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Green Finance

Africa must green its financial sector to finance a green revolution.

As countries begin to recover from the Coronavirus pandemic, we must take the historic opportunity to tackle climate change at the same time – to build back better, and greener.
Alok Sharma, UN Climate Change Conference of the Parties (COP26) President.

Africa, one of the most climate-vulnerable regions of the world, currently captures just three per cent of sustainable investment flows, showing the challenge for low-income developing countries to capitalise on the green finance boom.

Without the foundational skills, data, regulatory frameworks and policies to support green finance, developing nations will struggle to offer adequate scale, quality and returns for private investors. At the same time, the greening of the global financial system must account for the unique challenges and opportunities in regions outside of Europe and North America or risk entrenching existing barriers to funding.

Our vision & objective

FSD Africa’s vision is that Africa can unlock new pathways to prosperity and resilience while helping the world realise the promise of the Paris Agreement and tackle the dual crises of climate change and biodiversity loss.

We believe that Africa can leapfrog the environmentally damaging development models of the past, by instead establishing a resilient low-carbon economy and enabling its rich natural capital to thrive. Effective markets empower every dollar of green finance invested in Africa to generate more economic growth, greater community impact and maximum returns for our planet. These markets will attract private green finance to amplify public funds while ensuring capital is directed to the areas where it can generate the greatest outcomes.

This outcome would be a win-win: providing jobs in fast-growing sectors and creating new investment opportunities, while also shielding communities from the worst impacts of the climate crisis and expanding access to life-enhancing goods and services.

Making it happen

At FSD Africa we don’t just provide green finance—we strengthen, diversify and expand the pathways for sustainable investment in Africa, creating the conditions for green finance to flow in greater quantities and with more impact – not just in the short term, but for decades to come in order to instil lasting sustainable change in Africa’s financial markets.

Through the provision of training and technical assistance, we are creating an enabling environment for the issuance of sovereign and corporate green bonds. We also provide early-stage capital to support innovative transactions in sectors of the green economy that have so far failed to attract private capital.

And we are working with partners to develop innovative approaches to managing the impact of climate change, for instance, the increased risk of flooding in urban areas.

Critical to the way we work is how we use our global presence across public and private sectors to advocate for the business practices and government policies needed to accelerate action towards and realise the promise of the Paris Agreement.

As our new report, Financing Africa’s Urban Opportunity shows, dealing with the challenge of climate change and abandoning the old paradigm of development in Africa will require strong leadership and collaboration between government, civil society and the private sector. But the payback will be a more sustainable and liveable future for its citizens. By using our role as a convener and by supporting vital research into this area we can help develop innovative financial solutions that are appropriate to the African context whilst also drawing on international best practices.

Watch more on Green Finance


Green Finance at AFSIC – Investing in Africa 2021

 
Affordable Housing: Investing in greener and affordable housing in Africa.