The Landscape of Climate Finance 2024 Report, conducted by the Climate Policy Initiative (CPI) and commissioned by FSD Africa, reveals significant trends in climate finance across the continent. Notably, climate finance flows in Africa grew by 48%, reaching US$44 billion in 2021/2022, up from US$30 billion in 2019/2020. However, this amount still represents only a quarter of the funding necessary to implement Africa’s Nationally Determined Contributions (NDCs) and achieve its climate goals for 2030.
Key Findings of the Report:
- Domestic Finance: Only 10% of Africa’s total climate finance, equivalent to USD 4.2 billion, originated from domestic actors. Of this, a substantial 75% came from private finance. Given that private domestic assets under management (AUM) were estimated at USD 2.4 trillion in 2020, there is significant potential for growth in this area.
- Regional Disparities: Climate finance distribution is highly uneven across the continent. The top ten countries account for 50% of total climate finance, while the bottom thirty countries receive just 10%.
- Investment Trends: Despite climate investments in Africa reaching an all-time high, public finance remains the predominant source of funding. Private finance constitutes only 18% of Africa’s total climate flows, which is markedly lower than in other global regions. This discrepancy is particularly evident in private finance flows, where just ten countries received 76% of the total private climate finance, leaving the remaining countries with only 16%.
- Concentration of Funding: Half of all private climate finance is directed towards South Africa, Egypt, and Nigeria.
- Impact of Debt: Countries experiencing debt distress receive significant grants; however, debt still constitutes 36%-43% of their climate finance.