Africa will convene its second Africa Climate Summit (ACS II) in September with a clear mandate: accelerate global climate solutions while mobilizing the financing that Africa needs for resilience and green growth. The inaugural summit in 2023 marked a turning point, crystallized in the African Leaders Nairobi Declaration on Climate Change and Call to Action. That declaration called for a new global financial deal and fit-for-purpose instruments at scale, tailored to Africa’s growth trajectory. ACS II builds on that ambition, seeking to further reshape Africa’s role in the climate-finance landscape—amid escalating geopolitical tensions, tighter global financial conditions, and mounting sovereign debt pressures across the continent. The central insight is simple: without fair finance, even the strongest policy ambition will underdeliver.
A Shifting Finance Landscape
There has been momentum. At COP28, countries agreed to operationalize the Loss and Damage Fund. Negotiations at COP29 advanced the New Collective Quantified Goal (NCQG) on climate finance—moving the world closer to a larger, clearer target and better tracking. Looking ahead, COP30 is expected to pivot toward delivery, with updated national climate plans (NDCs) generating tangible, investable pipelines.
Beyond the COP process, the 4th International Conference on Financing for Development adopted the Compromiso de Sevilla, reaffirming commitments to sustainable development finance—including climate—and setting out seven action areas. These range from mobilizing domestic and international capital and improving debt sustainability to reforming the international financial architecture and closing gaps in access to climate technologies and innovation. With the 80th UN General Assembly approaching, there is a fresh opportunity to marshal political will behind this framework and turn commitments into capital flows—particularly for climate resilience.
Africa’s Climate Reality—and the Adaptation Gap
Africa contributes less than 4% of global greenhouse gas emissions, yet bears a disproportionate share of climate impacts. In 2024 alone, extreme weather—floods, droughts, and lethal heat—affected more than 110 million people on the continent. The IPCC warns that global GDP could shrink by up to 12% by 2050 due to climate impacts. For Africa, the bill is already arriving: the continent is losing an estimated $7–15 billion annually, a figure that could reach $50 billion by 2050 if action stalls.
Adaptation is therefore not optional—it is a development imperative. But the financing is nowhere near adequate. At the current pace, only about $195 billion will be mobilized for adaptation in Africa by 2035, far short of the more than $1.6 trillion required. The result is a widening “resilience gap” that leaves communities exposed, erodes development gains, and raises future fiscal risks as disasters force expensive rebuilds.
Debt, Risk, and the Cost of Capital
Fair finance starts with fixing the cost of capital. Many African sovereigns pay a steep risk premium, driven in part by perceptions embedded in sovereign credit ratings. High borrowing costs squeeze budgets, crowding out essential social and climate investments.
Three shifts are urgent:
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Improve engagement with ratings and regulation. With partners such as the UN Economic Commission for Africa (ECA), the African Peer Review Mechanism, and UNDP Africa, countries are building capacity to engage rating agencies and strengthen the legal and regulatory foundations that underpin sovereign credit.
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Diversify rating perspectives. Questions about the current international ratings ecosystem have spurred new regional approaches, including plans for an African Credit Rating Agency that can complement global methodologies with deeper contextual insight.
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Manage currency and commodity risk. Roughly 40% of African public debt is held by non-residents, leaving budgets exposed to exchange-rate swings. Limited diversification and commodity dependence amplify volatility. Wider use of hedging instruments—including in climate finance—can help stabilize debt service and protect climate spending.
AAAP: A Scalable Model for Resilience Finance
Africa is also pioneering solutions. The Africa Adaptation Acceleration Program (AAAP)—a partnership between the Global Center on Adaptation (GCA) and the African Development Bank—mainstreams adaptation across development finance. With a leveraging ratio of 1:100, the AAAP helps ensure multilateral development bank investments are climate-resilient, reducing the need for expensive retrofits after disasters.
Toward a $25 billion target by end-2025, GCA has already helped shape more than $18 billionin investments that are strengthening resilience for over 80 million people across forty countries and supporting over 700,000jobs. Ministers from Zambia and Ghana have highlighted how AAAP is catalyzing digital climate advisory services, nature-based solutions, and community-driven design—practical, investable pathways that turn adaptation from a cost center into an engine of inclusive growth. Recognition has followed: at UNGA79, AAAP won “Best Investable NDC Adaptation Investment Initiative of the Year” at the 2024 African NDC Investment Awards. At the recently held Eighth AAAP Partnership Forum, Zambia’s Minister for Agriculture lauded the AAAP’s role in bringing digital climate advisory services into the World Bank’s USD300million Zambia Growth Opportunities Program. Its Ministry for Environment has praised the AAAP as a viable alternative to traditional adaptation financing, which may fall short of closing the $387 billion annual adaptation gap projected for 2024. At the Seventh AAAP Partnership Forum, Ghana’s Minister for Aquaculture and Fisheries lauded the AAAP as a tool to utilise nature-based solutions for addressing climate impacts, thereby providing economic development. AAAP’s underlying mantra of collabrating with youth to integrate community-driven insights into investment design was further lauded.
Now, AAAP 2.0 aims to double impact by working more directly with national development and commercial banks, embedding resilience criteria in lending practices. Its latest initiative, the Africa Business Adaptation Platform, will expand to convene private investors, corporates, and philanthropies—creating a new market for adaptation finance.
Leveraging Natural Wealth—Fairly
Africa’s natural capital underpins global climate stability. Its forests deliver vital carbon and biodiversity services; its minerals are essential to the net-zero transition. Fair compensation for these services—and fair participation in value chains—must be part of any credible climate-finance compact.
Here, the Economic Commission for Africa (ECA) is supporting practical innovations. In the Democratic Republic of the Congo, it is assisting with a debt-for-nature swap strategy that could channel resources into the battery and electric-vehicle value chain—linking conservation finance to green industrialization. More broadly, advancing local-currency bond markets and Islamic finance can help deepen domestic capital markets, reduce currency risk, and crowd in long-term investors for green infrastructure and adaptation.
The Road to COP30: Mainstream Adaptation in All Finance
By COP30, success should be measured not only by pledges but by project pipelines, financial structures, and policy reforms that reduce risk and accelerate disbursement. Three priorities can unlock progress:
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Price risk fairly. Improve sovereign risk assessments, expand hedging and guarantee use, and diversify rating perspectives to lower borrowing costs and free fiscal space for climate investment.
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Scale what works. Replicate AAAP-style mainstreaming through national development banks and commercial lenders, and grow blended-finance facilities that crowd in private capital for adaptation.
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Value natural capital.
Use debt-for-nature swaps, results-based finance, and fair-value mineral agreements to fund resilience while building competitive green industries.
Africa is not asking for charity; it is asking for fair finance—capital that reflects real risk, rewards resilience, and recognizes the continent’s indispensable role in global climate stability. With the policy frameworks in place and proven models ready to scale, ACS II and the run-up to COP30 offer a window to turn ambition into bankable action. If the global community seizes it, Africa can lead a resilient, inclusive, and sustainable future—one investable project, one local market, and one fair deal at a time.