Accelerating Private Sector Climate Finance in Africa

Considerable volumes of finance, from both the private and the public sector, are necessary to meet the anticipated mitigation and adaptation needs of Africa. In this policy briefing we highlight the importance of a supportive and enabling regulatory and policy environment in attracting enhanced private sector climate finance. While this is a priority relevant to private sector investment generally, it has particular resonance in relation to climate finance, where predictability, acceptable risk profiles and adequate financial returns are crucial for large-scale adaptation and mitigation investments. These can be supported by Nationally Determined Contribution (NDC) implementation plans and related engagement strategies for targeted investors. Increased access to credit enhancement mechanisms by providers of concessional finance will further accelerate private sector investment. Borrowers can make climate projects more attractive by bringing their projects to the bankability stage, by identifying how their project will achieve the Sustainable Development Goals (SDGs), and through impact reporting. Capacity building, support and finance to borrowers to ready their projects in this way are imperative. We identify a number of measures that may help to bolster adaptation private finance, acknowledging that the nature of these projects will typically require some level of catalytic public finance support.