance in AfricaCONTENTSForeword iiiExecutive summary v1.Introduction 12.Methodology 3 2.1 Data limitations 33.Climate finance needs in Africa 54.The climate finance landscape in Africa 7 4.1 Overall climate finance 7 4.2 Sources of finance 10 4.2.1 Public finance 10 4.2.2 Pr

66、ivate finance 13 4.3 Uses and sectors 155.Effectiveness and quality of climate finance 26 5.1 Disbursement and commitments 26 5.2 Gender responsiveness of climate finance 286.Role of key actors in unlocking climate finance in Africa 30 6.1 Climate finance mobilization 30 6.2 Tracking and reporting 3

67、37.Way forward 368.Annexes 37 Annex I:Various national tracking initiatives differing in their scope,timelines,and approaches 37 Annex II:Role of climate finance in deepening domestic financial markets 38 Annex III:Agri-Insurance solutions in Africa 39 Annex IV:List of African institutions which are

68、 Direct Access entities for GCF 409.References 41Landscape of Climate Finance in Africa11.INTRODUCTIONAfricas rapid urbanization,expanding infrastructure,and energy-access needs offer significant investment opportunities.The continent,while still poor by global standards,is undergoing profound chang

69、e.Hundreds of millions of people suffering from food insecurity,water stress,and weak access to electricity make infrastructure and energy upgrades all the more urgent.These sectors could unlock tens of billions of dollars in returns for first movers as new value chains,from sustainable agribusiness

70、 to fintech,score over extractives and other traditional sectors in their investment potential(EY,2020).Meanwhile,the continents rich mineral reservescritical for clean power technologiesmake it a key player in the global energy transition.On the back of improved governance and investment conditions

71、,and a growing middle class consumer base,private and public investors could quickly capitalize these opportunities.However,worsening impacts of climate change could halt African countries in their tracks.The continent is one of the most vulnerable to climate change and nature loss,despite its low c

72、ontribution to global CO2 emissions(2%3%).Hundreds of millions of people face increasingly extreme weather,which worsens already high inequalities in health,income,employment,and gender.Achieving the Sustainable Development Goals(SDGs)and implementing NDCs become more difficult as climate change int

73、ensifies.While Africas climate investment needs are substantial,the cost of inaction is even higher.To realize the true opportunity of climate-related investments,stakeholders must factor in all socio-economic and ecological trade-offs.Figure 1 shows that while climate investment needs are large,opp

74、ortunities and savings associated with such investments are even larger.For example,mitigation and adaptation investments can turn increasing costs into new revenue streams;an upfront investment in resilience yields a benefit-to-cost ratio of 12(GCA,2021b)and reduces rebuilding costs by 25%.2Landsca

75、pe of Climate Finance in AfricaFigure 1:Estimated climate finance flows,costs,and opportunities in AfricaNote:We compiled these estimates from different reports;they may not be directly comparable to each other in terms of scope and sector coverage.We aim to clarify the current state of climate fina

76、nce in Africa and build a credible baseline of finance flows.This report focuses on volume,sources,thematic uses,and sectoral allocation of these flows.It is a crucial piece in the effort to identify financing gaps,barriers,and opportunites to increase the scale and effectiveness of climate finance.

77、The structure of the report is as follows:Section 2 introduces the methodology and analytical approach based on CPIs flagship report,the Global Landscape of Climate Finance.It also explains key data limitations.Section 3 provides estimates of climate finance needed in Africa,based on NDCs of its cou

78、ntries.Section 4 presents overall tracked climate finance flows for 2019/2020.It includes an assessment by source(public and private);use(adaptation,mitigation and dual benefit);end-use sector;instrument(debt and equity);and geographic breakdown by sub-region.Section 5 discusses the efficacy of clim

79、ate finance from two perspectives disbursements and gender responsiveness.Section 6 builds upon the evidence and challenges identified throughout the report,and provides recommendations for public and private actors.Tracked climate finance in AfricaUSD 30 billion per year in 2019/2020Cost and needs

80、to implement NDCsCost:USD 277 bn per year Mitigation:183 bnAdaptation:66 bnDual benefits:28 bnECONOMICDEVELOPMENTALAvoided GDP losses in the long run(to 2100)in SSA:USD 5.5 trillion per yearAdaptation benefit-cost ratio for early action:At least 12 to 1(GCA)Agricultural output reduction avoided by 2

81、050 for a 2 degree:10%(UNEP)Agricultural land remediation benefit-cost ratio:Over 35 in 11 African countriesHigh levels of global mitigation action to reduce adaptation costs by 75%Return on urban climate investments in 35 African cities:3.2-5.7 times,USD 1.1 trillion by 2050Jobs:0.7 million in 2030

82、 in energy sector,11.8 million by 2050Energy security:1.5-2 times high by 2040/2050Avoided displacement:8 million migrating within their own countries by 2050Implication for SDGs on health,gender,etc.OPPORTUNITIES/SAVINGSLandscape of Climate Finance in Africa32.METHODOLOGY The Landscape of Climate F

83、inance in Africa(the Landscape)presents a snapshot of climate finance flows in Africa in 2019 and 2020.7 It leverages Climate Policy Initiatives robust climate finance accounting taxonomy and methodology(CPI,2021b)to provide a comprehensive overview of primary investment flows in Africa that have di

84、rect or indirect greenhouse gas(GHG)mitigation or adaptation benefits.The methodology and its composition is constantly evolving;the following broad definitions have been used for operational purposes:1.Mitigation finance:Resources directed to activities contributing to reducing,or avoiding GHG emis

85、sions,including gases regulated by the Montreal Protocol,or maintaining or enhancing GHG sinks and reservoirs.2.Adaptation finance:Resources directed to activities aimed at reducing the vulnerability of human or natural systems to the impacts of climate change and climate-related risks,by maintainin

86、g or increasing adaptive capacity and resilience.3.Dual benefits finance:Resources directed to activities contributing to both climate change mitigation and climate change adaptation,and meeting the respective criteria for each category.2.1 DATA LIMITATIONSWhile this report presents the most compreh

87、ensive information available for climate finance flows in Africa,methodological issues and data limitations persist(refer to the methodology document for data sources,data treatment,and limitations).Figure 2 outlines the key data gaps encountered in tracking climate finance.These mainly concern dome

88、stic government expenditure,investments from the private sector,and South-South flows.Within sectors,climate finance at the project-level is particularly difficult to track as its processes are prone to confidentiality restrictions.Additionally,there are methodological challenges in what counts as c

89、limate finance in different energy-intensive,hard to abate industries(CPI,2021b).Furthermore,this report tracks actual climate commitments from financial actors,since disbursements remain largely undocumented at the project level.We have attempted to fill these data gaps to the best extent possible.

90、7 CPI reports two-year averages(2019 and 2020)to smooth out annual fluctuations in data4Landscape of Climate Finance in AfricaFigure 2:Tracked and untracked climate finance by actors and sectorsNote:Other&Cross-sectoral flows include financing for capacity building,policy support at national level,d

91、isaster risk management,financial inclusion,Covid-19 and other benefits such as healthcare and social security.PublicDomesticPrivatePublicInternationalEnergySystemsAFOLUTransportWater and WastewaterBuildings and infrastructureIndustryOther&Cross-sectoralLimited TrackingNot TrackedTrackedLandscape of

92、 Climate Finance in Africa53.CLIMATE FINANCE NEEDS IN AFRICAImplementing Africas climate response8 will cost around USD 277 billion annually between 2020-2030(CPI,2022)based on each countrys NDCs.African Governments have committed USD 26.4 billion of domestic public resources annually,about 10%of th

93、e total cost(Figure 3).However,given debt levels and other development priorities from concurrent crises,African countries may not be able to provide as much domestic public climate finance as was initially estimated.In fact,23 African countries are either in debt distress or at high risk of debt di

94、stress(IMF,2022).The remaining USD 250.6 billion,defined as climate finance needs,must largely come from international public sources and domestic and international private actors(CPI,2022).It is important to note that these needs may also be expressed as opportunities.Figure 3:Climate finance needs

95、 by subregions,thematic area,and sectors(2020-2030,USD billion)8 Based on latest NDCs submission by 53 African countries.It is important to acknowledge that adaptation needs are likely to be underestimated due to a lack of data and technical expertise to estimate the true cost of adaptation measures

96、.Please refer to CPI,2022 for more detailsMitigation,$1607 bnAdaptation,$579.2 bnDual Benefits,$242.8 bnWestern AfricaCentral AfricaSouthern AfricaEastern Africa70%30%75%25%77%14%9%22%29%57%57%22%21%Northern Africa6Landscape of Climate Finance in AfricaMitigation actions represent the largest financ

97、ing opportunities,accounting for 66%of the total need(or USD 1.6 trillion),followed by adaptation measures(24%,USD 579 billion)and actions impacting multiple sectors(10%,USD 243 billion).Within mitigation,four key sectors account for the lions share of the needs:transport(58%),energy(24%),industry(7

98、%),and AFOLU(7%).However,excluding South Africa which reports the largest needs in the transport sector,the sectoral breakdown changes to energy(39%),AFOLU(27%),industry(21%),and transport(10%).Adaptation finance is needed mainly in agriculture(25%),water(17%),infrastructure and buildings(12%),disas

99、ter prevention and preparedness(10%),and health(8%).9 Every actor in the financial system can tap into these opportunities by re-examining their mandates and incentives.Across Africa,both public and private actors need to scale up their own finance while leveraging other sources,and at the same time

100、 collaborative approaches that will accelerate mobilization of the required capital.Public finance alone will not be sufficient;hence successfully mobilizing the private sector will be crucial if estimated investment needs are to be met.In fact,more than 50%of the finance needs in mitigation sectors

101、 in Africa are forecast to be financed by the private sector(GFANZ,2021),as shown in Figure 4.Targeted support from public actorsthrough policies,regulations,and public financeis crucial for driving private finance in the region.Figure 4:Climate finance needs by actor for electricity,transport,build

102、ings,industry,low emission fuels,and the AFOLU sector(2020-2030)Source:GFANZ and Vivid Economics9 It is important to acknowledge that these estimates could be underestimated due to lack of capacity,guidance,and information to conduct accurate assessments,especially for adaptation measures.Also,the q

103、uantitative information by sector and subsector is incomplete,with only 30 countries estimating needs by sector28%11%3%CorporationsCommerical FisHouseholds/IndividualsMCFsInfrastructure FundsDFIsSOEs and SOFIsGovernment12%17%1%10%18%Landscape of Climate Finance in Africa74.THE CLIMATE FINANCE LANDSC

104、APE IN AFRICAThis section presents estimates of climate finance flows in Africa in 2019/2020.We use an annual average of the two years to smooth out any yearly fluctuations.4.1 OVERALL CLIMATE FINANCE At USD 29.5 billion,total climate finance flows in Africa represent only 11%of the estimated USD 27

105、710 billion needed annually to implement its NDCs and meet its 2030 climate goals(CPI,2022).The vast majority of this climate investment is from public international actors(80%)and private sector finance(14%).Contributions from African Governments(4%)remain largely unreported due to insufficient tra

106、cking of domestic climate budget expenditures.All African regions received significantly less finance than their needs,with investment gaps varying among countries.Comparing climate finance flows and needs at the regional and country level can be challenging due to differences in geography,economic

107、contexts,and methodologies for estimating needs,as well as their varying vulnerability to climate change.However,the largest financing gap exists in the Southern African region,largely attributed to the high climate finance needs identified by South Africa combined with one of the lowest levels of r

108、egional climate investment(Figure 5).Figure 5:Climate finance flows and needs in Africa(USD billion,annual average)Note:Needs are annual averages for 2020-2030;Flows are annual averages for 2019 and 2020.10 This is the total cost of implementing NDCs in Africa,based on countries NDC submission Flows

109、 NDCs CostNorth Africa 176West Africa 327East Africa 8210Central Africa 235Southern Africa 1102Unknown/Multiple Regions38Landscape of Climate Finance in AfricaWhen compared to their GDP,the Democratic Republic of Congo,South Sudan,Somalia,Seychelles,and Mauritania have the highest investments gaps,r

110、anging from 57%to 128%of their GDP.Countries including Mauritius,Tunisia,Morocco,Egypt,and Namibia face investment gaps in the range of 1-5%of their GDP.Positive factors such as possessing a diverse economy,innovation,skilled labor,quality of social and physical infrastructure,and institutional capa

111、city,have influence on a countrys adaptive capacity to respond to climate shocks and access climate finance.Yet while they have a relatively low financing gap(as a%of their GDP),the absolute climate finance needs in these countries are still three to six times higher than their actual flows.Despite

112、a more balanced split than in other parts of the world,expenditure on both mitigation and adaptation needs to increase substantially in Africaby at least 13 and six times,respectivelyif NDC commitments are to be met.Mitigation accounted for 49%of climate finance flows in Africa,followed by adaptatio

113、n at 39%,and dual benefits finance at 12%.This is an encouraging trend,given Africas acute need for adaptation financing,which is being increasingly prioritized by DFIs.However,this pales in comparison to the annual mitigation and adaptation cost of USD 189 billion and USD 62 billion,respectively.Mo

114、reover,countries often underestimate their financial needs,especially for adaptation,due to data and methodological issues in costing their NDCs(UNFCCC,2021),so this gap is likely to be even greater.Figure 6 plots climate vulnerability(as per the ND-GAIN Climate Vulnerability Index 2019)and tracked

115、adaptation finance per capita for African countries.The correlation,albeit a weak one,suggests that relatively more vulnerable African countries are receiving less adaptation finance per capita than others.Figure 6:Per capita adaptation finance(USD,2019/2020 averages)and ND-GAIN Vulnerability Index

116、2019 0554045500.350.40.50.60.7Tracked Adaptation Finance Per CapitaND-GAIN VulnerabilityUpper middle incomeLow incomeLower middle incomeLandscape of Climate Finance in Africa9Loans(56%)were the preferred instruments for climate finance in Africa,followed by grants(30%).Although this varie

117、d by country,sector,and type of project,the predominant funding vehicle for some key categories was(see Figure 7):Mitigation:loans(57%)Adaptation:grants(46%)and low-cost loans(30%)Adaptation in low-income countries:grants(69%)Adaptation in lower middle-income countries:loans(73%)Commercially attract

118、ive sectors(e.g.,energy):loans(56%)Agriculture,forestry,and other land use(AFOLU):grants(54%)Figure 7:Climate finance by thematic use and instruments(2019/2020 average,USD billion)0%20%40%60%80%100%Multiple objectivesAdaptationMitigationProject-level market rate debtLow-cost project debtGrantBalance

119、 sheet financing(equity)Balance sheetfinancing(debt)Project-level equityUnknown15%27%30%11%8%45%30%23%46%29%7%6%11%10Landscape of Climate Finance in Africa4.2 SOURCES OF FINANCE4.2.1 PUBLIC FINANCEMultilateral DFIs were the largest source of international public climate finance(40%,or USD 11.5 billi

120、on)with a relatively balanced split between mitigation and adaptation financing.Fifty-two percent of the financing from multilateral DFIs went towards adaptation activities;46%towards mitigation;and the remaining 2%towards projects with dual benefits.In the case of multilateral DFIs,2020 was the fir

121、st year when more adaptation finance was reported than mitigation,and adaptation finance showed a 23%year-on-year increase as opposed to only 5%increase in mitigation financing between 2019 and 2020(Figure 8).Figure 8:International public climate finance by public actors and instruments(2019/2020 av

122、erage,USD billion)Energy(24%),AFOLU(16%),transport(10%)and water(9%)were the key sectors financed by multilateral DFIs.However,a higher share(31%)went towards cross-sectoral projects.These include policy,budget,and capacity building(30%);R&D(10%);Covid-19 response and social protection(21%);and disa

123、ster-risk management(19%).Multilateral DFIs used a limited set of financial instruments to channel their investments.Seventy-seven percent of the funding was channelled through loans(47%at market rate and 30%at concessional rate),followed by 20%grants,and 3%equity financing(Figure 10).The energy sec

124、tor was the largest recipient of loans whereas grants were used primarily for cross-sectoral adaptation projects and those in the AFOLU sector.Multilateral Climate Funds(MCF)invested roughly USD 1 billion,or 3.5%of total climate finance,and only 7%of the total climate grants provided to Africa.The G

125、reen Climate Fund(GCF)provided the largest share(43%)of the total finance from Multilateral Climate Funds,followed by the Global Environment Facility(GEF)with 27%,Clean Technology Fund(13%),Least Developed Countries Fund(9%),and Adaptation Fund(4%).More than half 024681012SOE&SOFIMultilateral Climat

126、e FundsNational DFIsGovernment-DomesticLow-costproject debtGrantBalance sheetfinancingUnknownProject-level market rate debtProject-levelequityGovernment-International4.6Bilateral DFIs4.0Multilateral DFIs2.53.55.4USD billionLandscape of Climate Finance in Africa11(51%)of the funding from MCFs was use

127、d for mitigation projects while 28%was dedicated to adaptation,and the remaining 21%of climate finance had dual benefits.Mitigation financing was mainly channelled through concessional(53%)and non-concessional loans(15%),while more than 90%of the adaptation and dual benefits financing was in the for

128、m of grants.MCF flows were directed towards AFOLU(36%),energy(36%)and cross-sectoral projects(26%).Multilateral institutions concentrated their finance flows to a few countries,reflecting differences in the ability of African countries to attract international climate finance.Multilateral DFIs inves

129、ted 40%of their funding in five countries:Egypt,Morocco,Nigeria,Ethiopia,and Kenya.Similarly,MCFs invested 43%of their Africa finance in five countries:Ethiopia,Senegal,South Africa,Nigeria,and Ghana.These climate investment trends are partially influenced by broader investment ecosystems,such as th

130、e differences among African countries in socio-political and economic instabilities;regulatory and governance issues;micro-economic conditions such as lack of a pipeline of bankable projects;counterparty risks;lack of technical capacity,transparency and accountability mechanisms;and perceived risks

131、due to information asymmetries.Overall,these investment barriers contribute towards a lack of access to finance,including climate finance(Africa NDC Hub,2021).Particularly in the case of MCFs,these challenges often lead to countries drawing support from international and regional organizations accre

132、dited to access the funds(Garschagen and Doshi,2022).Eighty-six percent of GCFs committed portfolio in Africa in 2020 was funded through international organizations,which leads to lack of ownership and capacity building at a national level(SACFP,2021).Germany and France were the largest contributors

133、 of bilateral funding in Africa(Figure 9).Other European countries,Japan,and the United Kingdom were other key providers of finance.Most of the bilateral climate finance to Africa is provided in the form of debt.Climate flows from China remain largely under-reported because there is limited or no of

134、ficial reporting of its climate-related development assistance(refer to the methodology for details).12Landscape of Climate Finance in AfricaFigure 9:International public climate finance in Africa in 2019/2020 by bilateral development partners(2019/2020 average,USD billion)Note:Bilateral development

135、 partners include financing from governments and bilateral DFIs.Multilateral institutions are included for comparison purposes only.The lack of comprehensive climate tracking of domestic budget expenditures leads to significant data gaps in tracking domestic public climate finance.Contributions from

136、 domestic public actors such as African Governments and State-Owned Entities(SOEs),accounted for only 5.5%(USD 1.6 billion)of the total tracked climate finance.This study has accessed publicly available national communication documents such as the NDCs,Biennial Update Reports(BURs),and Climate Publi

137、c Expenditures and Institutional Review(CPEIRs)to collate the climate financing from African country governments.Box 1:Efforts to mainstream climate change in domestic budgets Most countries in Africa have ongoing efforts to improve budget planning in order to mainstream climate finance in their exi

138、sting development plans and policies.Since 2012,14 African countries have undertaken CPEIRs or similar exercises that provide discrete analysis,one-time analysis on country commitments,international support,and estimates for climate-relevant domestic expenditure(CABRI,2021).Building on these CPEIRs,

139、only Ghana and Kenya have mainstreamed climate Budget-tagging(CBT)systems,and similar climate coding is either under development or in the pilot stage in Ethiopia,Eswatini,Mauritius,Namibia,Nigeria,South Africa and Uganda.Such reforms within the Public financial management(PFM)systems are often reso

140、urce intensive,lengthy,and do not provide a breakdown of climate finance at sub-national level due to definitional and methodological challenges.024681012MultilateralRest of EUOthersUS&CanadaJapanUnited KingdomGermanyFranceUSD billionProject-level market rate debtLow-cost project debtGrantUnknownBal

141、ance sheet financingProject-level equity2.11.01.61.31.03.13.85.5Landscape of Climate Finance in Africa13Most national communication reports,such as the NDCs and BURs,also include a summary of international climate finance received from bilateral and multilateral development partners.However,BURs of

142、only four countries(Rwanda,Mauritius,Ghana,Eswatini)provided granular information on domestic expenditures through budgetary outlay towards climate change related policies and programs,with varying degrees of sectoral coverage and timelines.Of the data collated from publicly available reporting tool

143、s and documents,domestic climate finance as a percentage of GDP has remained less than 0.3%(see Annex I).According to Collaborative Africa Budget Reform Initiative(CABRI),climate-change expenditure as a share of total government expenditure varied between less than 1%(Uganda)and 15%(Ethiopia)(CABRI,

144、2021).African countries are estimated to have contributed more than 20%of their climate adaptation finance needs in 2017 with the level of investment varying between 2-9%of the GDP across 34 countries(SOAR,2018).However,such pan-African studies are limited and not updated enough to allow us to analy

145、ze the latest trends.4.2.2 PRIVATE FINANCEIn Africa,private finance remains concentrated in a handful of countries that have more developed financial markets.USD 4.2 billion was tracked as private investments in climate-related projects,which is only 14%of the total tracked climate finance flows(Fig

146、ure 10).In contrast,private climate finance as a proportion of total climate finance is much higher in other regions like Latin America&Caribbean(49%),East Asia&Pacific(39%),and South Asia(37%).Fifty percent of private finance in Africa came from domestic sources,followed by international(39%),and u

147、nknown sources(11%).Bigger African economies can offer larger investable opportunities with their political stability,more conducive regulatory environment,and the higher capacity of their local project developers to attract investors.For instance,non-LDC countriesSouth Africa,Nigeria,Kenya,Morocco,

148、and Egyptaccounted for 50%of total tracked private finance.LDCs received 24%of total private financing with Mozambique,Ethiopia,and Burkina Faso being the largest recipients.But a majority of the key elements required by private sector participationliquid bond markets,currency stability,investment g

149、rade ratingdo not yet fully exist in African economies(refer to Annex II for more details).14Landscape of Climate Finance in AfricaFigure 10:Share of private climate finance to total climate finance by region(2019/2020 average)Energy projects,with a generally more stable risk-return profile,attracte

150、d the largest share of private investments(74%).Most of this investment came from corporates and commercial financial institutions in the form of equity and non-concessional loans(Figure 11).Institutional investors including philanthropic foundations were the largest investors in the AFOLU sector,fu

151、nding projects like sustainable crops and agro-forestry.Globally,a large share of private financing gets mobilized for renewable energy projects,public-private partnerships in the transport sector,and electric vehicles.However,a small share of climate finance in other sectors can be attributed to mi

152、ssing investment data and limited reporting.Moreover,private investments in adaptation are currently limited,owing to issues like inadequate understanding of financial models for adaptation projects,lack of investible pipelines,and misalignment of risk-return time horizon for private actors(UNEP,201

153、7).Tracking of adaptation investments is also difficult because of challenges associated with context dependency;the uncertain causality of investments made;lack of impact metrics;and confidentiality and reporting requirements(CPI,2019).Figure 11:Private climate finance by sector(2019/2020)0%20%40%6

154、0%80%100%Private Public Central Asia and Eastern Europe39%61%East Asia and Pacific38%62%Latin America&Caribbean48%52%Middle East 46%54%SouthAsia36%64%Africa 14%86%US&Canada96%Western Europe59%41%USD million74%Energy SystemsOthers Cross-sectoralBuilding InfrastructureAFOLUWater&Wastewater9%7%2%1%Indu

155、stry7%Landscape of Climate Finance in Africa15Figure 12:Private climate finance by providers(2019/2020 average,USD billion)4.3 USES AND SECTORSFigure 13:Uses,instruments and sectors00.51.01.52.0UnknownCorporationsHouseholds/IndividualsInstitutionalinvestorsFundsCommercial FIsEnergy SystemsBuildings&

156、InfrastructureAFOLUOthers&Cross-sectoralICTIndustryTransportWater&Wastewater0.870.120.210.140.10.301.540.140.190.20USD billionGrant$8.75Water$2.71Buildings&Infrast.$1.32Others&Cross-sectoral*$8.86AFOLU$4.62Transport$2.57EnergySystems$9.40Low-costproject debt$8.29Project-levelmarket rate debt$7.63Pro

157、ject-level equity$1.80Balance sheet financing$1.82equity$1.24,debt$0.59 Unknown$1.22Adaptation$11.37Mitigation$14.59Dual Uses$3.19Unknown$0.36INSTRUMENTSWhat mix of financial instruments are used?USESWhat types ofactivities are financed?SECTORSWhat is thefinance used for?16Landscape of Climate Finan

158、ce in AfricaENERGY SYSTEMS In addition to reducing carbon emissions from its energy systems,Africa must mobilize sustainable and affordable access to energy finance for the approximately 600 million people who lack access to electricity,and the more than 900 million people in sub-Saharan Africa alon

159、e who lack access to clean cooking solutions.Africas rich reserves of minerals(lithium,cobalt,copper,etc.)that are critical for clean energy technologies position Africa as a key player in the global energy transition(Mukarakate,2021).Investments in clean energy technologies also have a strong multi

160、plier effect on GDP growth.Globally,installed renewable capacity has more than doubled in the last decade due to falling costs and policy support(WRI,2021a),but less than 2%of this new capacity was installed in Sub-Saharan Africa where it is critically needed.Despite investment in energy systems acc

161、ounting for 59%of mitigation finance and 29%of total climate finance,this investment(USD 9.4 billion)still falls short of the needs,estimated at USD 133 billion.Of this total,power and heat generation projects accounted for the majority of investments mobilized(66%or USD 5.6 billion).On-grid solar s

162、olutions received the largest share(USD 3.3 billion)while the rest went towards wind(USD 876 million),energy efficiency improvements(USD 885 million),hydro(USD 227 million),and waste-to-energy(USD 94 million),among other renewable energy solutions11.Off-grid and mini-grid solutions and Transmission

163、and Distribution(T&D)accounted for USD 591 million and 1.2 billion,respectively.The rest of the funding supported activities centred around energy polices and reforms,and capacity building,while some remained unallocated.Fifty-one percent of the energy investment was accounted for by only seven coun

164、triesSouth Africa(12%),Nigeria(8%),Morocco(8%),Egypt(8%),Mozambique(5%),Kenya(5%),and Tunisia(4%).Despite offering a more stable risk-return profile,energy sector investments from private actors are limited in Africa.Sixty-seven percent of the investments were from public actors,including multilater

165、al DFIs(30%),bilateral development partners(22%),and African governments expenditure(7%).On the private side,more energy financing was provided by domestic corporations and commercial banks(15%,USD 1.4 billion)than international private actors(12%,USD 1.2 billion).The financing instruments varied ac

166、ross different finance providers(Figure 14).While financing from multilateral DFIs was extended primarily through non-concessional(53%)and concessional loans(27%),bilateral financing was mostly through concessional loans(67%),and government financing through grants.11 Other amounts could not be allo

167、cated to a specific technology.Landscape of Climate Finance in Africa17Figure 14:Energy sector finance by main providers and instruments(2019/2020 average,USD billion)Note:Government financing was split between international donors(65%)and domestic government(35%)Box 2:Capital needs to shift towards

168、 just and climate-aligned purposes.Current climate finance flows in the region are dwarfed in comparison to fossil fuel financing.High carbon investments and expenditures continue to dominate the region,stifling its energy transition.Public and private institutions invested at least USD 29 billion12

169、 per annum between 2016 and 2021 into fossil fuel companies and projects in Africa(Banktrack,2022).Almost 90%of this financing was from financial institutions from the Global North(North America,Europe,and Australia 56%)and Asia(China,and Japan 32%).Further,fossil fuel subsidies for the region avera

170、ged USD 37 billion in 2019 and 2020(OECD,2022b).Traditionally,these subsidies were used as means of closing the energy access gap,but fossil fuel-based energy is no longer a cost-effective means of providing electricity(Tucker et al,2021)when compared with distributed renewable energy.In fact,these

171、subsidies,along with other policies and incentives,support investment in new fossil fuel infrastructure,and increase the potential for stranded assets by artificially lowering the risks in fossil fuel investment.USD 230 billion and USD 1.4 trillion of new oil and gas projects in Africa are at risk o

172、f becoming stranded assets by 2030 and 2050,respectively(Banktrack,2022).12 This is obtained by converting the total financing of USD 132 billion between 2016 and June 2021 to annual averages.0%20%40%60%80%100%Equity GrantOther public actorsMultilateral Climate FundsCommercial FIGovernmentBilateral

173、DFICorporationMultilateral DFI13%28%54%95%66%28%18%12%58%12%98%76%14%40%27%30%0.40.80.80.81.11.52.8Low-costproject debtProject-levelmarket rate debt18Landscape of Climate Finance in AfricaA transition from fossil fuel-based economies to renewable-powered growth must adhere to the tenets of just tran

174、sition,but it also presents an opportunity to make investments climate aligned.An effective energy transition will require a multidisciplinary approach involving policy support,new financing mechanisms,and alternative business strategies for stakeholders in the value chain.A case in point is the Jus

175、t Energy Transition Partnership(JETP)model a USD 8.5 billion support from donor governments to South Africa to support its power sector decarbonization and just transition interventions.This includes decarbonization of the power sector including rehabilitation and repurposing of mines and providing

176、support to develop new economic opportunities such as green hydrogen and electric vehicles among other things.If successful,this donor-funded but national government-led just transition model can practically demonstrate how just transition can be achieved and financed,for other countries to replicat

177、e.Figure 15:Tracked climate finance vs.fossil fuel financing (2019/2020 average,USD billion)Fossil fuel subsidies include direct budgetary transfers and tax expenditures providing a benefit or preference for fossil fuel production or consumption(coal,petroleum,natural gas,and end-use electricity),al

178、ong with induced transfers.AGRICULTURE,FORESTRY AND OTHER LAND USE(AFOLU)AFOLU is the second highest contributor of GHG emissions in Africa and is also one of the sectors most vulnerable to the impacts of climate change.Agriculture contributes to over a third of Africas GDP,employing more than 5562%

179、of the Sub-Saharan workforce and accounting for 57%of the regions emissions(AfDB,2022).The cost of action on climate adaptation of agriculture and food systems in sub-Saharan Africa is less than a tenth of the cost of inaction:USD 15 billion compared with USD 201 billion per annum(GCA,2021b).The mag

180、nitude of current AFOLU investments is relatively low compared to the sectors needs.Despite the economic and social importance of the AFOLU sector,it received only 16%of the total climate finance in Africa(USD 4.6 billion).Responding to the high climate vulnerability faced by the AFOLU sector,the ma

181、jority of climate investments for the sector went into adaptation projects(62%,USD 2.8 billion)with the remaining amount split between mitigation(20%)and dual benefit projects(18%).Within AFOLU,the agriculture sub-sector received the largest share(58%or USD 2.7 billion),followed by forestry(12%37.0F

182、ossil fuelsubsidiesFossil fuelfinancing29.3Renewable energy systems9.4Total Mitigationfinance14.6Landscape of Climate Finance in Africa19or USD 0.5 billion)and policy,national budget support,and capacity building activities(7.5%,USD 350 million).More than 20%of the finance for AFOLU,USD 970 million,

183、could not be allocated to a specific sub-sector due to limited granular information.Given this sectors implications for food security,gender,biodiversity,and water security,it is possible that some additional portion of the finance flowing to the AFOLU sector is captured in the cross-sectoral sub-ca

184、tegory.For instance,USD 280 million of finance was directed to food assistance and security programs in the area classified as cross-sectoral.Climate financing from international public financial actors dominates AFOLU investments in Africa(93%).A majority of the finance was provided by multilateral

185、 DFIs and governments,accounting for 40%and 32%,respectively,followed by bilateral DFIs(12%),and climate funds(8%).Multilateral DFIs used grants as well as concessional and non-concessional loans in almost equal proportion,while governments and MCFs relied heavily on grants92%and 81%each(Figure 18).

186、Insurance is not captured in the Landscape though it plays an important role in the agriculture sector in transferring the risks associated with weather and climate fluctuations and provides credit enhancement to boost borrowers access to bank credit(Refer to Annex III for more details).Figure 16:AF

187、OLU by main providers and instruments(2019/2020 average,USD billion)It is difficult to provide an accurate picture of private funders contributing directly to AFOLU investments due to a lack of standardized,easily accessible information on private investments at both the domestic and international l

188、evel.Based on publicly available data for 2020-2021,an estimated USD 223 million of asset managers portfolios were focused on AFOLU sectors in African markets,using a climate and/or sustainability lens(refer to the methodology document for more details).0%20%40%60%80%100%MultilateralClimate FundsBil

189、ateral DFIGovernmentMultilateral DFI0.0 0.2 0.4 0.6 0.8 1.0Low-costproject debtProject-levelmarket rate debtEquity Grant29%37%34%92%77%81%14%14%0.40.61.51.920Landscape of Climate Finance in AfricaBox 3:Mainstreaming climate change in agriculture investment More than 40%of the 78 banks interviewed in

190、 the 2021 EIB Banking in Africa survey reported having at least 10%of their portfolio in agriculture(EIB,2021).CPI interviewed two large African banks,the Absa Group and the Standard Bank Group(SBG),to get more insights into the way African banks are incorporating climate into their agriculture port

191、folios.Key findings include:Limited climate financing products offered for agriculture:Both banks provide funding to agriculture projects with both climate mitigation and adaptation benefits(solar energy,drip irrigation,greenhouses),but do not offer specific,structured climate financial products.Mos

192、t AFOLU climate-related investments are at the intersection of renewable energy and agriculture:Most funding to farmers and other value chain actors are targeted to ensure a consistent supply of power and water,in addition to the replacement of fossil fuel energy with renewables(ICA,2018a,2018b).Pre

193、valent technologies primarily target improved water management through irrigation systems or hydroponic irrigation,and small-scale embedded generation projects that are integrating energy production into existing agricultural businessesmostly solar.There have been efforts towards climate-aligning in

194、vestments but reporting on AFOLU climate investment remain largely untracked.54%of African banks include green finance principles at various levels(EIB,2021).In 2020,Absa Bank produced their first report on climate risk aligned with the recommendations of the Financial Stability Boards Task Force on

195、 Climate-related Financial Disclosures(TCFD)(Absa,2020),which identified their agriculture portfolio to represent 5%of their total loans and advances.Standard Bank has also made steps towards defining an institutional strategy and framework for climate finance as part of their wider sustainability f

196、inance policies.Notwithstanding these efforts,quantitative information on the actual investments in AFOLU with a climate lens is not included in the annual reports of either bank.Banks wider ESG targets offer opportunities to expand climate finance to agriculture.SBG recently set an overall commitme

197、nt for net zero emissions by 2050(SBG,2022a)and sustainable financial target of USD 16.4 20 billion by the end of 2026.The use of renewable energy is identified as the main opportunity to achieve net zero in agriculture,together with climate-smart agriculture,and the use of digital platforms for sma

198、llholders.Absa has set a sustainable finance target of USD 6.2 billion in ESG-related financing.SBG has also designed its Sustainable Bond Framework which,through the sustainable management of natural resources and land use,includes contribution to climate-smart agriculture,efficient water managemen

199、t,and reduction of GHG emissions from agricultural practices.However,the two green bonds it has issued to date are largely focused on energy:a 2020 London Stock Exchange-listed bond aiming to raise capital for green assets in renewable energy,energy efficiency,water efficiency and green buildings(SB

200、G,2020),and a South Africa listed bond targeting finance for renewable energy projects in South Africa(SBG,2022b).Landscape of Climate Finance in Africa21WATER AND WASTEWATER There is massive opportunity for mainstreaming climate resilience both in the existing and new water infrastructure being bui

201、lt.Over 300 million Africans do not have access to clean drinking water and over 700 million live without access to adequate sanitation.The Africa Water Investment program states that USD 10-20 billion are committed every year towards water infrastructure,and an additional USD 50 billion is required

202、 annually by 2025 to meet the 2025 Water Vision and SDG 6 target of water security for all in Africa(AIP,2021).Water,despite being the second highest priority sector for NDC implementation,accounted for 23%of tracked adaptation financing,and 9%of total climate investments(USD 2.6 billion).As shown i

203、n Figure 17,multilateral DFIs(42%,USD 1.1 billion),governments(29%,USD 0.7 billion)and bilateral DFIs(23%,USD 0.6 billion)were the main providers of finance.The majority of water financing by multilateral DFIs was funded through concessional(18%)and non-concessional(57%)loans.Bilateral DFIs primaril

204、y used concessional loans(90%)while governments used a mix of grants(65%),non-concessional loans(17%),project-level equity(15%),and concessional loans(3%).Roughly a third of the climate financing in the water and wastewater sector targeted adaptation projects(66%,USD 1.7 billion)while the rest was e

205、qually divided between mitigation and dual benefits financing(16%,USD 425 million).Some of the solutions receiving water adaptation financing in Africa include water and waste-water collection,water treatment,hygiene and sanitation provisions,and rainwater harvesting.Figure 17:Water sector investmen

206、ts by main providers and instruments(2019/2020 average,USD billion)New,innovative financing solutions are emerging in Africa to respond to risks in the water sector and to build climate resilience.Many private sector actors have largely avoided financing water projects in the region due to cost reco

207、very challenges and lengthy project development and repayment timelines(ICA,2018b).Some financing structures,like contingent payment structures or results-based financing,have shown success in overcoming these challenges.For example,since 2018,UBS Optimus Foundation and Impact Water have been implem

208、enting Social Success Notes in Uganda which provide interest free loans to more than 600 schools to access clean drinking water.These are repaid by schools through the savings from fuel used for water purification(ANDE Global,2021).0%20%40%60%80%100%Bilateral DFIGovernmentMultilateral DFIEquity Gran

209、t25%18%57%62%16%19%11%89%0.60.71.1Low-costproject debtProject-levelmarket rate debt22Landscape of Climate Finance in AfricaSUSTAINABLE TRANSPORTTransport sector investments comprised only 9%(USD 2.6 billion)of total finance,with the majority of this investment in North Africa.With rising urbanizatio

210、n and growing infrastructure,pressure on cities and their transport networks is only expected to increase.Despite this,only 30%of the national climate change action plans by African countries include reference to public transport measures(World Bank,2022c).In fact,South Africa alone accounted for 94

211、%of the total transport funding needsUSD 657.8 billion between 2020-2030reported by countries in their NDCs.The top five recipient countries received 74%of all transport finance Egypt(36%),Kenya(22%),Morocco(6%),Nigeria(5%),and Ethiopia(4%).Multilateral DFIs(46%),bilateral DFIs(33%)and donor governm

212、ents(15%)were the key providers of this finance.These projects were funded mainly through concessional loans(47%)and non-concessional loans(35%),followed by grants(11%).Governance barriers for low-carbon transport infrastructure investments are particularly high as they are dependent on long-term pu

213、blic and urban planning along with political support.For these projects,high up-front costs and lengthy preparation and construction processes can make early-stage investment especially risky.Additionally,the long-term nature of transport infrastructure investments exposes hard currency investors to

214、 high currency risk.Furthermore,investments in electric vehicles are extremely vulnerable to regulatory risks related to standards and incentives,as well as the lack of available charging infrastructure and reliable electricity supply.Structural and technological transformation of transport systems

215、will be needed to ensure lower emissions while ensuring equity,access,and inclusivity.A modal shift to lower-carbon transport(public transport,cycling);avoiding journeys where possible(localized sourcing,etc.);developing local manufacturing capabilities;lowering energy intensity of vehicles(EV vehic

216、les,increasing passenger occupancy rates and freight load factors,etc.);adopting low-carbon fuels;investments in associated and new infrastructure;and integrated urban planning,will all be needed.BUILDING AND INFRASTRUCTUREBuilding and Infrastructure investment comprised 4.5%(or USD 1.3 billion)of t

217、he total climate finance investment.Of the tracked finance,multilateral DFIs accounted for 50%of the total finance,followed by private actors(21%)and bilateral DFIs(16%).A majority of it was financed through non-concessional debt(41%),grants(26%),and concessional debt(23%).With rapid urbanization,th

218、e large infrastructure deficit(housing,transportation,electricity,water sanitation)in terms of quality,quantity,and access will only increase.This sector accounts for 61%of energy use and 32%of energy-related carbon emissions(IEA,2019).The lack of strategic and spatial urban planning could lock in i

219、nefficient,poorly designed,vulnerable and energy inefficient urban infrastructure for decades to come(CCFLA,2020).Also,without adaptation and resilience,climate-related infrastructure damages and repair will cost African cities substantially.On the other hand,USD 280 billion of incremental investmen

220、t,to deliver clean,and connected development in 35 African cities,can lead to a return of more than four times by 2050(Coalition for Urban Transition,2021).Landscape of Climate Finance in Africa23Box 4:Estimating investments into Climate Resilient Infrastructure(CRI)There is significant investment o

221、pportunity for Climate Resilient Infrastructure(CRI)in Africa.With infrastructure financing needs as high as USD 170 billion per year by 2025,it is imperative to mainstream resilience across infrastructure investments by catalyzing a true shift in understanding,planning,financing,and sustaining CRI.

222、Even though building resilience increases the upfront costs of infrastructure investments by 3%,the benefit-to-cost ratio is estimated at about 4:1(GCA,2019,Hallegatte et al.,2019).For instance,hydropower systems in Africa can experience potential revenue increases of 20 140%in Eastern Nile,Niger,an

223、d Volta basins,if climate change scenarios are integrated in design and building.However,a more robust methodology to track investments made towards CRI in Africa(and other regions)is needed to identify gaps and entry points for new investments,and to measure progress towards a resilient future.Such

224、 a methodology needs to consider the following key points:1.Build a taxonomy of CRI interventions:CRI can be built in two ways.One,by mainstreaming resilience of infrastructure that is built and operated,to adapt to the impacts of climate change.Second,by building resilience through infrastructure w

225、here the asset increases the resilience of the beneficiaries or communities by reducing vulnerability and exposure(GCA,2021a).There are more than 200 tools,guidance,and standards available worldwide to practitioners and stakeholders across the infrastructure lifecycle to build and maintain CRI(ICSI,

226、2021).Recent studies are also exploring best practices in engineering design and innovative approaches that are more context-specific for strengthening infrastructure assets in Africa(Alemaw,&Sebusang,2019).A starting point is a regional or national taxonomy for CRI in order to develop and make avai

227、lable consistent indicators and contextual information on resilience to climate risks.2.Estimate the share of CRI investments:The share of the climate resilience component in project investment costs will depend on the type of CRI being built.Large uncertainties are involved in estimating the share

228、of total investments going into strengthening the components of infrastructure assets.Investment costs are greatly dependent on many internal and external factors,such as the quality and quantity of infrastructure being built,type of engineering intervention,and the frequency and intensity of climat

229、ic hazards.For example,increasing the flood resilience of a railway line by elevating it costs 50%of its value,whereas protecting a hydropower plant against flooding by creating bigger spillway capacity,costs only 3%of its value(Miyamoto International,2019).Such estimates would help in establishing

230、the business case for mainstreaming climate resilience while planning and allocating financial resources.3.Develop reporting standards for infrastructure investments:Disclosure requirements for infrastructure must align with broader global reporting standards.Stakeholders across the infrastructure l

231、ifecycle should collaborate to provide contextual information while ensuring that the data is reliable and comparable.24Landscape of Climate Finance in AfricaOTHER&CROSS-SECTORAL ACTIVITIES Cross-sectoral or nexus solutions,critical for economy-wide development,accounted for 29%(USD 8.5 billion)of c

232、limate finance.Apart from linking climate goals with the SDGs,these cross-sectoral solutions can provide other co-benefits,including breaking siloes at the institutional,sectoral,and national levels;facilitating better sectoral information structures;and capacity building.Approximately 56%of the cro

233、ss-sectoral and other flows targeted adaptation projects,25%went towards mitigation,and the rest were used for projects with dual objectives.Cross-sectoral projects were mostly funded by grants(47%)from multilateral DFIs and governments.Figure 18:Cross-sector finance by sub-sector(2019/2020 average,

234、USD billion)COASTAL ECOSYSTEMS,BIODIVERSITY,AND NATURE-BASED SOLUTIONS Currently,only USD 200 million of tracked adaptation financing went towards projects that build resilience in coastal ecosystems and biodiversity conservation,mostly tagged as AFOLU or cross-sectoral flows in East and West Africa

235、(medium confidence13).The Landscape does not tag and track financing towards Nature-based Solutions(NbS)separately as of now,primarily because of double-counting issues in the absence of a clear definition.Relevant NbS activities may include plantation,conservation,and restoration of mangroves and n

236、atural coastal vegetation to adapt to increased coastal erosion and rising sea levels;rehabilitating coral reefs and seagrass areas;protection of coastal wetlands and salt marshes;building coastal risk information and governance systems;empowering coastal communities through sustainable livelihoods,

237、etc.(IUCN,2020,USAID,2009).Additionally,with river basins covering approximately 64%of the continents landmass,the blue or ocean economyeconomic activities based on marine and aquatic resourcesis estimated to be a major contributor to continental transformation and growth(Agenda 2063 of the African

238、Union).13 These are based on manual tagging of projects,based on their project description,when available0%20%40%60%80%100%ResilienceFood AssistanceSocial ProtectionUrbanBiodiversityHealthCovid-19 ResponseEducation/TrainingFinancial Service&BusinessDisaster-Risk ManagementOther/UnspecifiedPolicy,Bud

239、get&Capacity BuildingDual UsesMitigationAdaptation1.91.91.20.80.60.50.40.30.30.30.20.050%Unknown37%12%28%41%31%13%37%20%63%25%12%79%7%26%16%59%59%35%6%71%28%95%87%13%30%97%98%14%Landscape of Climate Finance in Africa25If implemented well,NbS can address the triple problem of poverty,climate change,a

240、nd biodiversity loss.However,currently African NDCs do not provide estimates of investing needs for adaptation in the coastal ecosystems sector and NbS.Also,there is limited systematic guidance on integrating NbS into development strategies and sectoral polices.A recent UNEP report suggests that the

241、re is an almost USD 5 billion annual investment gap in broader NBS-related financing in Africa.26Landscape of Climate Finance in Africa5.EFFECTIVENESS AND QUALITY OF CLIMATE FINANCEClimate finance flows are important,but how effectively that finance achieves its goals is even more critical.The effec

242、tiveness of climate finance can be measured through various lensesfair and equitable access,stakeholder ownership,linkages to national priorities,impact on climate and socio-economic parameters,mobilization of additional finance,gender responsiveness,etc.(UNFCCC,2021).However,data,definitions,framew

243、orks,standards,and metrics are lacking,which makes the assessment of effectiveness difficult.Two of these dimensions are discussed in further detail in this section disbursements and gender responsiveness,mainly because of the availability of relatively better data.5.1 DISBURSEMENT AND COMMITMENTS C

244、limate finance can only make an impact once it is disbursed.The ratio of aggregated disbursements to commitments in any one year/period is a way of assessing whether approved projects are being implemented as planned,or whether they are encountering difficulties on the ground(SEforALL,2020).This ana

245、lysis is based on data from the OECDs Creditor Reporting System(CRS)database(OECD,2022a)which,to the best of our knowledge,provides the most comprehensive and comparable data on disbursed international development finance.The analysis is based on finance provided bilaterally by international governm

246、ents to Africa,climate funds,and to other international institutions.However,MDBs are not included in the analysis because actual disbursements of climate-related finance are not reported in the OECD data.Figure 19 compares disbursement ratios for development finance against climate finance,as it co

247、mpares ratios across sub-regions in Africa and the rest of the world.Total committed climate finance captured in this analysis covers around 37%of total climate finance(USD 11 billion per year),while Official Development Assistance(ODA)equalled USD 38.5 billion in 2019/2020.Landscape of Climate Fina

248、nce in Africa27Figure 19:Disbursement Ratios(2019/2020 average,USD billion)Note:Disbursements are more than 100%because they are aggregated across providers instead of averages of project-level disbursement rates.KEY TRENDS:The climate finance disbursement ratio in Africa(79%)was higher than the res

249、t of the world(65%),while it was similar for mitigation projects,and much higher for adaptation and projects with dual objectives.When compared with all ODA,the climate finance disbursement ratio was generally lower across African sub-regions(except North Africa).At a sectoral level,disbursement rat

250、ios for climate finance projects in agriculture in Africa(81%)was higher than development assistance projects in the same sector(60%),while for the energy sector,the ratios were similar(90%).However,for the transport sector,the disbursement ratio for climate-tagged projects(44%)was lower than develo

251、pment assistance projects in the same sector(130%).Although Africa seems to be faring better in terms of disbursement than the rest of the world on average,the varying ratios across African countries provide more nuanced insights into how climate finance is working for individual sub-regions.A secto

252、r,sub-regional,and/or country level analysis on the differences in disbursement ratio at project level is out 0%20%40%60%80%100%Dual objective Mitigation Adaptation Climate Development0%30%60%90%120%Climate Development Southern Africa East Africa West Africa Central Africa North Africa Rest of the w

253、orld Africa 28Landscape of Climate Finance in Africaof the scope for this study,but several barriers are identified that hinder disbursement in Africa,including:Flaws in project design and technical barriers:The initial project/program design failed to incorporate operational realities of domestic m

254、arkets and financial institutions accurately or adequately(SeforAll,202014).For instance,undertaking an off-grid project in regions with already low tariffs for grid-connected electricity or high subsidies will not attract consumers,as they will wait for a grid extension.Poor institutional and regul

255、atory frameworks and capacity at the national level:There is often limited awareness and technical capacity regarding climate change policies and issues among government officials.Also,perceptions like climate change is a mandate only for the Environment Ministry may constrain the engagement of othe

256、r Ministries.This may have implications on effectively managing bureaucratic procedures including,but not limited to,due diligence,procurement,and reporting(Coalition of Finance Ministers for Climate Action,2022).Limited access and maturity of local financial institutions:Several results-based finan

257、cing programs may require intended beneficiaries to purchase a certain equipment/product/service.But the lack of access and availability to match local finance may hinder uptake of such projects,and subsequent disbursements.For conclusive evidence on barriers hindering disbursement in Africa,there i

258、s a need for better tracking and reporting of disbursed climate finance by all actors,especially the DFIs.5.2 GENDER RESPONSIVENESS15 OF CLIMATE FINANCE Achieving strong gender equality through synergies between climate and gender-based sustainable development offers a window of opportunity(UNDP&GGC

259、A,2016).Climate change reinforces and exacerbates existing gender inequalities,and those most impacted by the climate crisis are usually those who are most vulnerable.African countries are no exception,with gender inequalities embedded in their social,economic,and political structures.Several countr

260、ies now have policies that advocate gender mainstreaming within their national climate efforts,albeit in different ways and with varying degrees of success.Countries leading in gender-related reforms include Nigeria,Eswatini,and Rwanda(CABRI,2022).Tracking climate finance with a gender lens is an em

261、erging activity among public institutions;however,data is still scarce.Based on the OECD-CRS markers(OECD,2022a)16,and a few DFIs reporting on gender-sensitive climate finance in surveyed CPI data,Figure 20 compares gender responsiveness and tagging across different sub-regions and climate purposes.

262、The following trends are observed:32%of total climate finance was tagged for gender equality,of which only 19%was gender responsive.14 SEforAll(2021)focus on energy projects,but the listed barriers can be extrapolated to other areas of climate finance.15 Refers to finance in projects that target gen

263、der equality as a policy objective.16 The DAC Gender Equality Policy Marker of the OECD Creditor Reporting System(CRS),is used by members of the OECD Development Assistance Committee(DAC),which consist mostly of governments and national development financial institutions.Some development actors such

264、 as private philanthropy and multilateral organisations are now also using the DAC gender marker to report their activities,but the bulk of multilateral development financial institutions still do not report with a gender marker.Landscape of Climate Finance in Africa29 Adaptation and projects with d

265、ual benefits appear to offer the most potential for incorporating gender-responsiveness,currently reporting 27%and 43%of finances as gender responsive,respectively.On the other hand,only 7%of tracked mitigation finance was gender responsive.Gender finance ratios vary among regions.Gender-tagged rati

266、os range from 9%in Southern Africa to 40%in Eastern Africa,while gender responsiveness ratios vary from 3%(Southern Africa)to 25%(Eastern Africa).At the sectoral level,AFOLU and Industry had the highest gender responsiveness rates:35%and 28%respectively.Figure 20:Gender responsiveness of climate fin

267、ance flows by use and sub-regions(2019/2020 averages,USD billion)The lack of gender-tagged finance is correlated with the lack of definition and clear guidance regarding ways in which the concept of gender equality should be applied to different sectors,as pointed out in SEforALL(2020)analysis for t

268、he energy sector.Our study shows that the energy sector contains only 19%of gender-tagged finance.More granular and gender-tagged,project-level reporting by all actors can help better assess the progress of gender-sensitive climate finance,an area for future research.UntaggedTotal Climate FinanceAda

269、ptation0%Gender ResponsiveGender Non-Responsive20%40%60%80%100%MitigationDual Uses5.64.03.21.31.02.21.40.520.67.211.61.6North AfricaCentral AfricaWest AfricaEast AfricaSouthern Africa25.71.42.450.91.21.40.34.30.60.830Landscape of Climate Finance in Africa6.ROLE OF KEY ACTORS IN UNLOCKING CLIMATE FIN

270、ANCE IN AFRICABoth public and private actors committed USD 29.5 billion of climate finance annually to Africa in 2019/2020,falling far short of the estimated USD 277 billion needed.Climate finance needs to be both scaled-up and distributed more effectively.To make this happen,all actors have a role

271、to play to ensure funding is deployed to where it can have the most significant impact.This section discusses two main sets of opportunities:1.Climate finance mobilization2.Climate finance tracking and reportingThis section draws on the Landscape data as well as the existing literature to discuss th

272、e role of key actors in the climate finance ecosystem.We should note that this is not a comprehensive strategy to scale climate finance for Africa;that is outside the scope of this report.6.1 CLIMATE FINANCE MOBILIZATIONTable 1:Key steps to mobilize climate finance in AfricaActorsKey stepsDomestic g

273、overnments Align fiscal policies and spending to national decarbonization priorities Build a“whole-of-government”approach for effective implementation of policies and programs Develop policies and regulations to better align the domestic financial sector to climate-positive outcomesDevelopment partn

274、ers Target higher leverage ratios through blended financing structures Support under-funded sectors,technologies,and innovations through increased grants and concessional loans Adapt strategies and financing to current and future vulnerabilities of African economies Employ bolder adaptation and resi

275、lience financing strategiesSub-regional and national DFIs Support local institutions in developing capacity to mainstream climate considerations in their operations and portfolios Collaborate with multilateral institutions or accreditation agencies to provide a conduit for international climate fina

276、nce Develop and deploy additional product offeringsPrivate sector Leverage innovative financing vehicles to better match investment opportunities to risk-return profiles Redirect financing from carbon-intensive projects,technologies,and businesses to climate-friendly projects Assist and coordinate w

277、ith clients,borrowers,and other stakeholders to build a carbon-resilient portfolio Landscape of Climate Finance in Africa311.Domestic governmentsWhile data limitations(see Section 2.1)prevent a comprehensive analysis of climate expenditure by national and local governments,national governments play

278、a vital role in climate action.Some major steps they could take include:Align fiscal policies and spending with national decarbonization priorities.Not all spending can be green,but governments can structure taxes and incentives that favor low-carbon alternatives(OECD,2020b)and ensure long-term bene

279、fits such as job creation and energy independence.Carbon pricing,reforming fossil fuel subsidies,procurement policies,abatement payments,and green budgeting are important tools that national governments can deploy.17Example:Kenyas draft Green Fiscal Incentives Framework Policy 2021 provides fiscal i

280、ncentives,such as tax exemptions,to private actors investing in green projects and programs.Build a whole-of-government approach for effective implementation of policies and programs.Africa is rapidly urbanizing,yet sub-national development is often held back by laws or regulations that limit sub-na

281、tional governments(province,county,city)from expanding their financial or operational capabilities.Facilitating climate investment at a sub-national level ensures that initiatives address local priorities and are implemented.If national governments address trade-offs to empower local governments,it

282、will improve vertical integration by avoiding policy gaps between national action plans and local initiatives and ensure horizontal coordination across local governments.Also,ensuring cross-sectoral synergies by coordinating across ministries is critical given the multi sector impacts of climate inv

283、estments.Kenyas Financing Locally-Led Climate Action Program(FLLoCA)is an example of one approach that aims to build climate finance capacity at a county level.Develop climate finance policies and regulations that spur the domestic financial sector to take action.Institutional investors,microfinance

284、 institutions,private managers,insurers,and asset managers all play important roles in allocating,holding,and channelling liquidity(FSD Africa,2021).Government frameworks,incentives,and regulations will help Africas financial sector to align with global standards and mobilize private capital.Exchang

285、ing experiences and mutually supporting regulatory reforms could further strengthen the policy and regulatory environment for climate-related investment.2.Development partnersDFIs,international governments,and agenciesMultilateral DFIs and bilateral development partners together originated the large

286、st share of climate finance in Africa(71%),prioritising adaptation.However,such finance remained concentrated in a few countries and sectors,while private players largely sat on the sidelines.As such,development partners need to update their capital deployment strategies to:Target higher leverage ra

287、tios through blended financing structures.For every dollar that MDBs invested in climate finance,only USD 0.29 in co-financing came from private sources(WRI,2021b).Risk-mitigation instruments such as guarantees,insurance,and local currency hedgingwhich have the highest mobilization ratios(OECD,2020a

288、)can mobilize private capital.Development partners could use these instruments in mature 17 These are price-based instruments that rewards businesses and citizens for reducing emissions32Landscape of Climate Finance in Africamarkets,like renewable energy,and for adaptation finance,where DFIs have su

289、cceeded in expanding finance but not in mobilizing private investment.Increase grants and concessional support for underfunded sectors and technologies.DFIs direct most of their funding to energy and AFOLU.They need to shift focus from mature technologies like renewables to hard-to-abate sectors lik

290、e industry and infrastructure;sectors where the transition has hardly begun,like natural capital in carbon sinks,biodiversity,and ecosystem preservation,and in nascent areas like the blue economy.Adapt strategies to address current and future vulnerabilities of African economies.African countries ar

291、e currently facing multiple crisesthe fall-out of the Covid-19 pandemic,rising debt,food insecurity,exchange rate vulnerabilities,and climate change.Yet,more than half of the tracked climate finance(55%,USD 16.1 billion)was channelled through debt,exacerbating already heavy debt loads.Guarantees,ins

292、urance,and currency hedging could better address current fiscal realities(OECD,2020a).Stakeholders need to tailor their solutions to local factors like depth of capital markets and implementation capacity.For instance,the Liquidity Sustainability Facility(LSF)established by UNECA in 2021,aims to com

293、press liquidity premiums and improve sovereign access to international bond markets for African countries,drawing on additional Special Drawing Rights(SDRs).3.Multilateral Climate FundsMultilateral Climate Funds(MCFs)have huge opportunity to support significantly greater investment in climate-relate

294、d innovation and resilience.MCFs need to extend capacity-building support,especially for the longer term,in pre-and post-accreditation support(Omari-Motsumi et al.,2019).Out of the 113 GCF-accredited institutions,only 21 are African(see Annex IV),and only four of those are from the private sector.In

295、 addition,adopting a more targeted private sector engagement policy through intermediary models that combine lines of credit with technical assistance for project preparation can help mobilize private finance and build resilience(GCF,2021).4.Sub-regional and national DFIsSub-regional and national DF

296、Is,including sovereign wealth funds,are well-positioned to play a catalytic role in regional integration.They are well embedded in local financial systems,working as a conduit between multiple actors,financing infrastructure projects,and promoting cross-border trade.However,they are often too small

297、to have significant impact.Climate-unfriendly political priorities can also influence them negatively.In order to increase their impact,the following steps could be taken:Act as a conduit for mobilizing international climate finance.They should amplify their impact by expanding from a traditional fi

298、nancier role to a mobilizer of international climate finance(OECD et al,2018).To do this,they could seek GCF accreditation or raise green bonds with support from multilateral funds and DFIs.National DFIs can collaborate with multilateral institutions to create blended facilities that channel private

299、 actors(including institutional investors)into climate investments that are substantially de-risked and offer guaranteed returns.Help build capacity in local financial institutions.They could embed climate-friendly expertise(IDB,2021),processes,and frameworks not only in their own operations and Lan

300、dscape of Climate Finance in Africa33portfolios,but also transfer this knowledge to local financial institutions.This will help local institutions develop their financial capacity(CCFLA,2020).Expand product offerings with climate-specific goals.They could develop and deploy additional product offeri

301、ngs rooted in local contexts to address country and sub-region-specific barriers.Setting time-bound climate finance targets,like doubling climate finance by 2025,or ensuring a certain percentage of their overall portfolio goes into climate projects,will be critical for raising ambition and effective

302、ness.5.Private actorsThe private sector has the potential to mobilize significant climate finance by following a three-pronged strategy:innovating,aligning,and collaborating.Use innovative financing vehicles,like green bond issuances and infrastructure investment funds,to meet liquidity and credit r

303、equirements of investors with varying risk appetites.Green fintech innovation,like M-KOPA,OWATTS,and InfiBranches,can help integrate climate action with development needs.M-KOPA,for instance,addresses energy access by providing solar home systems that consumers can pay for in a staggered manner via

304、their mobile phones.Align more finance with climate opportunities and away from carbon-intensive investments.For instance,insurers could reduce underwriting and investing in fossil fuel projects and companies.Commercial banksthe key financiers of fossil fuel companies and projects in Africaalong wit

305、h other private actors,need to redirect support towards decarbonization efforts like the Just Energy Transition Partnership(JETP)model in South Africa.Expand coordination and collaboration.Domestic and international banks could advise their clients on how to build climate-resilient portfolios.Insure

306、rs,asset owners,and managers could empower and engage their clients to pursue greener alternatives(BCG,2020).They could promote carbon pricing;offer additional analytical tools,frameworks,and products;and integrate Just transition,resilience,and equity dimensions into investment and procurement stra

307、tegies.International networks like GFANZ could support pipeline development and back transaction accelerators,and engage actively with domestic institutions to source and bundle viable,well-diligenced transactions.6.2 TRACKING AND REPORTINGData is crucial for converting NDCs into climate finance str

308、ategies,building effective solutions,and informing investors.Yet pervasive data gaps exist across actors and sectors.This section provides a non-exhaustive list of key improvement areas to ensure climate finance data is comprehensive,periodic,and timely.34Landscape of Climate Finance in AfricaTable

309、2:Key steps to better track climate finance in AfricaActorsKey stepsDomestic governments Institute a centralized approach to standardize and track climate-tagged data Implement equity-responsive budget tagging in parallel to climate relevant tagging Strengthen adaptation risk analysisDFIs Provide gr

310、eater transparency and more detailed reporting on impact outcomesPrivate sector Leverage existing frameworks and standards(SASB,TCFD,GRI,etc.)to efficiently implement climate data tagging Assess and report climate risk,and impact of own as well as client portfolios Set and report publicly against cl

311、imate investment goals1.Domestic government dataDomestic governments should institute a centralized agency to standardize and track climate-tagged data.Governance of climate finance is currently highly fragmented and dispersed,which makes good quality data on climate finance flows at the regional,na

312、tional,and sub-national levels rare.Climate reporting tools such as CPEIR,CBT,or PEFA Climatewhich have the potential to standardize more government dataare not widely used.18 Governments should consider housing a central climate data agency within an institution with a strong climate mandate and bu

313、dgeting power(e.g.,Ministry of Finance or Environment).For example,in Ethiopia,the Climate Resilient Green Economy(CRGE)facility within the Ministry of Finance drives climate finance mobilization and leads climate budget tagging integration.To do this,governments need to build institutional and tech

314、nical capacity at all levels in order to refine and promote definitions,methodologies,and processes.Even though a single sectoral ministry may allocate and report budget expenditures,climate-related projects are often cross-sectoral in nature and require coordination across ministries.Coordination a

315、nd training can help ensure climate reporting tools are flexible to allow for thematic and cross-sectoral reporting.Governments should ensure climate budget tagging reflects equity concerns.Investors and governments are showing greater interest in equity co-benefits.Yet needs and flows relating to g

316、ender and indigenous and vulnerable groups remain opaque.For instance,less than 10%of need activities reported in NDCs of African countries referred to gender or vulnerable communities.Combining equity-responsive budget tagging and climate budget tagging can improve reporting efficiency and ensure b

317、etter synergies.Only Gambia and South Africa have launched pilots to this end.18 PEFA climate assesses if a countrys PFM system is ready to support and foster the implementation of government climate change policies.This includes the planning and design of budgetary policies considering climate,the

318、budget allocations needed to implement them,the tracking of these allocations to ensure that policies are implemented as intended,and the monitoring and evaluation of the efficiency and effectiveness of these policies and investments.Landscape of Climate Finance in Africa35Governments should strengt

319、hen adaptation risk analysis.National governments should boost their capacity to analyze adaptation risk in both upstream(debt sustainability analysis,macroeconomic modelling,etc.)and downstream activities(project design,implementation,etc.).They can do this by incorporating climate information and

320、analytics that provide localized climate risk and vulnerability data.2.DFI dataDFIs should improve transparency and reporting on impact outcomes.Recent efforts by the OECD have resulted in improved reporting on how much public interventions mobilize private finance.However,varying approaches and poo

321、r project-level reporting stymie efforts to integrate this data in overall estimates,and avoid double counting.DFIs should provide more granular project-level information on mitigation and adaptation outcomes.Standardizing approaches would not only streamline reporting and analysis efforts,it would

322、also help identify opportunities where investment has the greatest impact.3.Private sector dataPrivate sector data on climate investment in Africa remains limited,inhibiting efforts to improve market conditions and attract investment.The private sector should standardize reporting on disclosures and

323、 frameworks of its climate investments.Existing frameworks and standards like the Sustainability Accounting Standards Board(SASB),Task Force on Climate-related Financial Disclosures(TCFD),Global Reporting Initiative(GRI),and international taxonomies such as the EU Sustainable Finance Taxonomy.offer

324、good starting points for private actors to report on climate finance data in a way that is aligned with international efforts.36Landscape of Climate Finance in Africa7.WAY FORWARD The African continents rapid urbanization,underdeveloped infrastructure,and energy transition offers investment opportun

325、ities that are not currently being met.Every actor in the financial systemfrom governments to DFIs to the private sectorcan tap these opportunities by re-evaluating their roles,mandates,and incentives.In fact,there is a clear imperative to act and investinvestment opportunities are substantial,and t

326、he social,economic,and environmental benefits which could be realized,are significantly greater.However,climate finance in Africa remains anemic.Needs are not being met at each stage of the investment cycle.Climate finance has to increase by at least nine times in Africa to meet its climate targets.

327、This study proposes the following six immediate priorities to address the financing gap:Adapt strategies to address current and future country realities Boldness to fund hard-to-abate sectors and less mature markets Catalyze private finance,including domestic capital Data tracking and disclosures to

328、 inform financing strategies Enhance the enabling environment through capacity building Facilitate climate investment at a sub-national levelThese six areas offer large potential for reaching the levels of climate finance Africa needs in order to maximize its investment opportunities and build a mor

329、e resilient future.Landscape of Climate Finance in Africa378.ANNEXESANNEX I:VARIOUS NATIONAL TRACKING INITIATIVES DIFFERING IN THEIR SCOPE,TIMELINES,AND APPROACHESCountryClimate Public Expenditures and Institutional Review(CPEIR)Climate Budget Tagging(CBT)Climate Finance LandscapeClimate Public Expe

330、nditure and Financial Accountability(PEFA)Domestic climate finance in 2019/2020,USD million/%of GDPBenin2012 Cote dIvoire2017*Cabo VerdePlanningPlanningEswatini2021In design 0.43/0.01%*Ethiopia2014aIn design PlanningGhana2015/2021in action 454.5/0.31%Kenya2016in action2021Malawi2019 Mauritius2016d/2

331、018dPilot 7.24/0.03%Morocco2014 Mozambique2012d/2016b Namibia In design NigerIn process Nigeria Pilot 27.41/0.003%*Rwanda2013 9.59/0.05%Seychelles2018c South Africa Pilot2020Tanzania2013 Uganda20132018 Notes:a-partial;b-pending;c-unsuccessful due to consultant issues in 2018/2019;d-environment expen

332、diture review;*The study was for the AFOLU sectorSource:Authors compilation on a best effort basis;World Bank(2020).CABRI(2021),UNDP(2019),*Onyimadu&Uche(2021),Government of Eswatini(2021)38Landscape of Climate Finance in AfricaANNEX II:ROLE OF CLIMATE FINANCE IN DEEPENING DOMESTIC FINANCIAL MARKETS

333、Climate finance can be a catalyst in developing local financial markets in African economies.Financial markets in African countries often remain small and undeveloped,characterized by small market capitalizations,few listed companies,and less liquidity with high transaction cost compared with other emerging countries(UNECA,2021).Between 2014 and 2019,the Initial Public Offerings(IPO)in Africa was