Africa’s climate-finance challenge is not only about raising more capital. It is also about getting enough projects to the point where available capital can actually be deployed.
That project-preparation gap is moving into focus as teams from East and Southern Africa advance selected climate initiatives under the African Development Fund’s Climate Action Window, following regional inception and preparation workshops in Nairobi and Pretoria.
According to the African Development Bank, the work is intended to facilitate the approval, financing and implementation of selected climate projects. The technical-assistance portfolios in Southern and Eastern Africa are expected to help mobilise about $225 million and $407 million in climate financing respectively.
The gap between climate priorities and financeable projects
African countries have identified extensive needs in climate adaptation, resilient infrastructure, agriculture, water, energy and disaster preparedness. But identifying a need is different from preparing an investment that financiers can assess and fund.
Projects typically need technical studies, credible budgets, implementation arrangements, environmental and social safeguards, procurement planning and evidence that institutions can manage the investment. Weaknesses at those stages can delay financing even where development institutions have capital available.
The African Development Fund describes project preparation as a mechanism for developing high-quality, bankable operations that are ready for financing and implementation. For climate projects in lower-income and fragile countries, that preparatory work can be especially important because institutional capacity and access to specialist expertise may be constrained.
What the Climate Action Window is doing
The Climate Action Window was established under the 16th replenishment of the African Development Fund, the concessional financing arm of the African Development Bank Group. It is designed to accelerate climate action in the Fund’s 37 eligible countries, which include some of the continent’s most climate-vulnerable economies.
Its resources support adaptation, mitigation and technical assistance, including project preparation, institutional capacity, climate-policy development and green-finance initiatives.
At the Nairobi workshop held from 17 to 19 August, 27 project teams participated, including national ministries and agencies as well as development and research organisations. A second workshop in Pretoria from 31 August to 1 September brought together teams from institutions in Zambia, Zimbabwe, Malawi, Lesotho, Madagascar and Mozambique, alongside other partners.
Preparation is not the same as financing
The distinction matters. The projects being supported through the preparation process should not be treated as though all of them have already received final financing approval or reached financial close. The current work is intended to move selected initiatives towards those stages.
That makes project preparation a less visible but important part of the climate-finance system. If countries cannot translate climate strategies into investment-ready projects, headline commitments from multilateral lenders, climate funds and private investors may remain difficult to deploy.
For African governments and development institutions, the financing challenge therefore has two sides: increasing the pool of climate capital and building a sufficiently strong pipeline of projects capable of absorbing it.
References
- African Development Bank: Climate Action Window advances East and Southern Africa projects toward financing
- African Development Fund: Climate Action Window
- African Development Fund: Resource Allocation Framework and Project Preparation Facility
Discover more from Towncrier Africa
Subscribe to get the latest posts sent to your email.
