NAIROBI, Kenya, Mar 19 – Think-tank European House-Ambrosetti has revealed that the African continent faces a funding shortfall to address climate change despite being the least carbon emitter globally, urging increased financing for the global south.
Kenya, for instance, only attracted 28 percent of mapped capital flows for a total of $7 billion, with a focus on agriculture and urban development.
East Africa’s climate action plans heavily rely on foreign support, with Multilateral Development Banks (MDBs) and Development Finance Institutions (DFIs) playing a crucial role in attracting foreign capital to Kenya, Ethiopia, and Tanzania.
According to Ambrosetti, the continent faces a significant funding gap, with current climate finance flows to Africa covering only 11 percent ($29.5 billion) of what is needed annually to implement climate action plans (NDCs).
It was noted that private funding in Africa is limited, primarily in developed countries, and adaptation efforts are neglected due to perceived risks.
Despite aligning with the Paris Agreement and the African Union’s climate change strategy, financial gaps and a lack of coordinated governance hinder implementation.
The organization’s Chief of Climate Change Affairs, Adele Fusi, noted that unstable governments are some of the critical aspects that need to be addressed within the continent, as investors find it hard to roll out funding in environments with weak governance structures.
“Risk mitigation would allow for more convenient aspects to track climate financing. There is a need to develop standards of what is sustainable and what is not,” said Fusi.
The European House recommended a collaborative approach to Africa’s climate finance gap, involving governments, MDBs, and the private sector.
Strengthening regulations and policies to attract investments and ensuring transparency are crucial for Africa’s climate resilience.
