United Nations Development Programme

AFRICA ­GREEN ­BUSINESS

AND F
­ INANCING REPORT
Copyright @ United Nations Development Programme 2024

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 United Nations Development Programme

AFRICA ­GREEN ­BUSINESS

AND F
­ INANCING REPORT
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024

TABLE OF CONTENTS
Acronyms ........................................................................................................................................... vi
Foreword ........................................................................................................................................... x
Executive summary.......................................................................................................................... xi

1. Introduction............................................................................................................................... 1
1.1 Background and context........................................................................................................... 1
1.2 Report objectives........................................................................................................................ 2
1.3 Green business and finance – Definition of key terms................................................... 2
1.4 Importance of promoting green business and financing in Africa.............................. 3

2. Regional context...................................................................................................................... 7
2.1 Economic backdrop.................................................................................................................... 7
2.2 Macro development trends...................................................................................................... 9
2.3 Key environmental challenges................................................................................................ 11
2.4 Summary of regional context................................................................................................... 15

3. Overview of the current state of green business in Africa.............................................. 17

3.1 Introduction.................................................................................................................................... 17
3.2 Renewable energy, water and related infrastructure...................................................... 17
3.3 Agriculture and food production............................................................................................ 25
3.4 Nature-based solutions............................................................................................................. 28
3.5 Eco-tourism.................................................................................................................................... 30
3.6 Technology and next-generation solutions........................................................................ 32
3.7 Summary......................................................................................................................................... 35

4. Market analysis – Financing green business in Africa...................................................... 37

4.1 Current scale of financing green business in Africa........................................................ 37
4.2 Overview of financing mechanisms for green business in Africa
– Examples of good practices................................................................................................ 39
4.3 Key financial stakeholders – Market overview.................................................................. 44

5. Policy and regulatory environment...................................................................................... 53

5.1 Evaluation of existing policies and regulations related to green business
and financing in Africa................................................................................................................ 53
5.2 Establishing and implementing green policy and regulation........................................ 54
5.3 Case study of enabling green business: Morocco........................................................... 58
5.4 International agreements and commitments that have a role
in shaping Africa’s green economy....................................................................................... 61

6. Barriers to scale............................................................................................................................ 65

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7. Case studies.............................................................................................................................. 69
7.1 The Noor Ouarzazate Solar Complex................................................................................... 69
7.2 Sistema.bio.................................................................................................................................... 71
7.3 OX Delivers.................................................................................................................................... 73
7.4 Ecotourism in Africa: A few examples................................................................................... 75
7.5 Kigali Bulk Water Supply Project............................................................................................ 77
7.6 Hongera Carbon Project........................................................................................................... 79
7.7 Agricultural Technology (Agritech): a few examples........................................................ 81
7.8 M-Kopa............................................................................................................................................ 83

8. Recommendations and next steps....................................................................................... 87

8.1 Strategic recommendations..................................................................................................... 87
8.2 Next steps...................................................................................................................................... 90

Acknowledgements......................................................................................................................... 92

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 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024

ACRONYMS
ACCF Africa Climate Change Fund
ACMI Africa Carbon Markets Initiative
AfCFTA Africa Continental Free Trade Area
AFD Agence Française de Développement
AfDB African Development Bank
AGBFI Africa Green Business & Finance Initiative
AGHA Africa Green Hydrogen Alliance
AI Artificial Intelligence
AREI Africa Renewable Energy Initiative
ASEAN Association of Southeast Asian Nations
ASFH Africa Sustainable Finance Hub
AVF Automated variable filtration
BII British International Investment
BMZ Federal Ministry for Economic Cooperation and Development
BOT Build-operate-transfer
BRT Bus rapid transit
CBAM Carbon Border Adjustment Mechanism
CCFAH The Commonwealth Climate Finance Access Hub
CEO Chief executive officer
CFF Climate Finance Facility
CIDA Canadian International Development Agency
CIF Climate Investment Fund
CO Country Office (UNDP)
COP Conference of the Parties
CO2 Carbon Dioxide
CPI Climate Policy Institute
CRGE Climate Resilient Green Economy
CSP Concentrated solar power
DBSA Development Bank of South Africa
DFC The United States International Development Finance Corporation
DFI Development finance institution
DRC Democratic Republic of Congo
EAIF Emerging Africa Infrastructure Fund
EDPRS Economic Development and Poverty Reduction
EIB European Investment Bank
EPC Energy performance contract
ESG Environment, social, governance
ETS Emissions Trading Scheme
EU European Union
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EUR Euro (currency)

EV Electric Vehicle
EWSA Energy Water and Sanitation Authority
FAO Food & Agriculture Organisation
FLLoCA Financing of Locally Led Climate Action (Kenya)
GCF Green Climate Fund
GDP Gross domestic product
GEAPP Global Energy Alliance for People and Planet
GEF Global Environment Facility
GEM Global Emerging Markets (Risk Database)
GGGI Global Green Growth Institute
GHG Greenhouse Gas
GIS Geographic information system
GNI Gross national income
GW Gigawatts
IADB Inter-American Development Bank
IBFCCA Inclusive Budgeting and Financing for Climate Change in Africa
ICMA International Capital Markets Agency
IEA International Energy Agency
IFAD International Fund for Agricultural Development
IFC International Finance Corporation
IIX Impact Investment Exchange
IKI International Climate Initiative
ILO International Labor Organisation
IPBES Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem
Services
IPP Independent power production
ISS Institute for Security Studies
IsDB Islamic Development Bank
IoT Internet of things
IUCN International Union for the Conservation of Nature
KPI Key performance indicator
KWL Kigali Water Limited
MASEN Moroccan Agency for Sustainable Development
MCF Multilateral climate funds
MDB Multilateral development bank
MENA Middle East and North Africa
MFI Monetary finance institution
MPA Marine protected area
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MW Megawatt
NAP National Action Plan
NBS Nature-based solutions
NDC Nationally Determined Contributions
NORAD Norwegian Agency for Development Cooperation
ODA Overseas development assistance
OECD Organisation for Economic Cooperation & Development
ONEE National Office of Electricity and Drinking Water
OTC Over-the-counter
PAYG Pay-as-you-go
PCG Partial credit guarantee
PPIAF Public-Private Infrastructure Advisory Facility
PPP Public-private partnership
PRG Political risk guarantee
PV Photovoltaic
RBA Regional Bureau for Africa
RBF Results-Based Financing Program
REC Renewable energy certificate
REDD+ Reducing Emissions from Deforestation and Forest Degradation
REFIT Renewable Energy Feed-In Tariffs
REG Rwanda Energy Group
REIT Real estate investment trust
RSCA Regional Service Centre for Africa
SANParks South African National Parks
SDG Sustainable Development Goal
SEforALL Sustainable Energy for All
SICS Solar Incremental Cost Support
SIDA Swedish International Development Cooperation Agency
SLB Sustainability-linked bond
SLL Sustainability-linked loan
SNDD Stratégie Nationale pour le Développement Durable (Morocco)
SPV Special purpose vehicle
SWF Sovereign wealth fund
TAF Technical assistance facility
UK United Kingdom
UN United Nations
UNCTAD United Nations Conference on Trade & Development
UNDESA United Nations Department of Economic & Social Affairs
UNDP United Nations Development Programme
UNECA United Nations Economic Commission for Africa
UNEP United Nations Environment Programme
UNFCCC United Nations Framework Convention on Climate Change
USAID United States Agency for International Development
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USD United States Dollar (currency)

USDA United States Department of Agriculture
USSD Unstructured Supplementary Service Data
V20 Vulnerable 20
VC Venture capital
VCM Voluntary Carbon Markets
VCU Verified Carbon Units
VGF Viability gap funding
WASAC Water & Sanitation Corporation
WB World Bank
WLB Women’s Livelihood Bond
WRI World Resources Institute

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FOREWORD
In an era where Africa grapples with escalating inequalities, unemployment and the harsh realities
of climate change, our mandate is not only to respond to these challenges, but also to transform
them into opportunities for sustainable and resilient growth and development. This publication
serves as a crucial guidepost in that transformative journey.

Africa stands uniquely poised to redefine the landscape of green business. Endowed with vast
natural resources and a young, dynamic population, the continent holds the keys to a green
revolution that could forge paths to employment, dignity and economic resilience. As we navigate
these areas of potential, we are reminded of our urgent duty to harness our resources wisely,
fostering not only wealth but also worth for African families.

The insights drawn from across the continent illuminate the innovative strides being made in
key sectors like renewable energy and sustainable agriculture. These sectors offer a glimpse
of a future where Africa not only meets its own needs, but emerges as a global leader in green
practices. Renewable energy, for instance, presents an opportunity not just for reducing carbon
footprints, but also for propelling a green industrialization process that could redefine economic
landscapes. In agriculture, embracing climate-smart practices could revolutionize food security
and create enduring livelihoods for millions.

However, the path is fraught with challenges. Climate change continues to amplify existing
vulnerabilities, disrupting ecosystems and communities. The continent’s biodiversity, a cornerstone
of its environmental and economic health, faces threats from unsustainable practices and urban
expansion. It is imperative that our actions are bold and decisive, integrating green business
principles deeply and broadly into the fabric of African economies.

The role of green financing is indispensable in this context. Leveraging both private and public
capital is essential for scaling up green initiatives that can drive this new economic frontier. The
African Continental Free Trade Area stands as a testament to the kind of regional cooperation
that could catalyse the green market, making the dream of a sustainable Africa a tangible reality.

As we forge ahead, the narratives of businesses and communities adapting to and thriving in
this green economy will serve as beacons for others to follow. Through these shared stories and
documented successes, we can build a robust framework for a sustainable and prosperous future.

In rallying together — governments, businesses, and civil society

— we embrace a collective vision where the wealth of Africa is
measured not just in GDP, but in the health and sustainability
of its communities and ecosystems. Beyond mapping out
possibilities, this report calls us to action, to fulfil our shared
responsibilities and ensure a thriving, green future for all
Africans.

Maxwell Gomera
Resident Representative, UNDP South Africa
and Director, Africa Sustainable Finance Hub

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 E xecutive summary

EXECUTIVE SUMMARY
Africa is well positioned to be a global leader in climate action and green business. The
region’s unique demographics provide a youthful and growing labour force. Its vast natural
resources are critical to enabling the net zero transition globally. And the continent has huge and
largely untapped renewable energy generation potential. Proper and timely exploitation of these
competitive advantages should be capitalized on for Africa to become the engine that drives
forward the green industrial revolution across the globe.

Such a vision is made all the more urgent by Africa’s vulnerability and
exposure to the worst impacts of climate change. Despite accounting for
just four percent of global emissions1 , the continent is home to 30 of the
world’s most vulnerable countries in terms of climate adaptation capacity
and ecosystem damage, and biodiversity loss is costing billions of dollars
in annual losses. It is also clear that public capital flows alone will not be
sufficient to address the scale of the challenge.

There is a strong need for concerted action, undertaken at scale, to address the climate and
biodiversity crisis in Africa. However, there is also an acknowledgement that this must be achieved
in ways that simultaneously stimulate economic growth and boost development outcomes.
These two imperatives represent a vast challenge, but also a huge opportunity for innovative
private-sector solutions to drive the growth of green business and financing across the region.

It is against this backdrop that the United Nations Development Programme (UNDP) decided to
pursue the Africa Green Business and Financing Initiative (AGBFI), which will identify ways and
means to support private sector engagement in green business and finance that can drive a
sustainable and impactful change in the sector. This report, which forms a core initial component
of AGBFI, offers an overview of the current state of green business and financing across Africa.
It provides specific references to the wide range of activities, projects, and private companies
that are driving innovation and growth in this space. Given the geographic scale of the continent
and the wide range of activities within the broad sphere of green business, this report is non-
exhaustive in the scope of what is included. Instead, it aims to showcase examples of activity and
to identify the type of strategic interventions that can further catalyse green business innovation
and activity.

The overarching goal of this report, and AGBFI, is to stimulate on-the-ground actions in green
business and financing that promote real and meaningful change. The findings of this report
and the recommendations contained herein will feed into the next stage of the initiative, which
is the creation of Country Action Roadmaps for three participating countries: Angola, Malawi and
Togo. These important and practically oriented documents will be the result of close collaboration
between respective national governments, private sector and development institutions. The
roadmaps will be eminently practical, providing concrete steps and plans to be implemented by
the key actors involved in each participating country.

1 United Nations Framework Convention on Climate Change (UNFCCC), 2023, ‘Africa Climate Week 2023: Charting a Fresh
Course for Climate Action’ (link). xi
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There is a clear need for green financing to capitalize on the vast opportunities
that are available across the Africa region. While the needs at individual
country levels vary widely, research suggests that in aggregate Africa
needs approximately US$250 billion annually to implement its Nationally
Determined Contributions (NDCs) and achieve its climate objectives by
2030. Yet, the volume of capital flowing into climate finance is only 10 percent
of that requirement 2 , with private capital making up only a small portion.
Although a wide range of mechanisms, instruments, tools and public funding
exist, more are clearly needed and examples of what is currently available are discussed here
in detail to help articulate the possible solutions that exist within the market. While the economic
and climate challenges Africa faces are complex and interconnected, several emerging dynamic
trends in Africa leave the continent well-positioned to innovate and lead the global green growth
agenda leveraging the rich abundance of natural resources. This presents a unique business and
investment opportunity to pursue a nature-positive transition.

Highly positive noteworthy trends are unfolding across the continent. Many
African economies are taking clear steps to increase economic diversification
and enhance participation in value-added manufacturing and services
crucial to the green transition. Sustainable development practices, for
instance, are taking place in mineral value chains in the Democratic Republic
of the Congo and Zambia. There is also a promising shift underway towards
increased regional economic cooperation, with initiatives such as the
African Continental Free Trade Area (AfCFTA) offering a new model for intra-African trade and
development. This shift can facilitate innumerable opportunities for green businesses to exploit
and enter new, regional markets.

This report focuses on ‘green’ sectors that UNDP believes are of the utmost strategic
importance for the continent, including renewable energy, water and related infrastructure;
sustainable agriculture and food production; forestry and nature-based solution; eco-tourism;
and a broad sector called technology and next-generation solutions. The report also explores
case studies from each of these sectors. For example, M-KOPA and Sistema.bio are two highly
successful companies that provide evidence of technology and data-driven product innovation.
Large transformation infrastructure projects are also explored, such as the Noor Ouarzazate Solar
Energy Complex and the Kigali Bulk Water Project, which demonstrate innovative business
models with a high potential for replication elsewhere.

‘Innovation themes’ relating to each sector are articulated to serve as examples of where
opportunities are emerging for African- and Global South-led innovation. The innovation themes
identified (and listed below) highlight major growth opportunities and trends in green business
sectors.

xii 2 Climate Policy Initiative, 2022, ‘The State of Climate Finance in Africa: Climate Finance Needs of African Countries’ (link).
 E xecutive summary

RENEWABLE ENERGY: Improve the continent’s energy mix and upscale local technology
production to drive green industrialization.
WATER: Develop tech-based innovative service delivery models to ensure access to clean
water and sanitation for communities and increase the efficient use of water resources.
WASTE MANAGEMENT: Embrace circularity and technology innovation as a means to
protect the national environment.
REGIONAL AND CONTINENTAL TRANSPORT: Shift towards sustainable and smart
alternative vehicles.
TELECOMMUNICATIONS AND DIGITAL INFRASTRUCTURES: Expand access and
quality of sustainable digital tools.
AGRICULTURE: Expand local climate-smart agricultural and agri-food practices.
NATURE-BASED SOLUTIONS: Restore ecological landscapes and establish advanced and
reliable connected carbon market products.
ECO-TOURISM: Leverage the continent’s eco-cultural heritage.
TECHNOLOGY AND NEXT GENERATION SOLUTIONS: Optimize performance and
efficiency.

The importance of an enabling policy environment to support the development and thriving of
green businesses cannot be understated. While many parts of the continent face challenges
with existing policy, a number of positive examples exist of national and international policy
and regulatory interventions. These include enabling actions at the local level, data-driven
and evidence-based policymaking, fiscal policy reform, intersectional approaches (such as the
National Action Plan on Gender and Climate Change for Nigeria), sustainable stock exchange
initiatives, the United Nations Global Compact and opportunities provided by international and
regional frameworks (such as AfCFTA). Numerous highly promising initiatives are underway
across the continent, which AGBFI seeks to highlight throughout the course of its work, so
they can be built upon for the future.

Combining analyses of the market landscape, financial landscape and

regulatory environments has yielded a series of clear barriers to the growth
of green business across the continent. These broadly cover the themes
of governance, investment and finance, venture, corporate risk, enabling
skills and market infrastructure, which, when looked at together, lead to
a framework for practical action. A clear need was identified to focus on
lowering the risk perception of green business in Africa, improve access to
capital markets, address the current limits and scope of concessional capital
flows and support capacity building to grow and scale highly impactful green businesses in the
region. Addressing the barriers is required to enhance the ability of investment capital seeking to
promote green business to be deployed at pace and scale.

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Alongside the innovation pathways, six strategically ambitious recommendations were identified
for AGBFI. These are action-orientated and feasible measures which if taken have a huge potential
for catalysing green growth. The recommendations are outlined in more detail in the final section
of this document but can be summarized as described below.

1. PROMOTE DEDICATED GREEN INVESTMENT BANKS, facilities and funds, with a specific
mandate to support the development of green business in the region via green financing
products, for example green microfinance, and target new sources and types of financing.

2. CREATE AN AFRICAN URBAN GREEN BUSINESS AND FINANCE PLATFORM to help

support Africa’s rapidly growing cities meet the dual challenges of rapid urbanization and
climate change, with a key mandate to catalyse and transform green business ventures and
entrepreneurship in urban locations.

3. ESTABLISH NATURE AS AN ASSET CLASS, leveraging the lessons from carbon markets
elsewhere as well as Africa’s nature-rich status, to build robust carbon and biodiversity
markets and make Africa the hub for the issuance of instruments linking nature, biodiversity
and carbon.

4. ENHANCE GREEN VALUE CHAINS AND CAPACITY, leveraging Africa’s natural abundance
of minerals needed in the green transition, along with the region’s sustainable energy and
human capital potential, to ensure greater value addition remains within the communities and
areas involved in mineral extraction.

5. ENCOURAGE MULTI-LATERAL DEVELOPMENT BANKS to do more to reduce investment

risk in Africa through the creation of new and innovative instruments, funds and facilities,
engagement with central banks to tackle currency risk issues, allowing private investors
access to their internal risk modelling data and analytics and engaging with credit ratings
agencies to review their methodology for Africa. This is all done with a view to lowering the
cost of capital for Africa and encouraging increased private investment in the region.

6. CREATE AN AFRICAN GREEN BUSINESS INSTITUTE to serve as a hub for green

business in the region and act as a repository of best human capital practices in the region.
In addition, create an internship and youth leadership programme to engage Africa’s youth in
green business and initiate innovation awareness and investment pitching processes to build
awareness and reward innovation.

These are not intended to be mutually exclusive actions, in fact in many ways they are inextricably
linked in positive feedback loops. However, they are designed to be bold and transformative,
address the barriers to growth identified above, champion a leadership role for Africa and reflect
the regional ambitions outlined in the 2023 Nairobi Declaration, adopted at the Africa Climate
Summit.

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 E xecutive summary

To advance the role of the private sector engagement in climate

action and the growth of the green economy, the United Nations
Development Programme (UNDP) Africa Sustainable Finance Hub
(ASFH) is championing the Africa Green Business and Financing
Initiative (AGBFI) to enable the development of green businesses
and financing models and increase their contribution to the green
transition in Africa.

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xvi

1. INTRODUCTION
1.1 Background and context
A successful and timely green business
transition is an absolute necessity for Africa
as it grapples with the dual challenges posed
by the increasingly extreme impacts of climate
change and the imperatives of continued
economic growth. Such a transition represents
the opportunity to pursue alternative growth
models, leapfrog generations of technology
and build a more sustainable future.
It is against this backdrop that the United
Nations Development Programmes (UNDP)
2022-2025 Strategy Plan3 has placed the
planetary emergency at the centre of its vision
to achieve the Sustainable Development
Goals and support countries towards a “green,
inclusive transition.” Within this, the UNDP
Africa Sustainable Finance Hub (ASFH) aims
to leverage private sector engagement and
development to advance green business and
finance in Africa via the Africa Green Business
and Financing Initiative (AGBFI), of which this
report is a central activity.
Delivered in September 2023, The Nairobi
Declaration4 is of central importance to the
development of green business in Africa. This
ambitious document lays the foundation for a
concerted approach to help the region combat
climate change and facilitate a green transition.
This significant strategic document has been
central to the development of this report and
the strategic recommendations made in the
final section.
With respect to green business and finance
within the Nairobi Declaration, the document
makes significant commitments to:
3 UNDP, 2021, ‘Strategic Plan 2022-2025’ (link).
4 African Union, 2023, ‘The African Leaders Nairobi Declaration on Climate Change and Call to Action’ (link).
1 . Introduction
climate-positive growth, renewable energy
expansion, protection and enhancement of
biodiversity and nature;
green industrialization;
sustainable agriculture;
standards, metrics and market mechanisms
to value nature, biodiversity and co-
benefits; and,
policy and enabling environments to
support all the above.
The Declaration acknowledges challenges
and opportunities for the region, including
the opportunity emerging from its youthful
demographics and challenges arising from
a rapidly urbanizing population. These are
important features of the context in which
green business in Africa is developing. They
represent new markets for innovative solutions
and business models, some of which have
been described in detail in the case studies
included in this report, which describe highly
impactful and innovative businesses.
The Nairobi Declaration is a call for action. It
envisages a leadership role for Africa within
the global effort to combat climate change, as
well as a determination to see Africa receive its
fair share of support and funding to address the
challenges of climate change and the green
transition. Building on this ambitious vision, this
Africa Green Business and Financing Flagship
Report provides concrete and practical
recommendations to support the intentions
and strategies of the Nairobi declaration.
Even more recently, in December 2023,
the Conference of the Parties 28 (COP28)
concluded with significant decisions that
will have a particular impact on the African
continent. A high profile Arab-African initiative
was launched to scale up agriculture and food
systems across both regions. Called the ‘Africa
1
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
and Middle East SAFE Initiative,’ it is a public-
private partnership that will disperse over
US$10 billion in funding.5 In addition, the launch
of a loss and damage fund – which is highly
significant for many developing countries in
Africa – was agreed upon and $792 million
pledged towards it. While climate financing
gaps remain vast for the continent and thus
more progress is needed, COP28 did see
record commitments to funding the transition
and Africa is set to benefit from a number
of these schemes in the coming years.6 In
addition to these impressive new funding
commitments, the 2022 Mo Ibrahim report
also sets important context for the work of
this document. This landmark report, entitled
‘The Road to COP27: Making Africa’s Case in
the Global Climate Debate’ made the case for
the critical importance of climate financing for
Africa, particularly given the continent’s tiny
contributions to CO2 emissions, as well as
their vulnerability to the negative impacts of
climate change7.
1.2 Report objectives
This report has been undertaken under the
supervision of the UNDP Africa Sustainable
Finance Hub (ASFH) in close cooperation
with several UNDP Country Offices, the
UNDP Regional Bureau for Africa (RBA) and
the UNDP Regional Service Centre for Africa
(RSCA). The work was supported by the Global
Green Growth Initiative (GGGI) Africa Team
and an external Advisory Board comprised of
14 subject matter experts, thought leaders and
market players.
The overarching objective of AGBFI is to
promote and enable the development of green
business and financing models and increase
the role of the private sector in climate action
and the green economy in Africa. Within this
context, this action-orientated report will inform
the United Nations regional office and other
partners about potential opportunities that
would result in a sustainable and high impact
5 Global Green Growth Institute, 2023, ‘10 Billion USD Africa and Middle East SAFE Initiative Launched for Food Security’
(link).
6 World Resources Institute, 2023, ‘Key COP28 Takeaways for Africa’ (link).
2 7 Mo Ibrahim Foundation, 2022, ‘The Road to COP27: Making Africa’s Case in the Global Climate Debate’ (link).
boost to green business in Africa. This has been
done via an overview of the green business
and finance landscape in Africa, including a
look at key transformational opportunities and
strategic challenges for green business and
finance, an analysis of enabling considerations
and policy environments for green business
development and by providing clear examples
of what can be achieved via eight flagship
case studies.
The report also highlights other examples
of activities, initiatives, platforms, funding
mechanisms and strategic themes for the
green transition in Africa alongside a set of
recommendations for further action.
1.3 Green business and finance
– Definition of key terms
As articulated by UNDP, the concept of ‘green
business and finance’ combines areas of
business (oriented to economic growth) and
finance (the financial industry), with actions and
behaviours that aim to improve and protect
the environment. In this sense, promoting
green business and financing implies creating
a favourable business climate and the
conditions for climate mitigation, adaptation
and resilience financing, investments and
other environmentally friendly economic
activities. From a private sector perspective,
it means promoting private sector investment
in low-carbon and green ventures with a view
to stimulating low-carbon, resource-efficient
economic growth and the creation of green
jobs.
More specific definitions of green business
and green finance are articulated below.
1. GREEN BUSINESS: Businesses
that incorporate into their operating
models a fundamental consideration
and prioritization of the impacts of their
operations on environmental issues.
For example, this would be through

selling products or services that have
a demonstrable positive impact on
environmental issues (e.g., renewable
energy, cleaner burning cookstoves,
reduced pollution in fishing fleets), greening
their processes to make them substantially
more sustainable, and/or making significant
contributions to improve circularity within
the economy (e.g., recycling solutions).
This definition is intended to be inclusive
of all green activities, including the blue
economy (marine environment and coastal
resources).
2. GREEN FINANCE: Can be defined from
two perspectives, described below.
a. A financial instrument (e.g., loan, bond,
investment) designed to finance either
green business activities (as defined
previously) or adaptation and mitigation
activities, including carbon and
biodiversity credits as a green revenue
stream for the sellers of credits.
b. A specific financial instrument that has
been created explicitly for the purpose
of ensuring a better environmental
outcome (e.g., green mortgages, green
or blue bonds, green loans).
1.4 Importance of promoting
green business and financing in
Africa
The UNDP Strategic Plan (2022-2025) outlines
an ambitious and collaborative vision for
achieving the Sustainable Development
Goals and securing the health and prosperity
of the planet for future generations. To this
end, UNDP is working closely with countries
across the globe to help achieve progress on
climate change and nature protection, while
also ensuring that societies become more
equitable, prosperous and resilient.
Such actions are needed more than ever: the
Paris Agreement’s goal to curb global warming
to 1.5 ˚C is veering off track,8 and nations must
8 E&E News and Harvey, C., 2022, ‘The World Will Likely Miss 1.5 Degrees C—Why Isn’t Anyone Saying So?’, Scientific American
(link).
9 The Independent Expert Group on Climate Finance, 2020, ‘Delivering on the $100 billion climate finance commitment and
transforming climate finance,’ United Nations (link).
1 . Introduction
intensify climate actions dramatically to limit
temperature rise to 2˚C by the century’s end.
Despite pandemic-driven “green recovery”
pledges, current efforts are insufficient. Indeed,
for every dollar spent addressing the climate
crisis, four dollars fund fossil fuel subsidies,
perpetuating the crisis.
Despite Africa emitting just four percent of
greenhouse gas emissions, the continent is
extremely vulnerable to the impacts of climate
change. Extreme weather – including droughts,
cyclones and heatwaves – is increasing in
frequency and intensity, alongside trends of
urbanization, population growth and weak
conservation enforcement. Ecosystem
damage and biodiversity loss is now having
major negative impacts on livelihoods, causing
$7-15 billion in yearly losses (projected to reach
$40 billion by 2030).
Yet, climate change and green business
development also offer African countries
strategic growth opportunities for sustainability.
Studies show that developing countries’
energy transition and shift to climate positive
resilient infrastructure represents a $100 billion
annual investment opportunity.9 As mentioned
previously, major initiatives are already
underway across the continent, ranging from
solar energy in North African countries, such as
the 580MW Noor Ouarzazate Solar Complex
in Morocco (see case studies), to wind energy
projects in East Africa, such as the 310 MW
Lake Turkana wind project in Kenya.
Private finance is key to unlocking green
business opportunities in Africa. Relying
solely on public funds won’t suffice to achieve
the development goals set by the Paris
Agreement’s NDCs. Invest in sustainable and
profitable initiatives that will drive Africa’s
progress towards a greener future. Several
economic opportunities arise from the
promotion of green business and financing in
Africa.
3
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
ECONOMIC GROWTH:
According to a study conducted by the
Commonwealth Climate Finance Access
Hub, the green economy offers significant
economic opportunities.10 It promotes
sustainable practices in industries, such
as renewable energy, agriculture and eco-
tourism. Private sector engagement can
drive economic growth, create jobs and
boost innovation.
ENVIRONMENTAL SUSTAINABILITY:
An African Development Bank (AfDB) report
stresses that Africa faces environmental
challenges, including deforestation and
pollution.11 Private sector involvement can
help implement eco-friendly technologies
and practices, contributing to environmental
sustainability.
CLIMATE CHANGE MITIGATION:
Private sector investments in green
technologies and energy can help mitigate
climate change, reducing the vulnerability
of African nations to its adverse effects.
Despite the clear opportunity, progress towards
greater private sector participation in Africa’s
green economy has been slow. Several key
barriers and challenges (listed below) explain
this trend, which will be expanded upon within
this report.
LACK OF INVESTMENT AND ACCESS
TO FINANCE:
The private sector often faces barriers such
as limited access to finance and insufficient
incentives for green investments.
10 Biswas, S., and Yila, O., 2022, ‘Blog: Why transitioning to an Inclusive Green Economy is vital to fulfilling climate goals in
Africa,’ The Commonwealth (link).
4 11 African Development Bank (AfDB), 2023, ‘Private Sector Financing for Climate Action and Green Growth in Africa’ (link).
POLICY AND REGULATORY ISSUES:
Inconsistent policies and regulations
across African countries and inadequate
enforcement can deter private sector
involvement in green initiatives.
INFRASTRUCTURE CHALLENGES:
Inadequate infrastructure for green
projects, such as renewable energy
installations, can hinder progress.
AWARENESS AND CAPACITY:
Some businesses may lack awareness
of the benefits of green practices or the
capacity to implement them effectively.
Addressing these challenges through
strategic interventions, market developments,
supportive policies, investment incentives
and capacity-building programmes is crucial
to accelerating private sector engagement in
Africa’s green economy. For example, despite
there being significant interest in renewable
energy, climate-smart agriculture and more,
at this stage many projects are simply not
bankable or investment-ready.
To this end, UNDP has identified a clear need
to bring together more effectively the world of
business and finance with that of sustainable
development and the green imperative.
Achieving this will require collaborative efforts
to mitigate investment risks, bring together
projects and funders and create the enabling
conditions that will allow green business to
scale up and thrive across the continent. It is
precisely this that the UNDP Africa Sustainable
Finance Hub (ASFH) hopes to achieve with the
Africa Green Business and Financing Initiative.
1 . Introduction

5
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024

6

2. REGIONAL CONTEXT
2.1 Economic backdrop
Any report that wishes to focus on the
continent of Africa must first acknowledge the
profoundly different economic, political and
developmental situations which are present
across the continent. Africa contains some of
the world’s poorest countries – as measured
by gross national income (GNI) 12 per capita
– but also many well developed and thriving
economies. According to the World Bank’s
economic classification of countries (utilizing
GNI per capita), in 2022 in Africa, there were 22
FIGURE 1: African countries by income classification
12 Gross national income is an economic indicator, defined by OECD as ‘gross domestic product, plus net receipts from abroad
of compensation of employees, property income and net taxes less subsidies on production’ (link).
2. Regional context
low-income countries ($1,135 or less), 24 lower-
middle income countries ($1,135 to $4,466) and
seven upper-middle income countries ($4,466
and $13,845).
As can be seen from Figure 1, economic wealth
is not evenly distributed across the continent.
Northern and southern regions are generally
made up of lower-middle and upper-middle
income economies, whereas the sub-Saharan
Africa and central African regions are made up
of predominantly low-income countries.
Low income
Lower middle income
Upper middle income
High income
7
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024

It is also important to differentiate based
on economic growth rates, as the reality is
that many of Africa’s (and the world’s) fastest
growing economies fall into the low-income
category. According to the AfDB, while Africa’s
overall gross domestic product (GDP) grew
at 3.8 percent in 2022, Rwanda’s grew at 7.9
percent, Côte d’Ivoire’s at 7.1 percent, Benin’s
at 6.4 percent, Ethiopia’s at 6.0 percent and
Tanzania’s at 5.6 percent.13
In terms of employment, agriculture remains the
largest sector, employing 49 percent of workers
in 2023.14 It is important to note that while this
is a high figure, the data clearly indicates a
trend towards agriculture representing a slowly
decreasing percentage of total employment,
with the International Labour Organization’s
(ILO) data showing a steady decline from
agriculture’s 58 percent share of employment
in the year 2000.15 ILO also notes sub-regional
variations in this decline, with the biggest
drop of 14 percent observed in West Africa
(including the important economies of Ghana
and Nigeria).
As the relative importance of agriculture
steadily declines across the continent and
other sectors grow, an ever-larger number of
people are finding employment in both industry
and services. The share of employment in
services increased from 29 percent to 37
percent between 1991 and 2023 and industry
increased from 12 percent to 14 percent in
the same period.16 This is accompanied by a
shift in the types of work, with those having
”employee status“ gradually becoming more
common, though informal work still dominates
across the continent.
In terms of the sectoral makeup of the African
economy, there is – again – a huge diversity
across regions. For the purposes of a broad
macro-overview, the AfDB groups African
economies into the below four categories.17
TOURISM-DEPENDENT:
Countries with economies that are heavily
dependent on the tourism industry.
Countries that fall within this category
are all island nations with far higher
levels of economic development than the
continent’s average.
OIL EXPORTING:
Countries that are highly economically
dependent on fossil fuels extraction. These
11 countries are predominantly in north
Africa, with notable exceptions including
Nigeria, Africa’s largest economy.18
NON-RESOURCE-INTENSIVE:
Countries that are not overly focused on
single commodities and as such are more
diversified and stable than other groupings.
Agriculture is the most common dominating
sector for many within this grouping, which
makes up a quarter of Africa’s GDP.
OTHER RESOURCE-INTENSIVE:
Countries with economies that are focused
on commodities not covered in previous
categories, for example, metals and
minerals (mining). 16 countries are in this
diverse category, which contains within it
low-income countries like the Democratic
Republic of the Congo and Niger, as well
as upper-middle income countries, such as
Botswana and South Africa.

In general, it can be said that African economies

are commodity-based to a higher degree than

13 AfDB, 2023, ‘Africa’s economic growth to outpace global forecast in 2023-2024’ (link).
14 Kuyoro et al., 2023, ‘Reimagining economic growth in Africa: Turning diversity into opportunity,’ McKinsey Global Institute
(link).
15 International Labour Organization, 2019, ‘Africa’s Employment Landscape,’ ILOSTAT (link).
16 Ibid.
17 AfDB, 2023, ‘African Economic Outlook 2023’ (link).
18 It is important to note that while a number of countries are heavily dependent on fossil fuel extraction in Africa, virtually no
African country exports globally significant volumes. The importance of these sectors on the continent is more a function of
the underdevelopment of other sectors rather than a reflection of any particularly strong market positioning with regards to
8 fossil fuel extraction (link).
 2. Regional context

other continents.19 The most significant of
these include agricultural commodities, such
as coffee, cocoa and tobacco, extractives,
such as crude oil and natural gas, and mined
materials, such as gold, silver, iron and coal,
as well as key minerals for the green energy
transition, such as copper, nickel, lithium and
cobalt.20 The main commodities that Africa
exports to the rest of the world varies from
region to region and country to country.
Furthermore, it is notable that most countries’
exports are dominated by just one or two key
commodities. For example, petroleum and
related products dominate in much of North
Africa, iron ore in Liberia and Mauritania and
copper in the Democratic Republic of the
Congo and Zambia.21 According to the United
Nations Conference on Trade and Development
(UNCTAD), commodities account for more than
60 percent of total merchandise exports in
45 out of 54 African nations,22 leaving many
countries highly vulnerable to price shocks
and fluctuations in exchange rates.
2.2 Macro development trends
Current levels of economic development,
sectoral compositions and short- to medium-
term growth trends display a huge diversity
across the continent. However, some critical
macro trends, opportunities and challenges are
relevant continent-wide. They are described
below.

FIGURE 2: Export value of fossil fuels, minerals and metals from Africa and share in total
exports in selected African countries23

Exports Share of total product export, 2020

600 Africa

500 South Africa

DRC
Billion USD (2020)

400 Nigeria
Chad
300 Guinea
Algeria
200 Botswana
Eq. Guinea
100 Libya
Angola
0 South Sudan
2000 2010 2020 0% 25% 50% 75% 100%

Coal Oil Gas Minerals and metals Other

IEA. All rights reserved.

19 United Nations Conference on Trade and Development (UNCTAD), 2022, ‘Economic development in Africa: Rethinking the
foundations of export diversification in Africa – The catalytic role of business and financial services’ (link).
20 Africanews, 2023, ‘S.A’s mining is the country’s main exports contributor but may only have decades left’ (link).
21 Gardiner, R., and Mabogunje, A., 2023, ‘Trade in Africa’, Britannica (link).
22 UNCTAD, 2022, ‘Economic development in Africa: Rethinking the foundations of export diversification in Africa – The
catalytic role of business and financial services’ (link).
23 International Energy Agency (IEA), 2022, ‘Africa Energy Outlook: World Energy Outlook Special Report’ (link). 9
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
1. INCREASING DIVERSIFICATION AND
VALUE-ADDED:
While agriculture and primary materials
have historically dominated the continent,
a long-term shift towards value-added
industries and services is well underway.
As this gathers pace, levels of economic
development will continue to rise, and
the African economy will become far
more resilient. The critical questions are
which industries and services will come to
dominate and how can this be encouraged
and accelerated. A key strategic question is
to what extent can this shift become driven
by green sectors. Given its abundance
of critical minerals, renewable energy
generation potential and large workforce,
the potential for Africa to become a global
leader in green manufacturing is clear.
2. GROWTH OF INTRA-REGIONAL
ECONOMIC COOPERATION:
A promising trend is the growing emphasis
on intra-regional cooperation. African
nations are recognizing the benefits of
working together, harmonizing policies
and reducing trade barriers. Initiatives
like the African Continental Free Trade
Area (AfCFTA) are set to drive economic
integration, reducing dependency on
external markets and fostering regional
growth. Another interesting example is the
potential development of African currency
zones and the increased economic
cooperation, investor risk reduction and
growth that this could facilitate.
3. SHIFT TOWARDS MORE FORMAL
EMPLOYMENT:
Africa is undergoing a significant shift
towards formal employment. While
informal work still dominates, the increase
in employee status, combined with a
youthful and burgeoning workforce,
presents a unique opportunity for
sustainable economic growth and green
entrepreneurship.
10 24 Organisation for Economic Co-operation and Development (OECD), 2022, ‘The Economic Power of Africa’s Cities’ (link).
4. DEPENDENCE ON NON-GREEN
SECTORS:
A considerable challenge for many African
economies lies in their reliance on non-
green sectors, including fossil fuels,
mining, natural-resource extraction and
unsustainable agricultural practices. As
the African economy continues to grow,
a question remains over the extent to
which the continent can simultaneously
encourage growth, while reducing their
reliance on sectors that are typically more
difficult to integrate into an environmentally
sustainable economic model.
5. DEMOGRAPHICS AND
URBANIZATION:
Africa is demographically unique compared
to the rest of the world. Unlike other
regions, who are currently experiencing
senescence (and associated ballooning
social care costs) and the prospect of
population decline, Africa’s population is
young and growing rapidly. A young and
dynamic population has the potential to
provide huge economic benefits in the
years to come and represents a key macro-
advantage that Africa possesses over the
rest of the world. Another key trend is that
of urbanization. Much like the rest of the
world, African countries are experiencing
rapid shifts towards urban living, with
over 5,000 new cities emerging in Africa
since 1990.24 This rapid structural shift
must be managed carefully to ensure the
liveability and sustainability of new urban
environments and populations.
 2. Regional context

FIGURE 3: Projected GDP impacts of climate change scenarios on sub-Saharan Africa25

2020 2027 2037 2047 2067 2100

-2

-4

-6

-8

-10
Percent change in GDP
0°C (no warming) 1.5°C (Paris Agreement) 2°C 3°C (business as usual)

2.3 Key environmental

challenges

As described previously, Africa is currently

undergoing several profound changes,
including rapid economic development,
population growth and urbanization. While
in many ways these developmental trends
represent a positive story for the African
continent, they also contribute to intensification
of pressure on the natural environment. In this
context, several key environmental challenges
have arisen in the past decades. Achieving
sustainable and green growth means tackling
these problems in such a way that people
and nature can both thrive indefinitely. The
challenges most often cited – deforestation,
desertification, air pollution, water pollution
and biodiversity loss – are described in the
tables below.

25 Brookings Institute Africa Growth Initiative, 2020, ‘Foresight Africa: Top Priorities for the Continent 2020-2030’ (link). 11
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024

Photo credit: Melanie Pisano/UNDP

TABLE 1: Deforestation in Africa overview

Current situation Causes Future trends and solutions

Forest cover across Africa
has continued to shrink
over the last century. It now
stands at 21 percent of
land area26 – a 22 percent
reduction from 1900.27 The
situation varies hugely across
countries and climates, with
many having historically
encouraged deforestation
and virtually eliminated forest
cover in favour of production
of high levels of agricultural
commodities such as cocoa
(Côte d’Ivoire and Ghana are
examples of this). Research
indicates that forest loss is the
single largest driver of carbon
emissions in Africa.28
According to Chatham House
research “agriculture is
the largest direct cause of
forest loss, accounting for
approximately 75 percent of
deforestation in Africa. This
includes both subsistence
farming and industrial
agriculture – which includes
cocoa and oil palm production
– and cattle ranching.”29 Other
direct causes include timber
production, wood as a fuel
source and urbanization.
While the speed of
deforestation – the
deforestation rate – has
somewhat reduced globally
in the last years30 overall,
the deforestation rate has
continued to accelerate in
Africa. International pressure
and financial incentives – such
as REDD+ (reducing emissions
from deforestation and forest
degradation in developing
countries) – are contributing
to reducing this, however,
more needs to be done.

26 Pearce, F., 2023, ‘As Africa Loses Forest, Its Small Farmers Are Bringing Back Trees,’ Yale Environment 360 (link).
27 Cerutti, P.O., Uehara, T.K., and Wallace, J., 2023, ‘Deforestation in Africa’ (link).
28 Blaise, A., 2023, ‘Agriculture-linked deforestation topmost driver of emissions in Central Africa – Report,’ Forest News (link).
29 Ibid.
12 30 Igini, M., 2022, ‘Deforestation in Africa: Causes, Effects, and Solutions’ (link).
 2. Regional context

TABLE 2: Desertification in Africa overview

Current situation Causes Future trends and solutions

According to the United While desertification is a If the world continues to heat

Nations Environment
Programme (UNEP)
“desertification affects
around 45 percent of Africa’s
land area, with 55 percent of
this area at high or very high
risk of further degradation.”31
Furthermore, approximately
60 percent of the population
lives in “arid, semi-arid, dry
sub-humid and hyper-arid
areas.”32
natural biological process,
the speed and scale at which
it is currently occurring is
widely attributed to the
impacts of climate change
and human activities. 33 Other
environmental challenges,
such as deforestation, directly
contribute to desertification
through soil erosion and
water loss – as mentioned
previously, this is in turn
largely caused by land-
use change as a result of
agriculture.
up beyond the 1.5-degree
target internationally
agreed upon in the Paris
Agreement, the problem of
desertification will continue
to get worse. A number of
high-profile initiatives are
currently underway to combat
desertification. For example,
the Great Green Wall, started
in 2007, which aims to
“restore 100 million hectares
of currently degraded land,
sequester 250 million tons of
carbon and create 10 million
green jobs by 2030.”34

Photo credit: UNDP Democratic Republic of the Congo

31 United Nations Environment Programme (UNEP), 2015, ‘The Economics of Land Degradation in Africa: Benefits of Action
Outweigh the Costs; A complementary report to the ELD Initiative,’ Earth.Org (link).
32 Stallwood, P., 2022, ‘Desertification in Africa: Causes, Effects and Solutions,’ Earth.Org (link).
33 Ibid.
34 UNCCD, 2023, ‘Great Green Wall Initiative’ (link). 13
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024

TABLE 3: Air pollution in Africa

Current situation Causes Future trends and solutions

Africa has some of Numerous significant As Africa continues to prosper

the worst levels of air
pollution and the most
severe negative health
impacts from air pollution
in the world35 . According
to research from the State
of Global Air, air pollution
was the second leading
risk factor for death
across the continent in
2019. Moreover, in terms
of “ambient fine particulate
matter,” Africa contains 5 of
the world’s 10 most heavily
polluted countries36 .
causes exist of air pollution,
including energy generation
(for example the burning of
fossils fuels, such as coal),
industry, transport, waste,
residential (for example the
burning of wood as a fuel
source), agriculture (e.g.,
animal raising, fertilizers,
vehicles) and windblown
dust. The relative
significance of each cause
varies from country to
country (as such, so does
the applicable solution).
economically and environmentally
(through the flourishing of green
business), the hope is that the
problems of air pollution can be
ameliorated as technologies are
phased out and new innovations
introduced. 37 For example,
as populations move towards
clean fuel sources in the home,
national energy systems adopt
renewable sources and waste
management systems become
more efficient and effective.
Though it is important to note
that this is of course not an
automatic process, it requires
concerted effort and cooperation
of government, businesses and
other stakeholders.

TABLE 4: Water pollution in Africa

Current situation Causes Future trends and solutions

According to the United Nations
Department of Economic and
Social Affairs (UNDESA), an
estimated 115 people in Africa
die every hour from diseases
linked to contaminated water,
improper hygiene and poor
sanitation, 38 such as typhoid,
cholera and dysentery. In
addition, lack of clean water
also has a detrimental impact
on food production. Despite
widespread availability of
water sources across many
African countries, inadequate
infrastructure means that many
of the most water-distressed
countries in the world are in
Africa. 39
The types of water pollution
and causes of water
pollution are numerous.
Plastic waste pollution
is generally the result
of inadequate waste
management systems. Other
types include industrial
waste from sectors, such as
mining, chemical waste from
agriculture and pollution
from untreated sewage.40
The most material cause
varies depending on the
local context, as will the
most efficient and effective
methods for addressing the
problem.
Unfortunately, as the African
population and industrial
base grows, the pressure on
water resources is likely to
increase. Recent research in
the journal Nature created
a model that predicted that
“organic water pollution in
sub-Saharan Africa will more
than quadruple by 2100,
leaving 1.5 billion people
exposed to unsafe water.”41
Avoiding this scenario will
involve extensive investment
in infrastructure, tighter
regulation of industry and
private sector innovation at
pace and scale.

35 The State of Global Air, 2019, ‘Air pollution and Health Impacts in Africa’ (link).
36 Ibid.
37 Camfil, 2017, ‘How to Fight Air Pollution in Developing Countries’ (link).
38 The Last Well, 2019, What Causes Water Pollution in Africa?’ (link).
14 39 Ighobor, K., 2023, ‘Water Insecure Africa gets Some Wins at the UN Water Conference,’ Africa Renewal (link).
40 McClure, M., 2011, ‘What are the Causes and Effects of Water Pollution in Africa?’ Greenpeace (link).
41 Tozer, L., 2023, ‘Water Pollution ‘Timebomb’ Threatens Global Health,’ Nature (link).
 2. Regional context

TABLE 5: Biodiversity loss in Africa

Current situation Causes Future trends and solutions

Africa is home to some of the world’s most Biodiversity The statistics on biodiversity
biodiverse regions and ecosystems. Indeed, decline across loss across the continent are
according to the Intergovernmental Science- Africa is caused stark and without significant
Policy Platform on Biodiversity and Ecosystem by a number and rapid change, it is
Services (IPBES), approximately 62 percent of factors. inevitable that this trend
of the African rural populations depend on These include will continue. A small cause
natural ecosystems to meet basic needs, natural habitat for hope is the increasing
such as energy, food and livelihoods.42 destruction for attention that the issue is
Africa’s biodiversity, both in terms of species purposes such receiving both in the public
and natural habitats, is under significant as agriculture, sector as well as the private
threat. According to the International Union logging sector, where it is becoming
for the Conservation of Nature (IUCN), more and mining, increasingly prioritized. A
than 6,400 animal species and 3,100 plant degradation global challenge such as this
species in Africa are currently in danger of through water is also an opportunity for
extinction.43 In addition, surveys tracking and air pollution, innovative actors to create
Africa’s bird populations have revealed as well as solutions. A lot is already
declines over the last quarter century. The illegal hunting happening across Africa to
populations of vertebrate species in Africa and bushmeat this end, as this report aims
have seen an estimated decline of 39 harvesting.45 to highlight and celebrate.
percent since 1970.44

2.4 Summary of regional
context
Though a global issue, it is widely acknowledged
that Africa is suffering the most extreme impacts
of the shifting climate. Despite emitting a tiny
fraction of global greenhouse gas emissions,
the continent is disproportionately negatively
impacted by a host of climate change impacts,
including heatwaves, droughts and wildfires
and flooding.46 Indeed, many of the challenges
described above are either caused in part or
exacerbated by climate change, as well as in
turn contributing to its worsening in a negative
feedback loop.
The key takeaway from all these challenges
is that these issues are highly intertwined and
interrelated. Moreover, for the purposes of this
report on green business, these are the key
issues which must be addressed for Africa to
thrive economically and socially in the future.
Africa currently stands at a crossroads. On the
one hand, the continent is highly vulnerable to
the negative impacts of climate change and its
nature is being degraded at an alarming rate.
On the other hand, governments are keen to
pursue economic growth and development
to better quality of life. This report hopes to
show that this need not be a trade-off between
environmental catastrophe and economic
development. Rather, Africa has a unique
opportunity to utilize its human and natural
capital, taking advantage of significant
competitive advantages to become a global
leader in the green economy.

42 Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), 2018, ‘The IPBES regional
assessment report on biodiversity and ecosystem services for Africa’ (link).
43 UNEP, 2016, ‘The State of Biodiversity in Africa: A Mid-term Review of Progress Towards the Aichi Biodiversity Targets’ (link).
44 African Center for Strategic Studies, 2022, ‘African Biodiversity Loss Raises Risk to Humanity’ (link).
45 Chapman et al., 2022, ‘The future of sub-Saharan Africa’s biodiversity in the face of climate and societal change,’ Sec.
Conservation and Restoration Ecology Volume 10 – 2022 (link).
46 World Meteorological Organization, 2023, ‘Africa Suffers Disproportionately from Climate Change’ (link). 15
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024

16
 3. Overview of the current state of green business in Africa
3. OVERVIEW OF THE CURRENT
STATE OF GREEN BUSINESS
IN AFRICA
3.1 Introduction
In recent years African countries have made a
series of high-level political commitments to
climate goals and sustainable development
that are highly ambitious. With the exception
of Libya, all African countries have signed the
Paris Agreement and associated NDCs.
In terms of African originated political initiatives,
the 2023 Nairobi Declaration is indicative of
a serious commitment on the part of many
African nations to climate change adaption,
mitigation and green growth. The Declaration
makes a strong case that Africa possesses both
“the potential and the ambition to be a vital
component of the global solution to climate
change” through becoming “a thriving, cost-
competitive industrial hub with the capacity to
support other regions in achieving their net zero
ambitions.” Moreover, through the Declaration,
countries made 12 wide-ranging and concrete
commitments to facilitate this goal, including
increasing interregional collaboration,
catalysing green industrialization, accelerating
the energy transition, investing in climate-
smart infrastructure and more.47
This section provides an overview of the green
business landscape across Africa. However,
datasets that consider Africa as a single entity
(as opposed to country-level datasets) are
rare. Furthermore, the bespoke definition of
green business being used for this report
encompasses a wide variety of sectors critical
to the African economy. As such, this section
will take a sector-based approach focusing on
groups of related key focus sectors, assessing
the general status of the sector in the different
47 Ibid.
48 can Union, 2023, ‘The African Leaders Nairobi Declaration on Climate Change and Call to Action’ (link).
contexts found across Africa, as well as exploring
the roles that the private sector is playing now
and could play in the future, alongside specific
innovation pathways highlighting emerging
trends and innovations. While each sector is
looked at individually, the interlinkages and
interdependencies of these themes cannot be
emphasized enough.
3.2 Renewable energy, water
and related infrastructure
Despite significant progress made in
development outcomes across much of Africa
over the last decades, still many communities
across the continent are lacking access to
basic necessities. The Nairobi Declaration
provided the following stark reminder of the
current state of this issue. It states:
“…only seven years remain to achieve
the Sustainable Development Goals of
the 2030 Agenda and [we] note with
concern that 600 million people in Africa
still lack access to electricity while 970
million lack access to clean cooking; and
418 million people still lack a basic level
of drinking water service.”48
The Nairobi Declaration redefines the balance
between economic growth and the need to
address gaps such as these, alongside the
need for environmental mitigation, as outlined
in the previous section. This is the critical
challenge for the African continent now and in
the coming decades: on the one hand working
to eliminate this access gap to basic needs
such as clean water, energy and clean cooking
17
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
fuels; and on the other hand, ensuring that
growth is heavily linked to green sectors, so
that it is sustainable far into the future.
RENEWABLE ENERGY
The hard-won decision at
COP28 to shift away from
fossil fuels has profound
implications for Africa.
The continent possesses
abundant potential for
renewable energy generation, both for its
own consumption as well as to power green
manufacturing for companies looking to lower
their global emissions. Yet, while the transition
is well underway across the continent,
the scale and pace of investment must be
increased if progress is to be accelerated. As
economic growth and standards of living rise,
in addition to increasing urbanization, overall
energy demands are forecast to increase
rapidly. Meeting the vastly increased demands
while continuing to reduce the reliance on
fossil fuels in the continent’s energy mix is a
critical challenge for African nations moving
forward. Yet, considering this alongside the
potential for renewable energy to drive green
manufacturing makes for a powerful investment
case.
49 Galal, S., 2023, ‘Renewable Energy in Africa – Statistics and Facts’, Statista (link).
50 Galal, S., 2023, ‘Renewable Energy in Africa – Statistics and Facts,’ Statista (link).
18 51 Schroders, 2017, The Solar Revolution in Africa’ (link).
As the International Energy Agency (IEA) graph
in Figure 4 shows, when looking at total primary
energy usage across the continent in 2020,
traditional use of biomass remains the single
largest fuel source, with fossil fuels, such as oil,
coal and natural gas, also contributing much
of the continent’s energy usage. The share of
renewables has grown significantly from 2010
levels but remains comparatively small, at just
18 percent.49 While the scale of the challenge
is vast, progress is being made and several
highly ambitious large-scale renewable energy
projects are underway across the continent. A
prime example of this is the Noor Ouarzazate
Solar Complex in Morocco, which is the world’s
largest concentrated solar power plant. This
public-private partnership (PPP) is expected to
cost $9 billion upon completion and provide
clean energy to millions of Moroccan homes
and businesses. To read a full case study of
this project click here.
In terms of renewable energy generation
by type, with Africa being home to some of
the largest rivers on Earth, unsurprisingly
hydroelectricity makes up by far the largest
share of renewables. As can be seen in Figure
5 below, solar, wind and geothermal all trail
far behind.50 However, it is worth noting that
while rates of hydroelectricity are highest, the
costs of solar energy generation are rapidly
decreasing,51 and uptake is steadily increasing
across the continent. This is a trend that is likely
to continue, given Africa’s huge solar energy
generation potential.
 3. Overview of the current state of green business in Africa

FIGURE 4: Total primary energy supply by fuel and region in the SAS52

Africa North Sub-Saharan South

Africa Africa Africa
50 50
Traditional use
of biomass
40 40
Renewables

30 30 Nuclear
EJ

EJ

20 20 Natural gas

10 10 Oil

0 0 Coal
2010 2020 2030 2020 2030 2020 2030 2020 2030

IEA. All rights reserved.

Renewables grow rapidly in all regions to 2030, though oil and gas
continue to dominate the fuel mix in North Africa and coal in South Africa

FIGURE 5: Electricity generation from renewables in Africa from 2010 to 2021,

by energy source (in terawatt hours)53

175
Electricity generation in terawatt hours

150

125

100

75

50

25

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Hydroeelctricity Geothermal Solar Wind Biomass and waste

52 IEA, 2023, ‘The Role of Critical Minerals in Clean Energy Transitions’ (link).
53 Galal, S., 2023, ‘Renewable Energy in Africa – Statistics and Facts’, Statista (link). 19
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024

Africa’s rich mineral base provides additional
opportunities with respect to renewable
energy. Africa is already the world’s top
producer of many critical minerals essential to
renewable energy technology. The continent
has vast stores of copper, bauxite, chromium,
iron ore, platinum group metals, cobalt and rare
earth metals.54 Demand for these materials
has already increased many times over during
the last decades, but as the energy transition
gathers pace, this is set to continue. According
to the IEA, global demand for rare-earth metals
critical to clean energy technologies will
increase twenty-fold for nickel and cobalt by
2040 (relative to 2020), 25-fold for graphite and
as much as 40-fold for Lithium.55 The market for
material inputs for green technologies already
stood at $320 billion in 2022.56
Africa’s vast renewable energy potential, as
outlined above, also provides a considerable
competitive advantage for turning these mineral
inputs into higher value-added products for
export. Leveraging the potential for renewable
energy to drive processing of these minerals
would allow this to happen in a greener fashion
and would support the investment case for
renewables on the continent. For example, in
September 2023, African Rainbow Minerals
and SOLA Group secured ZAR 2.5 billion to
finance a solar power plant which will provide
energy to platinum mining operations via a
long-term purchase agreement, leveraging the
national grid and generating 270 GWh of clean
electricity annually.57
More broadly, ‘productive use leveraging solar
energy’ (PULSE) opportunities are expanding
rapidly, with increasing uptake of renewable
energy-enabled tools in horticulture,
agriculture and manufacturing across the
continent.58 Africa can and should become a
global leader in this space, though this is not
without risk. The economic benefits of utilizing
these vast reserves must be balanced with the
considerable environmental impacts of large-
scale mining. Efforts should be taken to ensure
that as the renewable energy industry grows
with global demand, Africa leads in relation to
sectoral environmental standards and human
rights protection.

54 Baker McKenzie 2023, ‘Africa: Increasing demand for the continent’s critical mineral reserves to boost energy transition’
(link)
55 IEA 2023, ‘The Role of Critical Minerals in Clean Energy Transitions’ (link).
56 Todorović, I., 2023, ‘IEA: Demand for critical minerals to spike 3.5 times by 2030,’ Balkan Green Energy News (link).
57 Mining Review Africa, 2023, ‘R2.5 billion solar power plant financed for African Rainbow Minerals’ (link).
58 Lighting Global, 2019, ‘The Market Opportunity for Productive Use Leveraging Solar Energy (PULSE) in Sub-Saharan Africa,
20 World Bank Group (link).
 3. Overview of the current state of green business in Africa

Green mineral value chain in the Democratic Republic of the Congo and Zambia
International Energy Agency (IEA) forecasts indicate that if countries are to meet their climate
pledges, demand for critical minerals will double between now and 2030, and more than triple by
2050. The Democratic Republic of the Congo and Zambia both possess vast quantities of many of
the needed minerals. As such, they have become and will continue to be of huge global strategic
significance for the energy transition.

A strategic initiative between the two nations – brokered by the United States – aims to break
barriers to trade between the countries and establish a cross-border Special Economic Zone.
The ambition of this initiative is that the countries develop an entire value chain for green mineral
extraction, refinement and green industrialization more broadly. For example, the countries will
be involved in the production of car batteries for electric vehicles, instead of simply exporting raw
materials. This would represent a major shift towards higher value added goods and can have huge
macro-economic significance for the countries and the broader region.

Significance: Though it is still early, with a Memorandum of Understanding signed only in 2022, if
executed effectively, this initiative has the potential to transform the region into a green industrial
power. Indeed, it is likely that numerous other such opportunities exist across the continent, and
that the right regulatory initiatives and investment could catalyse these.

For more information on this important development, see:

UNECA article;
Carnegie Endowment for International Peace article; and
AfDB article.

WATER contributing to the degradation of existing

The Nairobi Declaration
states that 418 million
people across Africa
still lack access to basic
levels of drinking water,
representing 34 percent of
the overall population. Of course, this deficit is
not evenly geographically spread across the
continent. Countries such as Egypt have as
high as 99 percent access to clean water59 and
others, such as the Central African Republic,
have access levels as low as 37 percent.60
Access to clean water is a complex issue,
with multiple factors and causes. On the one
hand desertification, land-use change and
climate change are contributing to lower water
availability in general. On the other hand,
agricultural pollution, plastic pollution and
inadequate waste management systems are
water sources.
There is also an important gender component
to water issues, with the burden of physically
strenuous and time-consuming low-
tech methods of water collection being
disproportionately borne by women and
children. As such, United Nations research
makes the case that improving water access
and infrastructure has significant beneficial
impacts on gender outcomes.61
The critical challenge of improving this situation
requires both public and private investment
and innovation across the continent and at
great scale and pace. Numerous examples of
such investments exist, for example, the Kigali
Bulk Water Supply Project – featured here in
the case study section of this report – which
is Rwanda’s first large-scale independent

59 Arab Weekly, 2022, ‘Egypt and Tunisia rank as the most water-secure countries in Africa’ (link).
60 UNU-INWEH, 2022, ‘500 Million People Live in 19 African Nations Deemed Water-insecure’ (link).
61 Mwongera, C., 2022, “Empowering Women to Boost Africa’s Water Security,” Africa Renewal (link). 21
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
water production project. This PPP mobilized
$61 million for the comprehensive design and
construction of the facility, which supplies
500,000 people with clean water services
across the region.
While public investment is clearly required
to expand water infrastructure across the
continent, there are also a myriad of ways that
innovative green businesses across Africa can
operate in the space. Moreover, solutions that
aid the water challenge need not be strictly
limited to the water sector. Technological
innovations in agricultural technologies and
methods, single-use plastic reductions, waste
management, etc. can all contribute to easing
the stress on water systems and improving
water access across the continent.
LiquidGold
LiquidGold is a high-growth South-African
company focusing on circular sanitation
solutions. The company produces a range of
products aimed at preventing environmental
damage, such as water pollution, reducing
the need for harmful chemical inputs and
reducing the costs of operating waste
sanitation systems.
A prime example of one of their circular
solutions is an Automated Nutrient Recovery
System which recovers high value fertilizer
from toilet resources. According to their
website, they have over 7,000 active units
in the marketplace thus far, with an annual
savings of 650 million litres of water.
LiquidGold is a prime example of an instance
in which the private sector has innovated to
provide solutions where public infrastructure
has been underdeveloped and inadequate.
As a result of this company’s products,
areas underserved by publicly run water
infrastructure can benefit from improved
environmental and health outcomes at
reduced costs.
62 International Monetary Fund (IMF), 2020, ‘Powering Africa with Solar Energy – IMF F&D’ (link).
22 63 Ibid.
INNOVATION PATHWAYS
Renewable energy: Improve the continent’s
energy mix and upscale local technology
production
Renewable energy has a vast potential
to support Africa’s economic and social
development. Yet, to fully realize this potential,
Africa needs to successfully execute on two
critical pathways: 1) the transformation of
the continent’s energy mix in a timely and
affordable manner; and 2) the upscaling of local
technology production. Africa should not simply
become an importer of energy technologies.
Rather, it must utilize the competitive
advantages it possesses to advance its own
clean technology development capabilities
and become a global leader in the space.
Currently, Africa’s energy mix remains
heavily dependent on coal, oil and traditional
biomass.62 Increasing clean electricity
generation and decreasing the carbon footprint
of the energy sector will require African
economies to put significantly more resources
and capacity into driving this transformation.
Capital flows that are currently going towards
fossil fuel infrastructure and extraction must be
redirected towards renewable sources, such
as solar and wind, which will inevitably play an
increasingly pivotal role in Africa’s electricity
generation.
Recent projections suggest that by 2050, Africa
could have as much as 70 percent of installed
capacity coming from solar, 20 percent from
wind and 10 percent from hydropower.63
Natural gas holds great promise in providing
energy support in the short to medium term
as the renewable energy market expands and
batteries improve
their storage
capacity and
become more cost-
effective. However,
this will not happen
20% 10% automatically. For
 3. Overview of the current state of green business in Africa
these figures to become a reality, bold action
and investments need to be happening now.
Given Africa’s abundant wind and solar
resources, green hydrogen can play an
important role in decarbonizing hard-to-abate
sectors.64 Global green hydrogen demand is
expected to increase sevenfold by 2050, in
large part due to rapidly decreasing production
costs and increased renewable capacity.
Recent research indicates that by shifting
towards solar and wind energy, specializing in
green hydrogen and exploring other energy
sources like bioenergy and geothermal
resources, Africa could substantially reduce
its energy sector’s carbon intensity. According
to McKinsey, by following this strategy, energy
emission intensity could plummet by 45
percent by 2050.65
North and Southwest African nations possess
both the necessary natural resources and
geographical characteristics to be highly
competitive in the production of green hydrogen
for both local and global consumption. The
Africa Green Hydrogen Alliance (AGHA), formed
in 2022, is an indication that many countries
are intending to execute on this opportunity.
AGHA is a transnational organization with
the goal of promoting partnerships among
African hydrogen-producing countries.66 If
these ambitions can be realized, the African
continent could become a major green
hydrogen exporter.
Beyond boosting renewable energy
generation capacity and investing in green
hydrogen, steps should be taken to ensure
that Africa does not remain dependent on
imported renewable energy technologies,
and by extension become highly vulnerable
to events such as supply chain disruptions.67
Solving this problem necessitates upscaling,
64 Ibid.
65 McKinsey & Company, 2023, ‘Green energy in Africa presents significant investment opportunities’ (link).
66 Ibid.
67 Gebreslassie, M.G., Bahta, S.T., Yacob Mulugetta, Tsegay Tesfay Mezgebe and Hailekiros Sibhato, 2023, “The need to
localize energy technologies for Africa’s post COVID-19 recovery and growth,” Scientific African (link).
68 Ibid.
69 Ibid.
70 This product is composed of fused nano-structured, non-woven material incorporated in functionalized carbon nanotubes.
upskilling and increasing funding for local
manufacturing industries, such that they have
the necessary infrastructure, know-how and
materials to manufacture these technologies.68
As will be illustrated late in this report, the
efforts of the Moroccan government to put in
place supportive renewable energy policies
represent a good example of how policy-
makers can prioritize interventions and
regulations that stimulate the economic and
political conditions for the development of
local manufacturing facilities.
Water: Develop tech-based innovative service
delivery models to ensure access to clean
water and sanitation for communities and
increase the efficient use of water resources
As shown in the LiquidGold example, new
technologies can play a major role in improving
water provision and sanitation services in
Africa. The use of automated nutrient recovery
systems (like LiquidGold), solar-powered
ground pumps and 3D-printed filters all are
examples of technologies that have the
potential to improve Africa’s water treatment
infrastructure and, therefore, meet water
supply demands.69
Other interesting examples from the continent
include Flowered, a company operating in
Ethiopia, Kenya and Tanzania that developed
and is implementing innovative defluorination
technologies for drinking and irrigation water.
MadForWater is an organization based in
Egypt, Morocco and Tunisia that is focused
on a number of tech-based management
instruments and systems for improving
wastewater treatment. Seldom Water Africa,
a company based in South Africa, specializes
in nano-mesh filters that eliminate bacteria,
viruses and cysts in water.70
23
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
Using such pioneering technologies and the
related implementation of more efficient tech-
based monitoring and reporting activities, it
will be possible to improve data collection
practices in the water sector and, consequently,
ensure better management of water sources.
Waste management: Embrace circularity and
technology innovation to protect the national
environment
Many African countries have taken positive steps
towards adopting innovative waste disposal
infrastructure and management technologies.
An excellent example is the decision taken by
the Ethiopian government in 2017 to transform
the Koshe dumpsite into a waste-to-energy
facility. The facility is capable of processing and
incinerating more than 1,400 tonnes of waste
per day. Nearly 80 percent of Addis Ababa’s
waste is now redirected for energy production,
contributing about 30 percent of domestic
electricity needs. The Kenyan government has
also launched initiatives in collaboration with
private sector actors to adopt cutting-edge
technologies on a large scale for purposes
of waste management. Local authorities
partnered with Taka Taka, a company engaged
in numerous innovative waste management
activities, to make waste collection services
more accessible and affordable to poorer
communities and to bolster recycling efforts to
encompass approximately 90 percent of the
total waste collected. This initiative has also
created new jobs, particularly among women
and young people.71
Several South African waste disposal and
management companies, namely Mpact
Waste Management, EnviroServ and Oricol,
have invested in state-of-the-art technologies
to streamline waste collection processes.
Technologies used include smartphone
applications that facilitate swift service
requests, additional pickups and seamless
bill payments through push notifications.
These technological advancements facilitate
71 AUDA-NEPAD, 2021, ‘Achieving Water Security in Africa: The Role of Innovation and Emerging Technologies’ (link).
72 Ibid.
24 73 Ibid.
cost-effective and efficient waste collection
practices, enhance waste data collection,
analysis and management and foster
collaborative partnerships between public and
private entities.72
For a more detailed example of how the
private sector has contributed to improved
waste management through the development
of innovative technological solutions, see the
Sistema.bio case study here. This small but
rapidly growing company manufactures and
distributes top tier biodigesters that allow
farmers to convert farm waste into both clean
energy and fertilizers. Despite only being
founded in 2020, they are already serving
53,200 farms globally. Their technology
positively impacts a number of critical areas,
including waste management, clean and
affordable energy and food security.
Transport: Regional and continental shift
towards sustainable and smart alternative
transportation and vehicles
Africa can and should embrace the transition
towards sustainable electrified transportation
systems including cars, mass transport systems
and public transport. For this to be achievable,
new technologies must be utilized strategically
to aid transport services in becoming more
cost-effective, efficient, inclusive, dependable
and secure. Cutting-edge tools, such as
big data analytics, the Internet of Things
(IoT), Geographic Information System (GIS)
tracking and mobile payment systems provide
distinct opportunities for addressing various
challenges associated with electrification of
the transportation sector.73
Indeed, digital solutions are already gaining
traction in several key areas, such as the
implementation of bus rapid transit (BRT)
systems, the expansion of e-mobility platforms
and the adoption of digital solutions in
multiple African cities. The ongoing growth
of mobile connectivity is poised to play a
 3. Overview of the current state of green business in Africa
pivotal role in expediting the digitization and
the electrification of transport across the
continent.74
Leveraging these types of technologies also
offers governments, development partners
and private stakeholders the opportunity to
combine their efforts to create the ecosystems
necessary for widespread adoption of electric
vehicles in sub-Saharan Africa.75 This will
include enhancing local electric vehicle
manufacturing, developing a more extensive
charging infrastructure network, advocating
for the adoption of fuel-efficient vehicles and
establishing local facilities for automotive
recycling and repurposing. To mitigate
concerns related to the limited range of electric
vehicles, it will be important to build stable
electrical supply and charging infrastructure
well in advance of anticipated demand
growth.76 Electric vehicle companies should
also explore investing in Africa-developed
product innovation to tailor electric vehicles
based on unique local needs and conditions.
An excellent example of a sustainable, inclusive
and soon-to-be electrified transportation
solution is OX-Delivers. This startup focuses
on a transport-as-a-service model and has
designed vehicles that are optimized for
rural conditions across Africa where vehicle
ownership and access is often a challenge.
Though the project is early stage, it is
progressing well and holds huge promise. To
read more about this company, click here.
Telecommunications and digital
infrastructures: Expansion of access and
quality of sustainable digital tools
Given the role that telecommunications
technology plays in infrastructure platforms, the
leading emerging economies in Africa should
exploit their rapid ongoing development to
74 Ibid.
75 Mobile for Development, 2023, ‘Powering Mobility: The rise of digital transportation in Africa’ (link).
76 Ibid.
77 African Scalecraft, 2013, ‘Innovation Infrastructure’ (link).
78 Wilson Quarterly, 2023, ‘Investing in Accessible Infrastructure in Africa’ (link).
79 Kuyuro et al., 2023, ‘Reimagining economic growth in Africa: Turning diversity into opportunity,’ McKinsey Global Institute
(link).
improve and expand their infrastructure sector.
Digital technologies focused on high-speed
internet, mobile communications, computer and
software engineering and telecommunications
networks play a fundamental role in the current
infrastructure ecosystem and should be
prioritized. They are also a prime example of
where African countries have the opportunity
to ‘leapfrog’ obsolete technological steps
undergone on other continents.77
The expansion and fortification of new
infrastructure projects across the continent
can happen through the implementation of IT
tools, like data centres and cloud computing,
which can allow countries to fully unlock
the vast potential of data analytics, artificial
intelligence tools and cybersecurity services.
Several companies, such as MTN Group, Airtel
Africa, Safaricom and Globacom, have invested
in sophisticated communications infrastructure
and developed new technologies that facilitate
the creation of an interconnected infrastructure
ecosystem within their operations. Moreover,
the development of robust and interconnected
ecosystems such as these necessitates
concerted efforts to bring together different
organizations, such as technical universities,
corporate partners, mentors, ecosystem
builders, angel investors and governmental
support.78
3.3 Agriculture and food
production
The importance of agriculture to African
economies and societies cannot be
underestimated. As stated earlier in this report,
in 2023, agriculture remains the single largest
sector by employment, providing jobs for 49
percent of the workforce.79 While it is true
that a long-term shift away from agriculture-
dominated economies towards services and
manufacturing is well underway, this is a
25
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024

gradual process unfolding over many decades.
As Figure 6 below shows, many countries
remain and will continue to remain, dominated
by their agricultural sectors. Unsurprisingly the
significance of agriculture varies from region
to region, with it playing a minor role in many
North African economies (with some notable
exceptions such as Morocco) and a major role
in many West and East African countries.
The negative environmental impacts of modern
agricultural systems are well documented
and significant, ranging from excessive water
consumption, soil degradation, water pollution,
land-use change, biodiversity loss and
greenhouse gas emissions. These impacts
are all present to varying degrees in different
regions across Africa. For example, irrigated
agriculture worsens situations of extreme water
scarcity in arid regions, such as North and South
Africa and some West African countries.80 On
the other hand, in tropical regions such as the
Democratic Republic of the Congo – home to
the second largest tropical forest area globally
– biodiversity loss because of deforestation for
agriculture is a much more significant threat.81

FIGURE 6: Agriculture as a share of GDP in African countries82

Countries GDP share of agriculture, 2022 Global rank Available data

Ethiopia 37.64 1 1981–2022

Mali 36.42 2 1967–2022

Comoros 36.41 3 1980–2022

Liberia 36.19 4 2000–2022

C.A. Republic 29.33 5 2009–2022

Burundi 27.57 6 1970–2022

Guinea 27.32 7 1986–2022

Benin 26.9 8 1960–2022

Rwanda 24.89 9 1965–2022

Tanzania 24.27 10 1990–2022

Uganda 24.06 11 1960–2022

Nigeria 23.69 12 1981–2022

Chad 22.6 13 1960–2022

Gambia 22.55 14 1966–2022

Madagascar 22.4 15 1966–2022

Malawi 21.76 16 1980–2022

Kenya 21.17 17 1960–2022

Burkina Faso 20.4 18 1960–2022

Mauritania 19.2 19 1961–2022

Ghana 18.78 20 1960–2022

80 Kuzma, S., Saccoccia, L., and Chertock, M., 2023, ‘25 Countries, Housing One-quarter of the Population, Face Extremely
High Water Stress’ World Resources Institute (link).
81 WWF, 2020, ‘Deforestation Fronts: Key Facts (link).
26 82 The Global Economy, 2023, ‘GDP Share of Agriculture – Country Rankings’ (link).
 3. Overview of the current state of green business in Africa

These specific environmental impacts Indeed, already a number of powerful

contribute to the worsening of climate change,
which in turn creates a negative feedback loop
that amplifies the initial impacts and leads to
worsened food security across the continent.83
If current trends continue, the long-term outlook
is bleak: World Bank forecasting suggests
that sub-Saharan Africa is set to become the
most food insecure region globally, as the
population continues to grow and levels of
arable land continue to decline (by as much
as 20 percent by 2080).84 Given these stark
predictions, the necessity for transforming the
agricultural sector across the continent cannot
be understated.
The question of what ‘sustainable agriculture’
means and the extent to which it is already
present across the continent is highly complex.
The United States Department of Agriculture
(USDA) defines sustainable agriculture
as “farming in such a way to protect the
environment, aid and expand natural resources
and to make the best use of nonrenewable
resources.”85
Given the environmental issues associated
with the current agricultural system in Africa,
‘green businesses’ may be considered those
companies that are providing goods and
services that contribute to the reduction or
elimination of negative environmental impacts.
United Nations Environment Programme
(UNEP) research notes that opportunities
in this space include agribusiness digital
technologies, precision farming technologies,
market differentiation through organic
processes, cooperative structures, etc.86
examples of smart agriculture technologies
being pioneered by African companies exist.
The Esoko company has developed an online
agricultural marketing and communication
platform. The platform allows farmers to be
connected to the wider agricultural economy in
a streamlined and cost-effective way. Among
other things, farmers can interact directly with
buyers and access market information, credit
and insurance services. (To read more about
this company in the case study in section 7,
click here.)
Innovations in agricultural technologies and
farming methods are developing rapidly and
hold huge potential to transform agricultural
systems in Africa and globally. However, it is
safe to say that currently, adoption across the
African continent is still in its early stages. The
question is how the adoption of technologies
and new practices can be scaled up and
accelerated. The green hydrogen project
highlighted below is a good example of both
integrated supply and demand thinking as well
as a reflection of how interconnected many
of these sectors are – in this case renewable
energy being used to drive creation of fertilizer
for the agriculture sector.

83 Carleton, E., 2022, ‘Climate change in Africa: What will it mean for agriculture and food security?’ International Livestock
Research Institute (link)
84 FAO, 2009, ‘Climate Change in Africa: The Treat to Agriculture’ (link).
85 U.S. Department of Agriculture, 2023, ‘Sustainable Agriculture,’ National Agricultural Library (link).
86 UNEP, 2023, ‘Africa’s green business opportunities are abundant, UNEP study shows’ (link). 27
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
Sustainable agriculture: Hyphen
hydrogen energy
The Government of Namibia recently
approved their share of a $10 billion project
with the Hyphen Hydrogen Energy (Hyphen)
company to develop sub-Saharan Africa’s
largest initiative to produce green hydrogen.
This highly ambitious macro-scale project
has the potential to transform the country’s
economy and make Namibia a regional
leader in the field.
The project will develop wind and solar
plants with a total capacity of seven
gigawatts. The energy generated will be
used to produce green ammonia for use in
agricultural fertilizers. According to Hyphen,
“at full scale development, anticipated
before the end of the decade, the project will
produce 2 million tonnes of green ammonia
annually for regional and global markets.”
While this project is still in its infancy, it
provides an inspirational example of how
large-scale transformational projects can be
brought from vision to reality. Not only will
the project allow Namibia to become a global
leader in the production of green ammonia,
but it also has the potential to catalyse
sustainable growth in other sectors that rely
on ammonia as an input, such as agriculture.
For more information on this important
development, see the following links:
Clean Energy Wire article
Hyphen Hydrogen Energy article
EURACTIV article
INNOVATION PATHWAYS
Agriculture: Expand local climate-smart
agricultural and agri-food practices
Africa’s vast agricultural sector must embrace
and pioneer innovative technological
solutions if it is to be globally competitive,
while simultaneously ensuring positive social,
87 Ibid.
88 World Bank, 2023, ‘Scaling agriculture science and innovation for a climate-resilient future in Africa’ (link).
28 89 International Union for the Conservation of Nature (IUCN), 2023, ‘Nature-based Solutions’ (link).
developmental and environmental outcomes.
Digital technologies have the potential to
dramatically improve existing farming practices
by enhancing labour and land productivity,
optimizing supply chain management,
fostering circular food systems, promoting
resource efficiency and enabling real-time
meteorological monitoring.87
The African smart agriculture sector is far from
reaching its full potential.88 However, numerous
examples exist of highly successful African
companies that show the efficacy of climate-
smart agriculture services. For example, the
Kenya-based agri-tech firm Apollo Agriculture
has created a technological solution that
increases farmers’ access to high-quality farm
inputs and credit opportunities. Agrimatic,
a north African agri-tech company, offers
innovative tools that can convert unsuitable
terrain into more productive and viable
agricultural environments.
These examples serve to illustrate the huge
variety of solutions that exists and can exist
within the agricultural space, ranging from
cropping systems, cutting-edge irrigation
methods, to refined agronomic practices and
accessible smartphone-based tools equipped
with advanced crop-scanning robots and
drones. A huge amount of progress is being
made. However, the scale of the challenges
posed by traditional agriculture cannot be
understated. Increased investment and
supportive policy and regulation are critical
to ensuring that innovation and change can
happen at the required scale and velocity.
3.4 Nature-based solutions
The International Union for the Conservation of
Nature (IUCN) defines nature-based solutions
(NBS) as “actions to protect, sustainably
manage and restore natural and modified
ecosystems that address societal challenges
effectively and adaptively, simultaneously
benefiting people and nature.”89 While this is
 3. Overview of the current state of green business in Africa

still in many ways a nascent space, the scale
of the opportunities cannot be understated.
Calculations from the United Nations
Environment Programme (UNEP) indicate that
restoring nature in Africa has the potential
to unlock a business value of $10 trillion and
create 395 million jobs by 2030.90
Currently, the vast majority of NBS projects – on
the continent, as well as abroad – are funded
by multi-lateral development banks (MDBs) or
grant funding. This is true on the macro scale,
with high-profile projects such as the ‘Great
Green Wall,’91 as well as on the micro-scale.
Determining the current scale of investment
in NBS in Africa is challenging and, as such,
few reliable sources exist. However, research
from the World Resources Institute created a
methodology for determining the scale of NBS
investments in MDB portfolios. Focusing on
the World Bank and AfDB, they found that over
the period 2012-2021, 46 projects amounting
to approximately $7.9 billion and 39 projects
amounting to approximately $4.2 billion
respectively were funded.92
In terms of what these projects are generally
comprised of, the World Resources Institute
review found that 31 projects where pure
‘green’ interventions and 54 were ‘green-grey,’
that is projects that contained elements of
both traditional built infrastructure and nature.
All investments that focused on urban flooding
and coastal erosion reduction were classified
as green-grey and all investments that focused
on fire-risk mitigation were purely green. All
other project categories were a mixture of
both.
Given that current levels of investment into
NBS globally are less than 50 percent of
what is required to meet climate and nature
targets,93 a clear need and huge potential
exists for the NBS space to dramatically scale.
While the space has been hitherto dominated
by development money, a critical aspect is
the question of how more private capital can
be invested. The voluntary carbon market
possesses clear potential in this regard, with a
current market value of $909 billion,94 of which
Africa makes up a tiny fraction of transactions.95
However, the future of this sector is currently
uncertain, with several high-profile scandals
questioning the credibility of the carbon market
in its current form.96
Nonetheless, the scale of the opportunity in
the NBS space cannot be understated and
Africa has considerable opportunity to exploit
the opportunity more fully. Indeed, there are
many examples of high-quality NBS projects:
for example, the Hongera reforestation project,
a large-scale carbon offsetting initiative which
focuses on the restoration of degraded and
cleared forest lands in Kenya. Over a seven-
year period, the project plans to plant over
16 million trees, providing substantial local
employment opportunities, infrastructure and
capital inflows to the region. For more details
on this case study, click here.
The emergence of nature markets as an asset
class is a highly interesting concept which
could provide significant drivers of value for
NBS projects. It is for this reason that African-
led programmes, such as the African Carbon
Markets Initiative (ACMI), are so exciting. The
initiative was started by the United Nations
Economic Commission for Africa (UNECA),
Sustainable Energy for All (SEforALL) and the
Global Energy Alliance for People and Planet
(GEAPP) and has a high-profile steering
committee comprised of leaders from across
Africa, CEOs and carbon market experts. ACMI

90 UNEP, 2023, ‘Africa’s green business opportunities are abundant, UNEP study shows’ (link).
91 UNCCD, 2023, ‘Great Green Wall Initiative’ (link).
92 Oliver, E., and Marsters, L., 2022, ‘Nature-Based Solutions in Sub-Saharan Africa for Climate and Water Resilience’ World
Resources Institute (link).
93 UNEP and ELD, 2022, ‘State of Nature Finance’ (link).
94 Ngila, F., 2023, ‘Carbon Trading Offers Rich Rewards for Africa,’ New African (link).
95 Mboya, T., 2020, Can Carbon Trading Work in Africa?’ Good Governance Africa (link).
96 Greenfield, P., 2023, ‘Revealed: more than 90 percent of rainforest carbon offsets by biggest certifier are worthless, analysis
shows,’ The Guardian (link). 29
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024

aims to create 300 million high quality credits
a year, leading to 30 million jobs and $6 billion
in new income.97
INNOVATION PATHWAYS
Nature-based solutions: Restoring ecological
landscapes and establishing advanced,
reliable and connected carbon market
products
Carbon and nature-based projects represent
a significant opportunity for African countries.
However, the voluntary carbon markets
are currently in flux. If Africa is to take full
advantage of afforestation, reforestation and
biodiversity conservation to create a nature-
positive pathway, recent events concerning
carbon markets provide valuable lessons.
Firstly, ensuring integrity and transparency in
the market should be the single biggest priority
of any policymaker, as projects characterized
by high levels of trust tend to attract more
investors and generate more returns.98
Secondly, African countries should strategically
employ technological solutions to reduce costs
and improve integrity in the carbon and nature
markets. Prime examples include remote
monitoring and imaging technologies that
enable the real-time verification and monitoring
of carbon projects, thereby diminishing the
possibilities of greenwashing and exploitation.
Also, automated carbon registry platforms
that facilitate the seamless operation of the
market, linking suppliers, intermediaries and
buyers and reducing the protracted timelines
associated with carbon project development
in Africa.99
A well-functioning and inclusive enabling
environment for NBS markets should also
include the preparation and implementation
of governmental regulations, which should
establish highly credible and transparent
processes for carbon credit registration,
commercialization and emissions reporting
and verification. Standardization of the key
elements of the market ensures credibility
of impacts and reassures investors. It also
contributes to lowering investment costs and
aids risk mitigation associated with project
development. These are all critical steps that
must be taken to successfully develop the
concept of nature as an asset class.100
3.5 Eco-tourism
Tourism is a hugely important component of
the African economy, with pre-pandemic (2019)
tourism accounting for 6.8 percent ($182.4
billion) of the region’s GDP.101 Furthermore, the
World Travel & Tourism Council estimates that
tourism in Africa could create 14 million new
jobs in the next 10 years, growing at a rate of
6.8 percent annually in comparison to overall
economic growth predictions of 3.3 percent.102
However, while it is clearly economically
important, the overall impacts of tourism on
the continent are mixed. For example, in many
instances it can lead to depletion of local
natural resources and waste pollution,103 as well
as significant increases in carbon emissions.104
The International Eco-Tourism Society defines
eco-tourism as “responsible travel to natural
areas that conserves the environment,
sustains the well-being of the local people
and involves interpretation and education.”105
Africa’s vast and varied stock of natural capital

97 Koigi, B., 2023, ‘The Promise and Scepticism Behind Africa’s Carbon Markets Initiative,’ Fair Planet (link).
98 Ahmed, A., and Camp, R., 2023, ‘Accelerating Africa’s Carbon Markets Can Power Sustainable Development’ RTI International
(link).
99 Ibid.
100 Ibid.
101 World Travel & Tourism Council, 2022, ‘Travel & Tourism Sector Across Africa Expected to Create 14 Million New Jobs Within
the Next Decade’ (link).
102 Ibid.
103 The World Counts, 2023, ‘Negative Environmental Impacts of Tourism’ (link).
104 Bekun et al., 2022, ‘Tourism-induced emission in Sub-Saharan Africa: A Panel Study for Oil-Producing and Non-oil-Producing
countries,’ Environmental Science and Pollution Research, volume 29, 41725–41741 (link).
30 105 Youmatter, 2020, ‘Eco-tourism: Definition, Meaning and Examples’ (link).
 3. Overview of the current state of green business in Africa
makes it an ideal candidate for eco-tourism
ventures. Done correctly, eco-tourism has the
potential to make significant contributions to
African economies (particularly economically
underdeveloped regions), contribute to climate
change mitigation and adaption and preserve
the continent’s biodiversity.
According to AfDB, Africa earned $38.5 billion
in ecotourism revenues in 2019 (COVID-19
has created anomalies in more recent data).106
While this is significant, the potential exists for
this to be much higher. In the coming years, as
the tourism industry continues to grow at a fast
pace, the crucial question will be to what extent
can this growth be dominated by credible eco-
tourism ventures versus traditional business
models and what can be done to encourage
and facilitate this shift. While this is an open
question, high-quality examples of eco-tourism
are readily available. For example, the Ol
Pejeta Conservancy, founded in 2004, has the
ambition of protecting a 360-square-kilometre
area in Kenya and funds these conservation
efforts through a combination of tourism
revenues and sustainably managed agriculture.
The project has been highly successful, self-
funding the majority of their capital needs,
employing large numbers of people and
delivering real conservation progress, such
as restoring a thriving population of 150 black
rhinos. This initiative is a prime example of how
conservation can co-exist and thrive alongside
revenue generating activities, thus maximizing
its long-term financial sustainability. For more
details on this important organization, see the
case study in Section 7.
106 AfDB, 2023, ‘Natural Capital for Climate Finance and Green Growth in Africa’ (link).
SANParks: Creating an ecosystem
for private sector participation in
eco-tourism
SANParks is a leading conservation authority
in South Africa and falls under the jurisdiction
of the Department of Environmental Affairs.
The authority is responsible for facilitating
nature-based tourism and conservation
across 19 national parks in seven of South
Africa’s nine regions, representing a
total land area of over 4 million hectares
(approximately 67 percent of protected areas
under state management).
SANParks is a primarily self-funded entity,
generating 80 percent of its operating
budget from tourism revenues. Thus, a
mutually beneficial relationship is established
through which tourism is dependent on
successful conservation and conservation is
dependent on responsible tourism.
In terms of stimulating green private
sector activities, SANParks is the authority
responsible for regulating and facilitating
green business activities with regards to both
eco-tourism and conservation. They offer
licenses for tourism companies and related
economic activities and engage in extensive
procurement, stimulating the creation of
whole economies built around landscape
conservation.
For more information see: SANParks website.
31
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024

INNOVATION PATHWAYS Indeed, Africa’s development trajectory may

Eco-tourism sector: Leverage the continent’s
eco-cultural heritage
The African tourism industry has the potential
to experience the same levels of innovation
observed in other sectors. However, despite its
considerable economic significance, tourism
currently lags behind other industries in terms
of the implementation of new and modern
solutions.107
The successful expansion of the eco-tourism
industry depends on the empowerment and
involvement of local communities to generate
inclusive benefits from eco-tourism projects,
both economically and socially. One example
is found in the box above, which describes
how SanParks is successfully facilitating
nature-based tourism and conservation across
19 national parks in South Africa, thus creating
a beneficial relationship between tourism and
nature conservation.
look nothing like that of highly developed
economies, given the unique opportunity
that the continent has to ‘leapfrog’ damaging
technologies and roll out new innovations
at speed. African entrepreneurs know this
and in recent years a huge amount has been
happening in the technology space. Just six
years ago, Africa did not have a single ‘unicorn’
(start-ups with a valuation > $1 billion); now
there are seven with more not far behind.108
In terms of the geographical distribution of
technology investment across the continent,
the bulk of start-up funding is situated in West
and East Africa, with modest growth in South
Africa and North Africa in recent years.109
Importantly, as IAP Research notes, single
countries account for the bulk of funding in
each region. These are Kenya in East Africa,
Nigeria in West Africa, Egypt in North Africa
and South Africa in Southern Africa.110

3.6 Technology and

next-generation solutions

Technology and next-generation solutions

can be considered a meta-category that
applies to all the sectors that have been
discussed previously and more. Within each
of the high impact green sectors discussed,
the potential for technological innovation and
new inventions to boost economic growth,
accelerate progress towards climate and
biodiversity targets and promote social welfare
is unbounded. While technology is of course
reshaping all regions of the world, a strong
case can be made that owing to the rapid
pace of societal change, economic growth and
development, Africa stands to gain the most
from recent technological advancements.

107 TechCabal, 2023, ‘Can technology rejuvenate Africa’s tourism industry?’ (link).
108 Kpilaakaa, J., 2023, ‘Why CV VC excluded Flutterwave, Chipper and Andela from African unicorn list.’ Benjamindada.com
(link).
109 Ibid.
32 110 Ibid.
 3. Overview of the current state of green business in Africa

FIGURE 7: List of African unicorns (updated 2023)111

Unicorn Last known valuation Year

Interswitch $1.0 billion 2019

Flutterwave $3.0 billion 2021

Opay $2.0 billion 2021

Wave $1.7 billion 2021

Andela $1.5 billion 2021

Chipper $1.3 billion 2021

MNT Halan $1.0 billion 2023

On the green-tech front, it was noted during
the case study selection exercises for this
report, that a huge number of the proposed
companies and projects were headquartered
in Kenya, a lower-middle income country with
relative political stability. Kenya is proactive
in pursuing green economic growth, having
put in place a ‘Green Economy Strategy and
Implementation Plan 2016-2030’ to boost
sustainable growth.112 The critical questions
are how countries like Egypt, Kenya, Nigeria
and South Africa can build on their successes
and how can other countries replicate what
has been achieved.

FIGURE
Funding 8: Funding
raised raised startups
by African by African start-ups
across 113
African countries, 2015–2022

14%
23%

17%

17%

29%

Egypt Kenya Nigeria South Africa Rest of Africa

Note: Only venture capital, grants, and non-equity assistance received by companies founded in 2010
or later are considered.
Source: Lay and Tafese (2023) based on Crunchbase data.

111 Ibid.
112 UNEP and Kenya, Ministry of Environment and Natural Resources 2016, Green Economy Strategy and Implementation Plan
2016 – 2030: A low carbon, resource efficient, equitable and inclusive socio-economic transformation’ (link).
113 UNIDO 2023, ‘How a new wave of tech startups is driving development in Africa’, UNIDO Industrial Analytics Platform (link). 33
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
As with other sectors, the scale of the
opportunities in Africa are large. For
example, Africa is still highly dependent on
the agriculture sector, as the single largest
employer. Research from the African Union
estimates that in this sector alone, utilizing
digital technologies optimally for insurance,
market access and knowledge transfer could
lift yields by as much as 60 percent, helping to
feed the continent’s rapidly growing population
as well as contribute to the efficient and green
growth of the sector.114
In terms of specific examples of African green
businesses that are focused on technology,
M-KOPA is an excellent case. This company
has created an asset financing platform that
provides banking and finance services to
segments of the population traditionally
unserved by formal financial institutions. The
platform blends several critical services into
one platform, allowing customers to access
credit, as well as purchase goods, among other
things. Founded in 2010, the company already
has a valuation of approximately $300 million.
To see the in-depth case study on M-KOPA,
see the case study in Section 7
34 114 Inamdar, A., 2022, ‘Powering Africa’s Green Growth – beyond adaptation and resilience’ UNFCCC (link).
BURN cooking stoves
BURN is a globally leading vertically-
integrated African company producing
high-tech environmentally-friendly cooking
stoves. The company sells approximately
200,000 units a month, manufactured in their
solar-powered factory in Kenya. BURN has
a successful carbon offset scheme in place
which has been instrumental in scaling the
business.
The BURN team, which is over 2,000 strong,
is 50 percent female. BURN has received
numerous awards for their work, including
the Bloomberg New Energy Finance
Award, Global Leap Awards and Ashden
International Award for green entrepreneurs
from developing nations.
BURN is a prime example of how private
sector innovation in Africa is capable of
producing innovative technologies that
help address the continent’s development
challenges – in this instance the
environmentally and socially harmful practice
of using wood as a cooking fuel.
For more information on this important
development see:
Company website
Article on the use of carbon credits for
scaling the business
 3. Overview of the current state of green business in Africa
INNOVATION PATHWAYS
Technology and next generation sector:
Optimizing performance and efficiency
New digital technologies, if utilized properly,
have the potential to generate a social and
economic revolution across Africa. Innovative
tools such as facial ID recognition, drones,
robots, blockchain and machine learning
systems are becoming increasingly widespread
in several African countries, as they allow for
novel solutions to longstanding challenges.115
Many examples exist of these technologies
being successfully applied. For instance,
Intixel, a health tech company based in Egypt,
is using artificial intelligence (AI) to improve
medical diagnostic products and services. A
Zambia-focused company called AgriPredict
is supporting farmers in healing problematic
plants through the use of a machine learning
system that provides an on-demand diagnosis
and potential treatments, thereby contributing
to improving crop yields and bolstering food
security. As mentioned in the box, another
interesting example is BURN, an African
company producing high-tech environmentally
friendly cooking stoves connected to a carbon
offset scheme. These cases fall under the
healthcare, energy and agriculture sectors, but
such applications are common in many other
vital economic and social areas.
Digitalization practices can also support
public authorities in several key areas. For
example, improving tax collection activities
while reducing corruption, decreasing security
threats with the use of surveillance cameras
and facial recognition technologies and
improving public services (e.g., transportation
and medical supply services) through the use
of drones.116 Overall, the influence of emerging
technologies on the development of African
public and private sectors is in constant
evolution.
115 Brookings, 2021, ‘The promises and perils of Africa’s digital revolution’ (link).
116 Ibid.
117 Business Insider Africa, 2022, ‘5 tech trends we expect to see in Africa in 2023’ (link).
118 Ibid.
In this context, internet adoption across
African countries represents a key driver
of prosperity and a clear indication of the
region’s technological maturation. Currently,
around 25 percent of the population enjoys
internet access, with projections suggesting
that approximately 75 percent of Africans will
become first-time internet users by 2030.117
Mobile technologies alone have already created
1.7 million jobs, contributing a substantial $144
billion to the continent’s economy (equivalent to
approximately 8.5 percent of GDP118). As more
African citizens and communities gain access
to internet and mobile services, the utilization
of digital financial services and e-commerce is
expected to increase in parallel.
3.7 Summary
Africa has huge potential to be a global leader
in green business. In terms of demographics,
Africa has the world’s youngest and fastest
growing population. The continent also
has huge natural capital, vast capacity for
renewable energy generation and competitive
advantages in numerous other sectors that
will be critical to the global energy transition,
such as green hydrogen and green minerals.
Africa also has a unique opportunity to skip
generations of technology development.
It is also notable, as has been demonstrated
through this section, that many innovative
private sector companies are driving the green
growth agenda forward. This is encouraging
and clearly shows the path that other
companies could follow in similar and related
fields. However, for these examples to become
mainstream and the norm throughout the
region, systemic barriers must be addressed,
significant investments must be made and the
necessary enabling environments must be
created to drive innovation.
35
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024

36

Photo credit: Ali Mkumbwa/Unsplash

 4. Market analysis – financing green business in Africa
4. MARKET ANALYSIS –
FINANCING GREEN BUSINESS
IN AFRICA
4.1 Current scale of financing
green business in Africa
According to estimates in a recent Climate
Policy Institute report,119 Africa requires an
annual capital commitment of $277 billion
to execute its NDCs and achieve its climate
objectives by 2030.120 However, the current
annual flow of climate finance to Africa stands
at a mere $29.5 billion.121 Even though African
governments have made commitments to
contribute $26.4 billion from domestic public
resources each year, existing debt burdens
and competing developmental priorities
arising from concurrent crises (e.g., inflation,
high interest rates) mean that governments find
it challenging to deliver this promised amount
of climate finance from public sources.122
Spending gaps differ across countries. As
outlined by the Climate Policy Institute, the
Southern African region faces the most
significant financial gap in absolute terms,
primarily due to South Africa’s large green
capital needs, totalling $107 billion annually. In
Central and East Africa, countries experience
the largest climate investment shortage as a
percentage of GDP,123 averaging 26 percent
and 23 percent, respectively. In contrast, North
African countries face relatively lower climate
investment gaps at 3 percent of GDP, but
they still require three to six times more green
capital than they currently receive. Against this
119 According to the IMF, as of 2022, 23 African countries find themselves in a state of debt distress or face high risk thereof.
120 Meattle et al., 2022, ‘Landscape of Climate Finance in Africa’, Climate Policy Initiative (link).
121 Ibid.
122 Ibid.
123 Therefore, not in absolute terms here.
124 These countries include Egypt, Morocco, Nigeria, Kenya, Ethiopia, South Africa, Mozambique, Cote d’Ivoire, Tunisia and
Ghana, ranked from the highest recipient to the lowest.
125 Ibid.
regional backdrop, it is notable that climate
finance is concentrated within a limited number
of countries, with 10 out of 54 African nations
absorbing over half of the total investments,
creating an additional challenge across the
continent.124
The private sector’s participation in the
continent’s climate finance activities stands
at just 14 percent, equivalent to $4.2 billion
in 2021.125 Investments are primarily directed
towards mitigation projects, constituting
81 percent of the total, mainly due to the
maturation of renewable energy technologies
and related commercial initiatives.
Climate finance can be considered a sub-
section of the overall potential demand for
financing of green activities across Africa.
However, it is the best quantified within the
broad space. The actual demand and need
for green investment are therefore higher than
that quantified above. Given the scale of the
financing gap relative to publicly available
funds, it is clear that private capital is needed
at scale to close this gap. Given the current
importance of public finance as a source of
green finance, both are looked at in detail
across this section to provide a picture of
current flows, mechanisms, instruments and
sources of finance to support green business
in Africa. The NDCs of African nations, as well
as their climate development plans and other
37
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
environmentally focused policy initiatives, act
as powerful markers of regulatory direction,
and thus as indicators of where there are
potential opportunities for the private sector to
invest.
PUBLIC AND PRIVATE FINANCE
As outlined above, green finance in Africa
is highly dominated by capital flowing from
public sources. Out of the total $29.5 billion
of financing flows for climate action in Africa
reached last year, public flows to green
finance totalled $25.3 billion (86 percent
of the total) and on average more than six
times the private finance ($4.2 billion).126 The
financial instruments employed by multilateral
development finance institutions (DFIs) to
channel their investments are fairly limited
in range. Loans played a predominant role,
accounting for 77 percent of the total funding,
with 47 percent at market rates and 30 percent
at concessional rates. Grants constituted 20
percent of the financing and equity financing
represented a mere 3 percent.127 Loans were
chiefly allocated to the energy sector, while
grants were primarily utilized for cross-sectoral
adaptation projects and those related to
agriculture, forestry and other land uses.128
It is noteworthy that public multilateral
institutions focus their financial flows in a select
number of countries, mirroring disparities
in the capacity of African nations to attract
international climate finance. DFIs directed
40 percent of their funding towards Egypt,
Ethiopia, Kenya, Morocco and Nigeria.129
Similarly, multilateral climate funds allocated
43 percent of their climate finance in Africa to
Ethiopia, Ghana, Nigeria, Senegal and South
126 Ibid.
127 Ibid.
128 Ibid.
129 Ibid.
130 Ibid.
131 Ibid.
132 Ibid.
133 Ibid.
134 Ibid.
38 135 Ibid.
Africa.130 These investment patterns are partly
influenced by broader investment ecosystems,
reflecting differences in socio-political and
economic stability, regulatory and governance
considerations, micro-economic conditions,
counterparty risks, capacity limitations,
transparency and accountability mechanisms
and perceived risks.131
Private investors are similarly focused on a
limited number of countries in Africa, primarily
those characterized by more sophisticated
and deeper financial markets. As mentioned
before, the tracking of private investments
in green projects in the region revealed a
total of $4.2 billion, which represents a mere
14 percent of the overall continent’s climate
finance flows.132 Other global regions exhibit
significantly higher levels of private climate
finance as a proportion of total climate capital:
Latin America and the Caribbean at 49 percent;
East Asia and the Pacific at 39 percent; and
South Asia at 37 percent. According to the
Climate Policy Institute, within Africa, 50
percent of private financing is generated by
domestic sources, while international investors
account only for 39 percent.133
From a sector perspective, energy projects,
which are typically characterized by a more
stable risk-return profile, garnered the largest
portion of private capital, amounting to 74
percent.134 This investment primarily originated
from corporate entities and commercial
financial institutions, taking the form of equity
contributions and non-concessional loans.
Another relevant sector is agriculture, forestry
and other land uses, which attracts reasonable
amounts of capital from institutional investors.135
 4. Market analysis – financing green business in Africa
4.2 Overview of financing
mechanisms for green
business in Africa –
Examples of good practices
To bridge the financing gap identified above,
a wide range of potential sources of financing
could be deployed. These instruments hold
the potential to be more significant routes
to scale by attracting large sums of private
capital, subject to barriers identified being
addressed. Some of the instruments enlisted
below have already been embraced by African
governments and market players, while other
solutions have only recently caught the interest
of these stakeholders. Taking inspiration from
some of the research work done by the Climate
Policy Institute,136 it is possible to provide
an overview of these instruments by using
the following categorization using selective
examples of good practices to highlight
opportunities for replication and scale.
UNLISTED FINANCIAL INSTRUMENTS
UNLISTED EQUITY AND DEBT
INSTRUMENTS:
These are financial instruments that are
not traded on a public exchange. This
could include equity and debt investments,
venture, construction finance, growth
equity, long-dated private equity and term
loans. Trading of an unlisted instrument
is done on the over-the-counter (OTC)
market.137 As such, they are often called
OTC securities. Market makers, or dealers,
facilitate the buying and selling of unlisted
securities on the OTC market.138
This type of instrument is characterized
by its use in countries with limited public
capital markets, as is the case in Africa.
More broadly, they can be creatively
combined to target new sectors and
overcome barriers, especially through the
use of blended finance approaches. Within
136 Blocher et al. 2022, ‘Climate Finance Innovation for Africa’, Climate Policy Initiative (link).
137 Over-the-counter (OTC) is the process of trading securities via a broker-dealer network as opposed to a centralized
exchange.
138 Ganti, A 2022, ‘Unlisted Security: Overview, Types, Risks’, Climate Policy Initiative (link).
139 UKStartups.org 2023, ‘Understanding 3 Different Government Grant Types for Small Businesses (SME’s)’ (link).
this context, DFIs can play a pivotal role in
the use of these mechanisms – through
their deployment, they can potentially
unlock local capital, mitigate currency risk
and ensure effective fund deployment.
GRANTS:
Grants refer to capital provided by an
organization (often a public body) to
another entity. This funding is usually for a
specific purpose and/or sector linked with
a clear public benefit. Unlike loans, this
capital is not expected to be paid back.
Grants play a fundamental role in Africa
by providing financing for critical early-
stage, non-commercial activities, including
supporting capacity-building programmes,
training initiatives, research and project
feasibility studies to develop the conditions
for a more attractive green business
environment.
Various grant types can enhance financial
sustainability and climate impact.139 These
include: non-repayable grants, whose
money does not need to be paid back;
partial contribution grants, whose money
does not have to be paid back but a
“partial contribution” to the funded activity
is asked to the organization that applied
for it in order to qualify for it; conditionally
repayable grants, whose money is subject
to specific conditions placed upon them.
These conditions can often be negotiated
before the grant is received. For example,
no repayment of the grant is required until
the company reaches profitability. Lastly
convertible grants, which offer the potential
for long-term returns by converting funding
into debt or equity capital once specific
project milestones are met).
39
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
Africa Climate Change Fund
climate-focused grants
The Africa Climate Change Fund (ACCF)
is a multi-donor trust fund, established to
provide small and medium-sized grants to
African governments, non-governmental
organizations and regional entities. Its
primary objective is to aid African nations
in transitioning towards low-carbon, green-
resilient growth while increasing their access
to climate financing.
ACCF was established by the AfDB in April
2014 and its inception saw a substantial initial
contribution of €4M from Germany, which
was followed by contributions from Belgium,
Canada and Italy. Since its establishment,
ACCF has provided grant support to 26
projects, amounting to a total of $15.89
million (current fund size is $25.7 million).
Projects primarily consisted of climate-
focused preparatory initiatives and small-
scale adaptation projects across several
African nations.
CAPITAL MARKET INSTRUMENTS
Capital market instruments include several
tools, such as thematic bonds, real estate
investment trusts (REITs) and yieldcos.
These instruments provide opportunities for
companies and projects to broaden their
financing options. As a means of broadening
access to institutional investors looking
for stable and predictable returns, these
instruments are particularly effective when
they are used to finance long-term already
operating assets with identifiable cash flows.
They can also be deployed to finance a
pool of different projects and, consequently,
reduce project-specific risks, offering investors
diversified investment opportunities and a
form of natural hedge.
40 140 UNDP 2021, ‘Thematic Bonds 101: Macro Environment, Market Dynamics and Steps to Issuance’ (link).
THEMATIC BONDS AND LOANS:
As explained by UNDP, thematic bonds
and loans are fixed-income instruments in
which proceeds are used to finance or re-
finance a combination of expenditures that
are aligned with particular development
objectives (green, social or sustainability).140
The intention of these instruments is to
mobilize investment demand for positive
environmental and social outcomes and
maximize the impact of proceeds.
Global financial markets have adopted
formal guidelines for the issuance of four
types of thematic bonds – green, social,
sustainability and sustainability linked.
Additional thematic bonds have emerged,
such as orange (gender) and blue (oceans),
which have similar definitions, but do not
yet have dedicated International Capital
Markets Authority (ICMA) guidelines (they
nonetheless follow best practices as
defined by ICMA).
Growthpoint Green Bond
In 2018, Growthpoint Properties, a real estate
investment trust based in South Africa,
achieved an important milestone by issuing
the very first (10-year) corporate green bond
on the African continent. The proceeds
from this bond are earmarked exclusively
for the financing or refinancing of both new
and existing environmentally friendly and
sustainable properties as well as initiatives
aimed at reducing their environmental
footprint. Through this issuance, Growthpoint
has also established a comprehensive
Sustainability Finance Framework – a guiding
document that delineates the eligible uses
of proceeds, the project selection and
evaluation procedures, the management of
funds and reporting mechanisms– serving
as a blueprint to support future green debt-
raising activities.
 4. Market analysis – financing green business in Africa
Standard Bank Green Bond
The issuance of a $200 million green bond
by the Standard Bank of South Africa marked
a significant milestone for both the bank and
the country. This green bond represented not
only the bank’s inaugural foray into this type
of financial instrument but also a pioneering
offshore green bond offering from an African
entity, ranking as one of the largest of its kind
in the continent.
Launched as a 10-year bond placement
in March 2020, it was secured through
collaboration with the IFC. The proceeds from
this bond are directed toward supporting
a range of environmentally sustainable
projects, spanning areas such as renewable
energy, energy efficiency, water conservation
and the creation of net-zero buildings. Listed
on the Sustainable Bond Market of the
London Stock Exchange, this bond is set to
finance initiatives estimated by the IFC to
decrease a significant 3.7 million tonnes of
CO2 emissions over a five-year span.
Women’s Livelihood Bonds
In 2017, Impact Investment Exchange
developed an innovative investment
instrument focused on gender equality and
impact, called the ”Women’s Livelihood Bond
1” (WLB1). This novel instrument became the
world’s first gender bond to be listed on a
stock exchange, which, in turn, led to the
development of a series of similar issuances.
Building on the successes of prior bonds,
including the recent ground-breaking
$50 million WLB5 (generally referred to
as the Orange Bond), Impact Investment
Exchange is poised to release WLB6 in
Q4 2023. Anticipated to have an issuance
size of approximately $100 million, WLB6
is designed to empower women and girls
across Africa and Asia while simultaneously
advancing climate action. The bond will align
with international standards, such as ICMA’s
Green and Social Bond Standards, United
Nations Sustainable Development Goal
Bond Impact Standards and the Association
of Southeast Asian Nations (ASEAN) Social
Bond Standards. The portfolio countries for
the WLB6 issuance include Cambodia, India,
Indonesia, Kenya and Vietnam, demonstrating
a comprehensive, multi-country, multi-sector
approach.
The success of the WLB series stands as a
testament to the fact that investing in women
generates strong social, environmental and
financial returns for investors.
41
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
REAL ESTATE INVESTMENT TRUSTS:
A REIT is a company that owns, operates
or finances income-generating real
estate.141 Similar to mutual funds, REITs
collect capital from several investors.
This procedure makes is possible for
individual investors to earn dividends from
real estate investments without having to
commit to buying or managing properties
themselves.142 REITs can provide an exit
opportunity for DFIs such that concessional
capital can be re-deployed into additional
early-stage projects.
YIELDCOS:
Yieldcos are entities designed to attract
local currency investment into renewable
energy assets. These assets largely consist
of solar and wind farms that have entered
into long-term energy delivery contracts
with customers.143
RISK MITIGATION INSTRUMENTS AND
GUARANTEES
These instruments are agreements through
which a commitment is made that a debt will
be repaid to a lender by another party if the
borrower defaults. In general, a third party,
acting as a guarantor, promises to assume
responsibility for a debt should the borrower
be unable to keep up on its payments to the
creditor. Guarantees can serve as internal or
external credit enhancement mechanisms.
There are several types of guarantees. For
instance, a partial credit guarantee is created
to absorb part or all of the debt service default
risk of a project, irrespective of the cause of the
default. It can be used for any commercial debt
instrument (e.g., loans, bonds) from a private
lender. A Political Risk Guarantee (PRG) covers
obligations triggered by a specific event and
is usually issued to protect investors against
a government obligation; thus, this type is
most suitable in a sovereign issuance. A PRG
offers protection against various political risks,
141 Chen, J., 2023, ‘Real Estate Investment Trust (REIT): How They Work and How to Invest,’ Investopedia (link).
142 Ibid.
42 143 Meattle et al., 2022, ‘Landscape of Climate Finance in Africa.’, Climate Policy Initiative (link).
including transfer restrictions (the borrower’s
inability to convert local currency into foreign
exchange or transfer the foreign exchange out),
expropriation, political violence and breach of
contract. PRGs are used quite commonly in
green energy and energy efficiency projects.
Another example of a guarantee is a contingent
loan, often used to backstop the main debt of
a project by providing a payment option for
specific scenarios. Scenarios include failure
of a government to obtain quality cash flows
(then the contingent loan is triggered and
investors are paid); first-loss provisions (any
device designed to protect investors if there is
a financial loss of security from loss of capital
that is exposed first); and insurance (financial
protection or reimbursement against various
types of losses).
Development Bank of Southern
Africa Climate Finance Facility
The Development Bank of Southern Africa
(DBSA)’s Climate Finance Facility (CFF) is a
lending facility designed to boost climate-
focused investments in South Africa by
addressing market barriers and acting as a
catalyst using a blended finance strategy.
The capital of DBSA’s CFF is strategically
deployed to attract private investments, with a
particular emphasis on infrastructure projects
for climate change mitigation and adaptation
that have the potential for significant climate
impact but struggle to secure market-rate
funding at scale without additional credit
support.
The total fund capacity consists in R2 billion,
and it acts as a catalyst by co-funding
projects in collaboration with developmental
and private sector financial institutions and
offering credit enhancement solutions in the
form of first-loss provisions, subordinated
funding and tenor extension, with options
extending up to 15 years.
 4. Market analysis – financing green business in Africa
BLENDED FINANCE
Blended finance instruments are innovative
financial mechanisms that promote sustainable
development through the utilizing of public
funds to mobilize private capital. These
instruments are designed to mitigate risks and
attract private investment in projects with social
or environmental benefits. A number of financial
Instruments can be blended together in a single
financial structure, as described below.
EQUITY INSTRUMENTS:
Equity investments in projects that share
ownership and returns with private
investors.
DEBT INSTRUMENTS:
Loans and bonds issued to attract private
capital for development projects.
GUARANTEES:
Guarantees are provided to reduce the
risks associated with investments, making
them more attractive to private investors.
TECHNICAL ASSISTANCE GRANTS:
Funds provided for project-related support,
helping to build capacity and reduce
implementation risks.
Ultimately blended finance addresses
unfavourable risk-return profiles in developing
countries, enabling investments in projects that
have positive social or environmental impacts,
but which would ordinarily not attract private
capital. Evaluating blended finance instruments
is essential to ensure their effectiveness for
attracting private investments and achieving
development goals.
OUTCOME-BASED FINANCIAL
INSTRUMENTS
Outcome-based financial instruments focus on
funding projects, companies or governments,
144 European Investment Bank (EIB), 2023, ‘Investing in nature-based solutions: State-of-play and way forward for public and
private financial measures in Europe’ (link).
145 Ibid.
146 International Capital Markets Authority (ICMA), 2019, ‘Sustainability-Linked Loan Principles’ (link).
147 Meattle et al., 2022, ‘Landscape of Climate Finance in Africa,’ Climate Policy Initiative (link).
based on their impact and the outcomes
they achieve. These instruments include a
mechanism for capital disbursement that
is contingent on performance in relation to
achieving particular climate and sustainability-
focused objectives. Such instruments can
be applied at various levels, including the
company, project and fund levels.
SUSTAINABILITY-LINKED BONDS
OR LOANS: With sustainability-linked
instruments, the interest payments are linked to
performance, so that issuers receive a discount
or pay a penalty depending on whether or not
they achieve a certain result.144 Such future-
looking and performance-based instruments
are designed to appeal to the issuer’s
sustainability ambitions by incentivizing them to
achieve maximum impact. This is done through
target setting that is benchmarked against key
performance indicator (KPIs). Tying the cost of
capital to performance against key indicators
means utmost vigilance is required with regards
to data methodologies and data collection
and ongoing monitoring and verification of
third parties.145 ICMA has produced extensive
guidance on the issuance of both thematic and
sustainability-linked bonds and loans.146
CARBON FINANCE: This type of finance
serves as a mechanism that allows operators of
climate mitigation initiatives to derive monetary
value from prevention and/or removal projects.
It does this through the creation of credits
for each unit of carbon emissions averted.
These credits can be traded on voluntary or
regulated carbon markets to stakeholders
seeking to offset their own carbon emissions
and achieve net-zero objectives. The proceeds
from the sale of carbon credits can enhance
the economic viability of climate projects,
especially in challenging markets such as those
related to agriculture, forestry and sustainable
land use.147 For an in-depth look at a specific
example of a carbon project, see the Hongera
reforestation project in the case study section.
43
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
Africa Renewable Fund
The Africa Renewable Fund is a $200
million private equity fund dedicated to
advancing renewable energy infrastructure
investments throughout sub-Saharan Africa.
The core mission of the Africa Renewable
Fund revolves around directing investments
towards renewable energy infrastructures that
utilize proven, successful and economically
viable technologies. These encompass
small and medium-sized hydroelectric, wind,
solar photovoltaic, geothermal and biomass
projects.
The fund strategy consists in achieving
positive returns through various exit
strategies, on an individual project basis or by
consolidating portfolios of assets.
STRUCTURED FINANCE
Structured finance refers to lending instruments
that work to mitigate risks related to complex
assets. Borrowers with complex needs, such
as corporations, seek structured finance to
deal with large, unique financial arrangements
that must satisfy a number of requirements. As
explained by the Corporate Finance Institute,148
the term “structured finance” is often used to
explain the bundling of receivables, although
it is more generally applicable to the offering
of a structured system to help borrowers (and
lenders) accomplish their end goal. The primary
goal is to facilitate financing solutions that don’t
involve free cash flow and to address different
asset classes across various industries, making
less risky products available to clients that need
them.149
A prime example of a structured finance
instrument is a public-private partnership
(PPP). This term refers to collaboration
between government entities and private
sector organizations to fund and execute
148 Corporate Finance Institute 2023, ‘Structured Finance’ (link).
149 Ibid.
150 Investopedia 2022, ‘Public-Private Partnerships (PPPs): Definition, How They Work, and Examples’ (link).
151 Ibid.
152 Ibid.
44 153 UNEP, 2023, ‘Africa Environmental Outlook for Business’ (link).
projects that have both public and private
benefits. These arrangements often involve
blended finance structures. PPPs generally
involve contract durations spanning 20 to 30
years, though it can be more.150
These arrangements blend contributions
from both the private and public sectors,
necessitating financial commitments from the
public sector and/or end-users throughout
the project’s lifecycle. The private partner
takes an active role in conceptualizing,
executing, enacting and financing the project,
while the public counterpart concentrates on
establishing and overseeing adherence to the
project’s objectives.151
The allocation of risks between public and
private partners is determined through a
negotiation process, ideally based on their
respective capabilities to assess, manage
and mitigate these risks, although this may
not always be the case.152 The case studies
section provides examples of PPPs in action,
for example, the Kigali Bulk Water Project and
the Noor Ouarzazate Solar Complex.
4.3 Key financial stakeholders –
Market overview
PUBLIC FINANCE AND ITS SOURCES
Public finance is the management and utilization
of financial resources by governments and
public institutions to fund various projects,
services and initiatives for the benefit of the
public. In the context of green finance, public
finance plays a crucial role in supporting
environmentally sustainable projects. The
sources of public finance can be categorized
into several main groups.153
 4. Market analysis – financing green business in Africa
The Upper Tana-Nairobi Water Fund
The Upper Tana-Nairobi Water Fund is a $20
million revolving fund that was developed to
provide a consistent water supply for over 9.3
million individuals while generating long-term
benefits for Kenyan businesses and farming
communities. Such funding is employed for
cost reduction in the provision of hydropower
and clean water while tackling challenges
related to water flow and soil erosion within
the Upper Tana River basin in Kenya.
Key strategies encompass the reduction of
sedimentation, enhancement of water flow
during dry seasons, increased efficiency
in agricultural water use, reforestation
and the delivery of economic and social
advantages to local communities, farmers and
businesses. Oversight of the Nairobi Water
Fund is entrusted to a steering committee
that combines the efforts of both public and
private stakeholders.
MULTILATERAL DONORS
Multilateral donors are international
organizations that provide financial support
to countries for development projects. In the
realm of green finance, key multilateral donors
include:
EUROPEAN UNION (EU):
The EU offers funding and assistance
to African nations through various
programmes, including the Africa
Renewable Energy Initiative (AREI), that
promotes clean and renewable energy
projects.
UNITED STATES OF AMERICA:
The US distributes development/green
capital through USAID. Their scope is
global in focus and covers a large number
of development and environmental issues.
GERMANY:
Germany contributes to green finance
initiatives through organizations like the
German Development Bank (KfW) and
the International Climate Initiative (IKI),
supporting projects worldwide aimed at
mitigating climate change and promoting
sustainable development.
UNITED KINGDOM:
The United Kingdom provides green
finance support through institutions like the
Department for International Development
(DFID) and the Green Climate Fund (GCF).
Their efforts encompass a wide range of
sustainable development projects across
various regions.
JAPAN:
Japan plays a significant role in green
finance through agencies like the Japan
International Cooperation Agency (JICA)
and the Japan Bank for International
Cooperation (JBIC). Their support extends
globally, focusing on renewable energy,
climate resilience, and environmental
conservation efforts.
MULTILATERAL INVESTMENT FUNDS
Multilateral investment funds utilise capital
from a range of sources, often development
financing from donor countries, but also in
many instances private capital. Some key
institutions include:
CLIMATE INVESTMENT FUND:
This fund supports climate-resilient and
low-carbon initiatives in developing
countries to mitigate climate change and
promote sustainable development.
GREEN CLIMATE FUND:
This fund mobilizes climate finance to help
African countries address climate change
challenges and transition towards low-
carbon economies.
GLOBAL ENVIRONMENT FACILITY:
This facility provides grants and financial
support for environmental projects, including
those related to biodiversity conservation
and climate change adaptation.
ADAPTATION FUND:
This fund focuses on financing projects that
enhance the resilience of African countries
to the impacts of climate change. 45
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024

INTERNATIONAL FUND FOR

AGRICULTURAL DEVELOPMENT:
IFAD supports agricultural projects and
initiatives that promote sustainable farming
practices and improve food security in
Africa.
The Climate Investment Fund’s
programmes in Africa
Since its establishment, the Climate
Investment Fund (CIF) has directed
investments toward 21 countries in Africa,
totalling approved funding of $1.62 billion.
The primary mission of the fund in the region
is to bolster the advancement of clean
technologies and climate resilience through a
range of diverse programmes.
CIF’s Clean Technology Fund, with an
allocation of $808.55 million, is playing a
pivotal role in supporting South Africa’s efforts
to expand its energy portfolio in alignment
with the nation’s climate change plan and
to address impediments in attracting both
public and private investments in wind, solar
and energy projects. Notably, the fund has
facilitated the realization of the first private
sector utility-scale concentrated solar power
plant in the developing world.
Another interesting example of CIF’s impact
can be found in its Forest Investment Program
(FIP), endowed with $265.08 million. This
initiative is empowering Mozambique in its
ambition to curtail deforestation and forest
degradation by a significant 40 percent by
2030. The Forest Investment Program is also
being implemented in Ghana, where it fosters
collaborative projects between the public and
private sectors and Indigenous groups in the
restoration of degraded forest landscapes.
The Scaling up Renewable Energy in Low-
Income Countries Programme, with a budget
of $253.74 million, is playing a pivotal role
in fostering the enabling conditions for the
expansion of the renewable energy sector
in Ghana. The programme has a specific
focus on mini-grids and standalone solar
photovoltaic systems.
46
The Green Climate Fund and FAO
Partnership for Africa
The Green Climate Fund (GCF) and the Food
and Agriculture Organization (FAO) of the
United Nations (FAO) are collaborating to
mobilize capital for investments in Africa’s
agriculture, forestry and fisheries sectors. The
projects within FAO’s GCF portfolio, valued at
$1.2 billion, encompass five impact-focused
initiatives in Benin, Congo, Côte d’Ivoire, the
Gambia and Sudan. These projects receive
$128.6 million in GCF grants and co-financing
and are primarily focused on enhancing the
resilience of rural communities, safeguarding
forests and rehabilitating ecosystems.
As a GCF Accredited Entity, FAO is also
actively engaged in providing essential
support to African stakeholders in formulating
funding proposals for high-impact adaptation
and mitigation initiatives. Furthermore,
FAO assumes the role of a Delivery Partner
for the GCF’s Readiness and Preparatory
Support Programme, which extends grants
to initiatives to increase institutional capacity,
enhance governance tools and fortify
programming frameworks in alignment with
NDCs, National Adaptation Plans (NAPs)
and other national strategies for addressing
climate change.
MULTILATERAL DEVELOPMENT BANKS
Multilateral development banks (MDBs) are
financial institutions that focus on promoting
economic development and sustainability.
In the context of Africa, the most prominent
multilateral development banks include:
THE WORLD BANK:
The World Bank funds a wide range of
development projects, including those
related to infrastructure, education,
healthcare and environmental sustainability.
It has a substantial focus on green and
sustainable development projects.
INTERNATIONAL FINANCE
CORPORATION (IFC):
A member of the World Bank Group, IFC
focuses on the private sector and provides
financial support to businesses and
 4. Market analysis – financing green business in Africa
initiatives that promote economic growth
and environmental sustainability in Africa.
AFRICAN DEVELOPMENT BANK
(AFDB):
AfDB is dedicated to enhancing economic
and social development in Africa,
including projects related to renewable
energy, infrastructure and agriculture.
The Moroccan Green Growth Plan is an
example of an initiative that they have
funded. To read more on this, click here.
ISLAMIC DEVELOPMENT BANK (ISDB):
IsDB supports member countries in
various sectors, including renewable
energy, healthcare and food security, while
adhering to Islamic finance principles.
INTER-AMERICAN DEVELOPMENT
BANK (IADB):
While primarily focusing on Latin America
and the Caribbean, IADB also contributes
to development initiatives in Africa through
sustainable projects in areas like energy
and transportation.
InfraCo Africa
InfraCo Africa is a private limited company
with the objective to combat poverty through
the facilitation of investments in infrastructure
projects across sub-Saharan Africa. The
organization focuses on investments (debt
and equity) into nascent projects and
pioneering solutions that need financial
support and have the potential to scale up
their activities.
InfraCo Africa operates as part of the Private
Infrastructure Development Group (PIDG),
structured with funding contributions from the
governments of the United Kingdom (FCDO),
the Netherlands (DGIS) and Switzerland
(SECO). Since its creation in 2004, InfraCo
Africa has garnered over $200 million in
funding and has successfully steered 29
projects to reach the stage of financial close.
International Finance Corporation’s
commitment in Africa
The International Finance Corporation (IFC)
has firmly established itself as a key player in
advancing private sector investments across
the African continent, channelling over $60
billion into African businesses and financial
institutions in nearly six decades, resulting in
a current portfolio that surpasses $12 billion.
In 2022, IFC’s investments in the continent
amounted to approximately $5.2 billion, of
which $2.6 billion was successfully mobilized
from other investors.
A recent collaboration between IFC and the
OCP Group, the world’s largest producer
of phosphate-based fertilizers, has taken
significant strides towards bolstering the
manufacture of low-carbon fertilizers through
solar energy. Thanks to this agreement,
IFC will give a €100 million green loan
to support the development of two OCP
solar power plants in Morocco, valued at
€360 million. These plants will provide
clean energy to OCP’s mining operations
in Benguerir and Khouribga, two pivotal
locations known for housing the world’s
most extensive phosphate reserves. The
energy generated by these plants will not
only be environmentally friendly, with zero
carbon emissions, but also less expensive
than conventional grid electricity, ensuring an
economical and sustainable energy supply.
BILATERAL TECHNICAL AND FINANCIAL
COOPERATION
Bilateral cooperation involves financial and
technical assistance provided directly from
one country to another. This can take the form
of government-to-government aid and official
development assistance (ODA) from countries,
such as the United States (the United States
Agency for International Development or the
United States International Development
Finance Corporation), Norway (the Norwegian
Agency for Development Cooperation), Sweden
(the Swedish International Development
Cooperation Agency) and Canada (the
Canadian International Development Agency).
47
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
AfDB Climate YouthAdapt
Programme
The African Development Bank (AfDB) has
recently unveiled a new financial facility of
$1 billion to guarantee climate financing for
youth-driven enterprises across the African
continent. Named YouthAdapt, this initiative
is a collaboration between the AfDB and the
Global Centre on Adaptation. It is specifically
designed to furnish financial support to young
micro, small and medium enterprises that
are actively engaged in pioneering Africa-
focused solutions geared toward climate
change adaptation and resilience.
The U.S. International Development
Finance Corporation role in Gabon’s
debt for nature swap
Gabon recently issued the first African debt-
for-nature swap. This innovative financial
instrument involves the acquisition of a
segment of a country’s debt by a financial
institution or specialized investor, which is
then substituted with more cost-effective
debt. Typically, this process is facilitated
with the support of a MDB, offering a ”credit
guarantee” or ”risk insurance.” The accrued
savings generated by this transaction
are earmarked to finance climate and/or
environmental projects in the country.
In Gabon’s case, the country initiated a
transaction to repurchase $500 million of
its international debt while simultaneously
issuing a similarly sized blue bond set to
mature in 2038. The brand-new $500
million 15-year blue bond was priced with an
interest rate of 6.097 percent, which proved
to be more economical than the original
bonds that were partially repurchased
(interest rates ranging from 6.625 percent to
7 percent). The United States International
Development Finance Corporation (DFC)
participated in the transaction by providing
political risk insurance to enhance the overall
creditworthiness of the new issuance.
48
SPECIALIZED DEVELOPMENT BANKS
Specialized development banks, such as
Kreditanstalt für Wiederaufbau (Germany),
Agence Française de Développement
(France) and British International Investment
(UK), provide financial support for specific
sectors such as energy, infrastructure and
environmental projects in African countries.
Agence Française de
Développement “Choose Africa”
Initiative
In 2018, Agence Française de Développement
(AFD), in conjunction with its private sector
arm Proparco, launched the initiative ”Choose
Africa” dedicated to bolster the development
of African small and medium enterprises.
So far, €2.5 billion have been allocated in
the form of loans and guarantees directed
towards local financial institutions to enhance
small and medium enterprise access to credit,
€470 million in equity investments, and €45
million designated for technical assistance.
This financial support is effectively executed
through almost 250 local partners, which
encompass banks, investment funds,
microfinance organizations, and business
incubators. This extensive network supports
over 26,000 small and medium enterprises
and micro-entrepreneurs.
Collectively, this initiative is expected to
create more than 1.5 million jobs, while 2,500
companies are expected to benefit from the
technical assistance.
DOMESTIC GOVERNMENT FUNDING
National budgets and development banks
within African nations can often play a
significant role in financing green initiatives
that align with their respective development
goals. Additionally, national funds are often
established to support specific projects,
including environmental conservation and
sustainability efforts.
 4. Market analysis – financing green business in Africa
South Africa’s Green Fund
Inaugurated in 2011, the South African
Green Fund is a national financial institution
dedicated to providing catalytic support for
investments in eco-friendly projects that
advance South Africa’s transition toward an
environmentally conscious economy. The
fund serves as a complementary resource,
augmenting existing fiscal allocations, with a
specific focus on novel projects that require
assistance in bridging financial gaps. The
Green Fund’s administration falls under the
purview of the Development Bank of Southern
Africa, acting on behalf of the Department of
Environment, Forestry and Fisheries (DEFF).
The impacts of the Green Fund are clear,
having led to the creation of over 1,600
direct job opportunities and a significant
11,300 indirect employment opportunities.
Moreover, the fund has directly trained more
than 7,400 individuals with essential, green-
focused skills and knowledge. Currently, the
Green Fund maintains a robust portfolio of
20 active projects, representing a cumulative
investment of R679.8 million since its
establishment.
INTERNATIONAL PRIVATE FINANCE
(INCLUDING PHILANTHROPY)
Private finance from international sources also
plays a role in green finance. This category
includes:
COMMERCIAL BANKS:
Banks provide loans and financial services
to businesses and projects in Africa,
including those focusing on renewable
energy and sustainability.
INSTITUTIONAL INVESTORS:
Sovereign wealth funds and pension funds
invest in projects and companies that
align with their environmental, social and
governance (ESG) criteria.
154 Park, C., 2007, A Dictionary of Environment and Conservation (1 ed.), Oxford University Press (link).
PRIVATE IMPACT INVESTORS:
Private individuals and organizations invest
in businesses and startups that have a
significant impact on environmental and
social issues in Africa.
PRIVATE EQUITY (INCLUDING
VENTURE CAPITAL):
Venture capital and private equity firms
fund startups and businesses in various
sectors, including clean energy and
sustainable agriculture.
INFRASTRUCTURE FUNDS:
These funds target infrastructure
development projects, including those
related to green and sustainable
infrastructure.
PHILANTHROPY AND VENTURE
PHILANTHROPY:
Philanthropic organizations and individuals
contribute funds for charitable and
sustainable projects that benefit African
communities.
PENSION FUNDS:
A type of investment fund that is set up
to provide retirement benefits to plan
participants. Pension funds are typically
managed by professional investment
managers who invest the fund’s assets in a
variety of financial instruments.
PATIENT CAPITAL:
Patient capital is a term used to describe
long-term investment, in the form of debt
or equity, where sustainable growth is
prioritized alongside financial returns.
MARKET-BASED MECHANISMS
A market-based mechanism is a “mechanism
(such as command and control and
environmental regulation) that is designed
to influence market forces in order to
manipulate market equilibrium, with a view
to improving environmental protection or
reducing environmental damage.”154 Market
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 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
mechanisms are essential tools for supporting
green finance and driving environmentally
sustainable practices.
A number of types of market mechanisms are
used in this context:
CARBON MARKETS:
Carbon markets, like cap-and-trade
systems, establish a financial value for
carbon emissions and create incentives for
businesses to reduce their carbon footprint.
RENEWABLE ENERGY CERTIFICATE
MARKETS:
RECs allow the trade of certificates
representing the generation of clean
energy, encouraging investment in
renewable energy sources.
GREEN BOND MARKET:
The green bond market connects investors
with projects and initiatives focused on
environmental sustainability, channelling
funds specifically into green projects.
ENVIRONMENTAL COMMODITY
MARKETS:
These markets deal with commodities, like
carbon credits, which can be bought and
sold as incentives for emissions reduction.
SUSTAINABLE AGRICULTURE
MARKETS:
Market mechanisms for sustainable
agriculture encourage practices that reduce
the environmental impact of farming and
promote responsible land management.
ENERGY EFFICIENCY TRADING:
Energy efficiency trading mechanisms
enable businesses to trade energy
efficiency credits, incentivizing reduced
energy consumption.
EMISSION REDUCTION TRADING:
Emission reduction trading markets create
opportunities for companies to buy and sell
emission allowances, driving a collective
reduction in carbon emissions.
50
WATER QUALITY TRADING MARKETS:
These markets allow entities to trade water
quality credits, promoting responsible water
management and pollution reduction.
NATURAL CAPITAL MARKETS:
Natural capital markets value ecosystem
services, such as clean air and water,
encouraging investment in preserving and
restoring these resources.
IMPACT INVESTMENT FUNDS:
These investment funds focus on projects
that generate measurable environmental
and social impacts, creating a financial
market for sustainable initiatives. These
market mechanisms not only support
green finance but also foster a dynamic
financial landscape that encourages
environmentally responsible practices and
investments.
DOMESTIC PRIVATE FINANCE
Domestic private finance plays a crucial role
in tackling climate change in Africa through
various mechanisms that channel resources
into various green initiatives, promoting
sustainable practices. Several key themes
(described below) exist within domestic private
finance which provide opportunities for scale
in the context of African markets.
INVESTMENT IN RENEWABLE
ENERGY:
Domestic private finance supports the
development and expansion of renewable
energy projects, such as solar and wind
farms, reducing the continent’s reliance on
fossil fuels.
SUSTAINABLE AGRICULTURE
FUNDING:
Private investors fund sustainable
agriculture practices, promoting climate-
resilient farming and reducing deforestation
and land degradation.
CLEAN TECHNOLOGY STARTUPS:
Domestic private investors provide
capital to clean technology startups,
fostering innovation in energy efficiency,
 4. Market analysis – financing green business in Africa
waste management and sustainable
transportation.
AFFORESTATION AND
REFORESTATION INITIATIVES:
Private funds contribute to afforestation
and reforestation efforts, helping combat
deforestation, sequester carbon and
protect vital ecosystems.
GREEN INFRASTRUCTURE PROJECTS:
Private finance supports the development
of green infrastructure, including eco-
friendly buildings and sustainable urban
planning, reducing carbon emissions.
ENERGY EFFICIENCY
IMPROVEMENTS:
Private investments are channelled
into energy-efficient technologies and
practices, helping businesses and
industries reduce their carbon footprint.
WASTE MANAGEMENT AND
RECYCLING:
Domestic private investors encourage
sustainable waste management and
recycling projects, reducing landfill waste
and mitigating emissions.
SUPPORT FOR CARBON OFFSETTING:
Private finance assists in carbon offset
projects, enabling individuals and
businesses to balance their emissions by
supporting green initiatives.
IMPACT INVESTING:
Impact investors in Africa focus on projects
that generate both financial returns and
positive environmental impacts, addressing
climate change challenges.
SUSTAINABLE SUPPLY CHAIN
INVESTMENTS:
Private finance encourages businesses to
adopt sustainable supply chain practices,
reducing the environmental footprint of
products and services.
CRDB Bank’s Green Bond in
Tanzania
CRDB Bank, Tanzania’s largest commercial
bank, recently issued the first tranche of
its $300 million Green Bond, the largest of
its kind in sub-Saharan Africa. This bond
programme is structured across a five-year
timeframe and falls within a multi-currency
Medium Term-Note (MTN) initiative. Notably,
IFC played a pivotal role by anchoring the
issuance and subscribing to 29 percent of the
bond.
The issuance raised $68.3 million,
representing an oversubscription of 429
percent and was officially listed on the
Dar es Salaam Stock Exchange. Through
this issuance, the bank created a new
Green, Social and Sustainability Bond
Framework, designed to channel present
and future funding towards green, social and
sustainability projects. The capital raised
by this bond will be directed to support
sustainable projects, encompassing climate-
smart agriculture, water, forestry, renewable
energy and green building solutions.
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 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024

52

5. POLICY AND REGULATORY
ENVIRONMENT
This report has already detailed several
ambitious and sincere high-level political
commitments that African nations have made,
both individually and collectively (for example
through the Nairobi Declaration, but also
through the Paris Agreement and associated
NDCs). However, policies and regulations
exist on multiple levels, ranging from global,
to continental, to national, to sub-national.
While these types of high-level commitments
are essential, the question of how these
commitments can be translated into on-the-
ground realities which support the growth of
green business is another question.
This is particularly prescient for Africa, given the
highly diverse regulatory, political, economic
and developmental situations that are present
across the continent. The question of how
national and sub-national governments can
create supportive regulatory environments, as
well as collaborate among each other to break
down economic and trade barriers, is essential
to allow green business to thrive.
This section provides an overview of the
current regulatory and policy environment
across the continent. It does not aim to be
exhaustive, but rather to build an accurate
overall impression of the status quo. It will
explore examples of country-level leadership
in creating an enabling environment for green
business and assess what has worked well and
what other countries can learn and apply from
these examples to achieve positive results.
Finally, it will consider the importance of
international agreements and programmes in
enabling green business, looking at initiatives
such as AfCFTA, among others.
5. Policy and regul atory environment
5.1 Evaluation of existing
policies and regulations
related to green business
and financing in Africa
In general, it does not make sense to think
about policy and regulation for ‘green business’
per se; it is more the case that policy and
regulatory initiatives happen predominantly on
the sector level. For example, a country may
have a best-in-class regulatory environment
for encouraging renewable energy but be
severely lacking in other important sectors,
such as sustainable agriculture. Having said
this, some governments have been proactive in
putting in place effective policy and regulatory
frameworks across a variety of sectors critical
to the green economy. Some of these countries
are examined later in this section.
The following patterns, corroborated in
consultation with the Global Green Growth
Initiative, were observed with regard to the
numerous diverse policy and regulatory
environments found across the African
continent.
LACK OF SUPPORTIVE
REGULATORY
FRAMEWORKS. Many countries
across Africa lack sector-specific
policies that support green business. The most
pertinent reason for this is a lack of government
resources. Because government budgets are
highly constrained in many African nations,
governments must prioritize legislation where
there is the most immediate and essential
need and pressure. In effect, this means that it
is often established sectors, or those for which
demand already exists, that receive regulatory
attention. Many governments do not have
the capacity to proactively create regulatory
frameworks to stimulate a demand which does
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 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
not yet exist (as is unfortunately the case for
many green sectors in many African countries).
INSUFFICIENT
ENFORCEMENT OF
REGULATION. Arguably an
even bigger problem than a
lack of supportive regulatory frameworks
(according to experts consulted during the
research process) is a lack of enforcement of
existing frameworks. Some African countries
do have coherent and robust policies in
place for green sectors, but do not have the
capacity to enforce them. This means that in
many instances regulation is not abided by
and companies that do abide by the rules
can be unfairly disadvantaged.155 Inconsistent
application of existing regulations is commonly
cited as a source of uncertainty that acts as
a significant hinderance to the growth and
prosperity of green businesses in many sectors
and countries across the continent.
POLICY INCOHERENCE.
With regard to green business,
policy incoherence refers to
instances in which a government
has policies and regulations in place that are
designed to stimulate green business, yet
they simultaneously have other policies in
place (either knowingly or unknowingly) that
undermine the same goals. An example of this
is a government that has robust sustainable
agriculture regulations in place to boost
environmental standards of the sector, while
simultaneously allowing rice to be imported
tariff-free, thus undermining the ability of more
environmentally sustainable domestic rice
growers to remain competitive.156
INSUFFICIENT FISCAL
INCENTIVES. In many instances,
current economic realities do
not adequately incentivize the
uptake of green technologies and thereby the
flourishing of green businesses. For example,
in many African nations the cost of electricity
derived from fossil fuels, such as coal, is so
155 www.unep.org/resources/report/africa-environment-outlook-business.
54 156 https://ecdpm.org/work/rice-trade-and-value-chain-development-in-west-africa-an-approach-for-more-coherent-policies.
cheap that there is no incentive for private
sector investment in renewable energy,
because it simply is not profitable. This is a
prime example of an area for which correctly
formulated fiscal incentives on the part of the
government could alter the fundamentals of
the market to stimulate green investment.
Overall, the policy and regulatory environment
for green business in Africa is generally
lacking. There are, as noted above, numerous
reasons for this. However, a huge variety exists
in levels of regulatory maturity across the
continent, with many success stories. As the
examples below (and the Morocco case study)
will show, policy and regulatory leadership in
Africa clearly exists and many countries can
offer best practices in one area or another for
other countries to consider and follow.
5.2 Establishing and
implementing green policy and
regulation
While having sufficient climate finance flow is
crucial, how to effectively deploy this capital
to achieve its goals is equally important.
As noted above, a key factor is an enabling
policy and regulatory environment. Conducive
policy environments are complex and involve
numerous aspects, such as ensuring fair
access, fostering stakeholder ownership,
aligning with national priorities, influencing
socio-economic factors, attracting additional
finance, promoting gender responsiveness
and more.
This section explores important aspects of
green and climate policies, and their progress
in a number of African nations. These can
serve as practical examples and offer insights
into how policy and regulation can be used to
create optimal outcomes for green business.

ENABLING SUB-NATIONAL GREEN AND
CLIMATE ACTION
Accelerating urbanization across Africa
presents challenges but also great
opportunities to improve regulations that
currently constrain green growth on a sub-
national level. It is essential to empower local
governments in decision-making related to
green growth and climate initiatives. This can
be done through ensuring adequate channels
of communication between various levels
of government, putting in place processes
to gain critical feedback and input from local
governments, and embracing a collaborative
approach to policymaking which emphasises
the ability of local government to shape policy
instead of a top-down dictation of priorities/
initiatives from national institutions. This can
help enhance vertical integration by bridging
policy gaps between national and local action
plans. It also can improve horizontal integration
by enhancing coordination among and
between local administrations.
One example of enabling sub-national green
action is Kenya’s Financing of Locally Led
Climate Action Programme.157 This programme
seeks to deliver locally led climate resilience
actions and strengthen county and national
government capacity to manage climate risk.
The long-term goal is to increase local-level
resilience to climate change and other hazards.
This initiative is particularly impressive because
it allows climate actions to be determined by
those affected most by the consequences
of decisions. There is strong evidence that
allowing local-determination of solutions to the
greatest extent possible results in a superior
allocation of resources, and greater social and
environmental impacts.
157 www.kccwg.org/flloca/index.php.
5. Policy and regul atory environment
EMBRACING DATA-DRIVEN
POLICYMAKING
Data is crucial for translating climate
commitments into actionable climate finance
strategies and improving an organisations,
governments, and businesses’ operational
resilience to the threats and changes posed
by climate change. Data is also essential for
private investors to identify new revenue
streams and cost-saving measures for climate-
resilient business activities, thereby revising
the value proposition of climate-positive
projects. The quality of information available
to identify, measure and track green projects
can help drive meaningful climate finance
decisions, such as redirecting public financing
flows away from carbon-intensive projects to
climate-positive outcomes.
Despite the obvious utility of data, extensive
data gaps exist on both the sector and actor
levels. On a public-sector level, governments
should consider the use of green and climate
‘budget tagging’ tools to track revenues and
expenditures on these themes. Regarding the
private-sector, companies/ organizations can
aim to achieve alignment with prominent global
reporting standards, such as the Taskforce
for Climate-related Disclosures (TCFD) or
the Taskforce for Nature-related Financial
Disclosures (TNFD) as one solution to bridge
this data gap.
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 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024

IMPLEMENTING GREEN FISCAL POLICY TAKE INTERSECTIONAL APPROACHES

REFORM
Green fiscal policy reform can help
governments align their current expenditures
with environmental goals, thereby enhancing
the effectiveness of public spending while
mainstreaming climate within the public
budget. The upward trends in the use of green
investments and the growth of climate and
development finance across Africa present
vast opportunities for governments to exploit
for the purposes of accelerating green
growth. The use of policy instruments, such
as environmental taxes, pollution charges,
removal of subsidies on fossil fuels, capital cost
subsidies, subsidies for green technologies,
green budgeting and tax incentives, are all
powerful tools which can be utilised to attract
larger shares of these international trends.
Numerous examples of green fiscal policy
reforms are taking place across Africa.
Algeria, Botswana, Egypt, Ethiopia,
Ghana, Kenya, Mauritius, Namibia, Nigeria,
Rwanda, South Africa, the United Republic
of Tanzania and Uganda have adopted, or
are in the process of adopting, Renewable
Energy Feed-In Tariff (REFI) policies to
attract investments in renewable energy.
Morocco and Tunisia have policies
supporting low interest bank loans and
capital subsidies for solar energy.
South Africa’s carbon tax programme is
expected to reduce carbon emissions 42%
by 2025.158
THAT SUPPORT GENDER EQUALITY
AND THAT ADDRESS VULNERABILITIES
Around the world, climate change
exacerbates prevailing gender disparities and
disproportionately affects the most vulnerable
communities and individuals. This is no less
true for African populations, with gender and
other inequalities entrenched in the social,
economic and political structures.159 Climate
policies and actions that are developed with
an inclusive view – that ensure the rights of
women and marginalized communities – lead
to safer, more efficient and more sustainable
outcomes, and support individual rights (such
as rights to water). The following are interesting
examples of this:
The Paris Agreement (in Article 7.5), to
which all African countries submitted
a national climate plan,160 emphasizes
that adaptation actions should follow
a gender-responsive, participatory
and fully transparent approach, taking
into consideration vulnerable groups,
communities and ecosystems.
The Inclusive Budgeting and Financing
for Climate Change in Africa (IBFCCA)
programme 161 (funded by Seda) takes an
inclusive, gender-responsive approach to
climate change budgeting and financing.
Since it began in October 2020, the
programme has engaged over 20 African
governments in strengthening gender-
responsive climate budgeting. Several
countries now have policies that advocate
gender mainstreaming within their national
climate efforts. Countries leading in
gender-related reforms in this context
include Eswatini, Nigeria and Rwanda.162

158 www.climatepolicyinitiative.org/wp-content/uploads/2022/09/Landscape-of-Climate-Finance-in-Africa.pdf.
159 www.cabri-sbo.org/uploads/files/Documents/IBFCCA-Gender-and-CC-briefing-note_ENG_Final.pdf.
160 www.un.org/africarenewal/magazine/april-2016/paris-climate-deal-and-africa.
161 www.cabri-sbo.org/uploads/files/Documents/IBFCCA-Gender-and-CC-briefing-note_ENG_Final.pdf.
56 162 www.cabri-sbo.org/uploads/files/Documents/IBFCCA-Gender-and-CC-briefing-note_ENG_Final.pdf.

An important positive evolution in gender-
responsive approaches to climate focuses
on the numerous opportunities for female
entrepreneurs in promoting climate
solutions. A recent IFC report makes a
strong business and investment case for
women-led green enterprises, providing
numerous positive industry examples as
well as entry points for investors.163 This
is particularly pertinent in the African
context, where a number of African
countries are currently struggling to meet
their commitments under the SDGs, in
particular SDG 5 on gender equality.
A prime example of a gender-positive
initiative currently underway in Africa is
Nigeria’s National Action Plan on Gender
and Climate Change, which promotes
gender-responsive climate policy and the
full, equal and meaningful participation of
women, with a focus on a number of key
economic sectors.
In line with the Gender Action Plan of the
United Nations Framework Convention on
Climate Change (UNFCCC), which promotes
gender-responsive climate policy and the
full, equal and meaningful participation
of women, Nigeria has developed a
National Action Plan on Gender and
Climate Change. Led by the Ministry of
Environment, the action plan focuses on
effective strategies for integrating gender
into the implementation of national climate
change initiatives, including the NDCs and
Nigeria’s Economic Recovery and Growth
Plan. Priority sectors covered by the action
plan include agriculture, forestry and land
use; food security and health; energy and
transport; waste management; and water
and sanitation. An implementation strategy
was developed to ensure that the actions
identified in the blueprint action plan are
integrated into the day-to-day operations
and decision-making processes of
implementing entities.164
163 International Finance Corporation (IFC), 2023. Exploring Opportunities for Women Entrepreneurs Driving Climate Solutions:
A Discussion Note (link).
164 Nigeria Federal Ministry of Environment, 2020.
165 South African Government, 2011, South Africa’s Green Economy Accord (link).
166 World Bank, 2023, Lessons from 25 Policies Advancing a Low-Carbon (link).
5. Policy and regul atory environment
BUILD THE CAPACITY OF GOVERNMENT
STAKEHOLDERS
With green issues remaining nascent and
relatively less explored in many African
countries, a potential role exists for both
government and businesses to play in
driving knowledge and awareness. Creating
a strategy and a national framework that
focuses on capacity building of government
and non-government stakeholders, including
enforcement bodies such as the judiciary, is
an important first step. Capacity building is
required to make sustainability goals achievable
and promotes a collective understanding of
the challenges and opportunities. It can also
help streamline collaboration across various
governmental departments.
Examples of national frameworks that embrace
the capacity building needs required to
achieve a transition to a green economy at a
meaningful scale include:
Ethiopia’s Climate-Resilient Green
Economy Strategy;
Mozambique’s Road Map for a Green
Economy;
Rwanda’s Green Growth and Climate
Resilience National Strategy for Climate
Change and Low-Carbon Development;
and
South Africa’s Green Economy Accord.165
Further examples of successful green policies
in African countries are found in a 2023 World
Bank report entitled Lessons from 25 Policies
Advancing a Low-Carbon Future.166 For
example, Egypt’s fleet renewal and recycling
programme was successful in enabling
and triggering a green transition within the
transport sector. Other success stories include
policies that succeeded in improving water
availability and soil quality in the Sahel and an
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 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
initiative in South Africa to make urban public
transport more sustainable.
5.3 Case study of enabling
green business: Morocco
As already noted, there are numerous
examples of policy and regulation being done
‘right’ in Africa, such that it encourages and
facilitates the thriving of green businesses.
One particularly strong country example that
has emerged in recent years is that of Morocco.
Morocco is highly vulnerable to the impacts
of climate change and has been historically
heavily dependent on imports of fossil fuels
for its energy needs. The country has gained
international renown for its early adoption of
ambitious high-level political commitments
and targets relating to climate and renewable
energy and is acknowledged to be in line with
their fair share of greenhouse gas emission
reductions as per the Paris Agreement.167
Moreover, Morocco has followed through with
sector specific transition plans for each sector,
as well as regulatory frameworks and policy
incentives that support actual implementation.
In addition to this, the country has successfully
established strategic partnerships with other
nations, as well as maximized benefits from
cooperation with MDBs. As a result of this
combination of actions, Morocco is widely
considered to be in a strong position when it
comes to having a robust enabling environment
for green businesses.
KEY POLICIES AND MEASURES
Morocco’s greatest policy successes lie in the
areas of renewable energy and agriculture –
two sectors which are of central importance to
Moroccan society and the national economy.
167 https://climateactiontracker.org/countries/morocco/policies-action/.
168 Ibid.
169 https://ndcpartnership.org/knowledge-portal/good-practice-database/morocco-solar-program.
170 www.trade.gov/country-commercial-guides/morocco-energy.
58 171 https://greeneconomytracker.org/country/morocco.
Morocco made pioneering and ambitious
commitments to renewable energy earlier
than most countries. At the time, the 2009
Morocco Solar Plan was considered ‘the most
ambitious on the planet.’168 The plan set the
goal of generating 2 gigawatts of solar power
by 2020, through a series of large mega-scale
solar projects. The plan was backed by $9
billion in funding.169 In addition, the Moroccan
Agency for Sustainable Energy (MASEN)
offered a ‘one-stop shop’ for private sector
project developers operating in the renewable
energy space, allowing land acquisition,
permitting and financing to be organized under
one entity, as well as offering guaranteed state
investments and purchase agreements.170
These initiatives and the country’s clear
commitment established Morocco as a
leader in renewable energy in the region and
stimulated extensive private sector investment
and job creation. It is generally accepted that
Morocco is well positioned to achieve its target
of 52 percent of energy from renewables by
2030.171
Morocco’s policy and regulatory environment
for the agricultural sector effectively balances
economic growth and job creation with
improved environmental outcomes and
sustainability. The first key policy initiative
which catalysed the sector’s growth and
sustainability was the Morocco Green Plan.
This strategy set ambitious goals for the
growth and greening of the agricultural
sector and contained concrete strategies and
funding to achieve them. For example, support
programmes provided extensive capacity
building and training, increasing the efficiency
and environmental sustainability of the
agricultural sector, boosting economic activity
and jobs. Public and private investment in
water infrastructure and irrigation techniques to
optimize water consumption for the agriculture
sector contributed to further increases in
yields (as high as 80 percent for some crops)

and water savings of between 30-50 percent.
Moreover, the creation and enforcement of
regulations and standards meant that the
ability of producers to export their goods was
boosted as new markets opened up to them
(in combination with environmental and health
standards).
This highly successful policy initiative has now
been replaced by a new agricultural policy laid
out in the Green Generation Strategy 2020-
2030, released in 2020,172 which builds on
the progress made. Since the commencement
of the initial scheme in 2008, the agriculture
sector has been responsible for 42 percent
of new job creation. This can be arguably
attributed to combined public-private initiatives
and investment and smart and enforced
regulations that the scheme entailed.
Regarding sustainable development more
broadly, Morocco’s flagship sustainability
strategy ‘Stratégie Nationale pour le
Développement Durable’ was released in
2014.173 This document was implementation-
focused, releasing $10 billion of funding for
157 specified activities designed to address
seven critical sustainability challenges
– green economy, biodiversity, climate
change, protection of sensitive ecosystems,
governance, culture and social cohesion
(see Figure 9 below). Adopting a sustainable
development lens in addition to pursuing sector
specific policy initiatives and regulations has
the effect of unifying sector-specific transitions
under a single holistic vision, sending a clear
signal to green businesses of government
commitment and policy support.
172 www.youtube.com/watch?v=XfhxhXvokyo.
173 https://faolex.fao.org/docs/pdf/Mor185348.pdf.
174 https://climate.ec.europa.eu/news-your-voice/news/eu-and-morocco-launch-first-green-partnership-energy-climate-and-
environment-ahead-cop-27-2022-10-18_en.
175 https://greeneconomytracker.org/country/morocco.
5. Policy and regul atory environment
In terms of international cooperation, Morocco
has been successful in forming strategic
partnerships with other countries. For
example, 2022 saw the finalizing of a high-
profile green partnership agreement between
the EU and Morocco that focuses on energy,
climate and environment.174 The initiative
strengthens collaboration on green policy
areas, encourages green economic growth
and job creation and accelerates progress on
environmental and climate targets.
While the most impressive green sectoral
transformations have occurred in renewable
energy and agriculture, the Moroccan
government has been proactive in releasing
legislation on a number of key green areas,
including green finance, energy efficiency,
natural resource protection and the just
transition.175 While these have not been as
well funded or ambitious as for the first two
mentioned sectors, they still serve to provide
the regulatory clarity needed for green
businesses and investors to make decisions
and thus serve an important purpose that can
be replicated across countries.
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 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024

FIGURE 9: Seven core sustainability challenges

Consolidate the governance

of sustainable development

Issue 1
Make progress
Promote a culture of Governance towards a green economy
sustainable development

Iss
Gr
7

ue
ue

e
en
re
Iss

2
ec
lt u

on
Cu

om
y
Inclusive
esion & Green

ity
Promote human development
Economy
l coh

ivers
Issue

and reduce social and regional

e3
Improve the management and
inequalities valuation of natural resources and
Socia

Biod

Issu
the conservation of biodiversity
6

Pro
t e ct nge
ed e cha
are m at
Iss
as Cli
ue e4
Accelerate the implementation of
5
Issu
Pay particular attention to the a national political movement to
protection of biodiversity rich areas tackle climate change

WHAT CAN BE LEARNED? Governments can utilize their funds

strategically to encourage the growth of
Wide sector coverage of legislation green business through green procurement
removes uncertainties and ambiguities, policies.
encouraging private sector growth and
foreign direct investment. The creation of dedicated government
agencies with reasonable autonomy and a
Having policies and legislation in place is not mandate to overcome market barriers and
everything. Often to create functioning and stimulate private sector growth in green
thriving markets, government investment, sectors can be an effective way to ensure
fiscal incentives and/or subsidies are also that the correct policies are implemented
needed. in a timely manner, so that markets can
grow organically.
Public-private partnerships and
collaboration with MDBs should be used
to help create the enabling conditions that
allow green markets and sectors to thrive
where they do not already exist.

60

The bi-directional potential of large
green projects
An interesting takeaway from the case
study analyses was the ways that large,
transformational green projects shape
and are shaped by national regulatory
frameworks in a bi-directional manner.
Big projects are often written into national
green and development strategies and
in turn, these projects can shape national
regulations as well as reshape budgets and
implementation entities.
The Kigali Water Project, included as a case
study in this report, is a prime example. In
this instance, the large scale and highly
strategic nature of the project acted as an
important incentive for government actors
that saw the success of the project as a key
policy goal. As a result of this incentive and
political will, resources were dedicated to
ensuring that the surrounding regulatory
frameworks were in place so that the project
could run as smoothly as possible. One way
that this was done was through the creation
of an ad-hoc entity that replaced the old
water infrastructure department and took
over its responsibilities. This new entity
was far more agile, assisting in overcoming
project hurdles and creating the supportive
regulatory environment that was needed.
5. Policy and regul atory environment
5.4 International agreements
and commitments that have
a role in shaping Africa’s
green economy
This report has touched on the ambitious high-
level commitments that African nations have
made, through global treaties such as the Paris
Agreement and more. Such commitments are
important as they play a critical role in shaping
discourse and determining the end goals and
priorities which African nations are working
towards. Through these, African nations have
agreed to very ambitious climate and nature
goals across key sectors. The question then
becomes: Which strategies and initiatives can
be taken to ensure that these commitments
and goals are achieved?
As this report has indicated, a significant gap
exists between the high-level ambitions that
many countries have declared and agreed
upon and the implementation situation on the
ground. Critical issues such as greenhouse
gas emissions, natural habitat destruction,
deforestation and air and water pollution
demand public and private action on a vast
scale in order to adequately address them.
It is here that green businesses can play a
pivotal role in creating, promoting and scaling
real solutions. Yet for businesses to be able to
optimize positive impacts, again as mentioned
earlier in this report, policy and regulatory
frameworks must be supportive and functional.
In addition, international initiatives – in
particular those that are African-originated –
have an essential role to play. Many initiatives
will be created in the coming years to meet this
need, but a number already exist. International
initiatives that have the potential to catalyse
green business across the continent are
discussed further below.
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AFRICA CONTINENTAL FREE TRADE
AREA (AFCFTA) AGREEMENT
This is arguably one of the most important
international initiatives with the potential to
catalyse the growth of green business across
Africa. It is widely acknowledged that African
nations have far more trade barriers in place
between each other than they do in relation
to the rest of the world.176 This is a significant
constraint to economic growth, particularly for
green businesses.
AfCFTA aims to break down trade barriers
in Africa and dramatically increase inter-
continental economic cooperation and
prosperity. To enable green sectors to flourish,
such as sustainable agriculture and renewable
energy, requires cross-border exchange of
products and services. In addition, ensuring
the energy transition is reaching all African
nations with none being left behind requires
international investment and cooperation.
Continental and regional economic integration
is essential to all of these.
BILATERAL ECONOMIC COOPERATION
Aside from continent-level initiatives such
as AfCFTA – which can take a long time to
negotiate and implement – bilateral economic
cooperation agreements represent a significant
opportunity to facilitate the growth and
prosperity of green businesses. Many green
industries and sectors require the movement
of goods and services across country borders.
An excellent example, mentioned earlier in this
report, is the bilateral economic cooperation
initiative between the Democratic Republic
of the Congo and Zambia to create a cross-
border Special Economic Zone to facilitate
the creation of an entire value chain for green
mineral extraction, refinement and green
industrialization more broadly. If executed
effectively, this is an initiative of huge macro-
176 https://globaldev.blog/trade-africa-formal-barriers-informal-networks-and-global-prospects/.
177 https://africacarbonmarkets.org/about-us/#eluidda6b7abe.
62 178 Ibid.
economic significance for both countries and
the broader region.
Many other opportunities exist for such
mutually beneficial collaborations across the
continent that have the potential to drastically
scale up green business. It is anticipated and
hoped that more will come to fruition.
THE AFRICAN CARBON MARKETS
INITIATIVE
The voluntary carbon markets are widely
considered to be a huge potential opportunity
for African nations and businesses.
However, to date, market growth has not
been commensurate with the scale of this
opportunity.
The African Carbon Markets Initiative (ACMI),
launched at the Conference of the Parties 27
(COP27), aims to catalyse the growth of an
Africa-wide market for high-quality, verified
carbon credits. The initiative is a cross-
continental effort, involving international
organizations, African leaders from across
the continent and carbon market experts.177
The goal is to break down critical market
barriers on the continental level and to have
a thriving African carbon market by 2030.
Aside from carbon, the initiative also focuses
on expanding energy access and renewable
energy production, increasing levels of
sustainability in the agricultural sector and
protecting biodiversity, such as forests.178
THE EU’S CARBON BORDER
ADJUSTMENT MECHANISM
As the EU’s emissions trading system (ETS)
phases out the allocation of free allowances
to emit CO2 and reduces the overall cap on
emissions in line with its greenhouse gas
emissions reductions targets, it is becoming
more expensive for European companies to
pollute.

The Carbon Border Adjustment Mechanism
(CBAM) aims to eliminate any subsequent
carbon leakage and unfair competition from
other regions of the world where emissions
reductions efforts are less mature. It will do
this by placing a carbon price on importers
that is equivalent to the price being paid by
EU companies for a given sector. Though the
scope of the CBAM is initially limited to key
highly polluting sectors, it is anticipated that it
will eventually expand to cover 50 percent of
emissions covered in the ETS sectors.179
This is, of course, of major significance to
African companies with business models that
are dependent on exporting to the EU. A
comprehensive study by the African Climate
Foundation and the Firoz Lalji Institute for
Africa calculates that once fully implemented,
the mechanism could cost Africa as much as
$25 billion per annum.180 The report argues
that the CBAM will increase administrative
hurdles for African companies, who have
already historically faced difficulties with
market access and that many African exports
will become uncompetitive as a result.
While it is clear that CBAM presents a significant
challenge for African companies operating in
polluting sectors, it could also have the effect
of catalysing investment in green sectors. As
this report has shown, Africa has the potential
to be a global leader in renewable energy,
green minerals, sustainable agriculture and
many more important areas. As more polluting
179 https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en.
180 www.lse.ac.uk/News/Latest-news-from-LSE/2023/e-May-2023/Africa-could-lose-up-to-25-billion-per-annum-as-a-direct-
result-of-the-EUs-CBAM.
181 Floyd, R., Yawson, F., Bayuo, B., 2023, Realising parallel investments in Africa’s green industrialization, ISS African Futures
(link).
5. Policy and regul atory environment
industries face increasing trade barriers
from the EU, a shift towards these sectors is
simultaneously being incentivized and Africa’s
clear competitive advantages in many green
sectors can and should be exploited.
INITIATIVES FOR LEVERAGING DIGITAL
TOOLS FOR THE GREEN INDUSTRIAL
TRANSFORMATION
Africa requires the scaling up of parallel
investments both in its traditional economic
sectors, as well as those that are critical
to the green transition, such as renewable
energy. Technology-enabled digital tools play
an important role in establishing processes,
platforms and data availability to support these
investments and their scale-up at regional,
national and international levels.
According to the Institute for Security Studies
(ISS) African Futures, these initiatives could
include the use of “the internet of things,
blockchain and artificial intelligence.”181
Such technologies can play a critical role in
countering key barriers, such as lack of data,
perceived risk, ineffective regulations and
lack of knowledge sharing across projects.
Technological innovation means extending
capabilities to address these issues in novel
ways which were previously not possible. As
such, digital tools have a primary role to play
in building competencies, creating jobs and
scaling up green industry across the continent.
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64

UNDP Mauritius/Stephane Bellerose


6. BARRIERS TO SCALE
The box below shares how the Climate Policy
Initiative categorised and described the main
barriers to climate finance innovation in Africa.
Assessing these barriers in the context of the
green business examples examined through
this report, these risks are not necessarily
greater for green businesses than they would
be for any other business operating or starting
up in Africa.
However, new and innovative activities
undertaken by green businesses might be
more challenging for financial institutions
to assess. Risks, such as regulatory risks,
could indeed be higher for green businesses
in sectors that require a stable regulatory
environment or public sector engagement
(e.g., off-take agreements).
The key point to emphasize here is that the risks
facing green businesses are not inherently
greater (or lessor) than any other type of
business and the risks listed above should not
be considered as an impediment to the growth
and development of green business across
Africa. In specific, regulatory risk for green
businesses would better be considered within
the individual sector of activity, rather than as
a blanket statement for green businesses on
the whole.
The barriers discussed are well understood
by policymakers, market participants and
other key stakeholders. All of these can be
addressed on a micro-level individually and
indeed are already being addressed within
individual countries. Thus, the barriers should
not be seen as insurmountable.
That said, an opportunity exists to create bold,
ambitious and strategic responses to these
barriers, which reflect the interlinked and
interconnected nature of these challenges, and
which could leverage African-led and African-
driven solutions. As articulated previously,
6. Barriers to scale
a strong policy and enabling environment is
always going to be fundamental to building
and scaling the green private sector.
The four categories articulated by the Climate
Policy Initiative of governance, finance,
project and enabling skills and infrastructure
barriers provide a solid framework for practical
and strategic actions as described below.
A – Lower the perception of risk for
innovative green business in Africa at the
venture level and widen the participation
of African ventures within green business
value chains.
B – Improve access to capital markets
for green businesses through practical
approaches to mitigate risk and create
transparent and robust revenue flows from
carbon and nature markets.
C – Address the limited scope and current
flows of concessional capital emerging
from development and multilateral banks
which can be directed towards impactful
green businesses and change the leverage
factor of private finance originating from
public investment.
D – Support capacity building and technical
assistance for the growth and scaling up of
highly impactful green businesses in Africa.
The barriers described are non-exhaustive
but they do represent clear, bold strategic
themes that must be addressed with scalable
and practical solutions. The opportunity exists
to embrace regional solutions which can be
applied in local and individual contexts. A
series of strategic recommendations, which
consider the prevailing policy environment
and that reflect a bold ambition to address the
key barriers, are outlined in the final section of
this report.
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TABLE 6: Climate Policy Initiative: climate finance innovation for Africa; key barriers by type182

Category Barrier Description

Governance Political risk Adverse political events which impact macroeconomic

environment (e.g., central bank policy, currency
inconvertibility) or the ease of doing business (e.g., turnover
of key personnel, corruption, breach of contracts, property
expropriation, war, civil disturbance)

Regulatory Unanticipated changes in legal or regulatory policies

risk such as financial sector regulations (e.g., securities law),
incentive programmes (e.g., feed-in-tariffs), perpetration of
unfavourable regulations and incentives (fossil fuel subsidies),
grid interconnection regulations, permitting process and
taxation.

Administrative Delays due to corruption, permitting delays, denial or repeal

risk and forced relocation

Financial Lack of early- Lack of or limited access to early-stage capital (e.g., equity,
stage finance construction finance and working capital)

Lack of long- Lack of or limited access to long-term debt and/or patient

term finance equity, which can limit projects’ ability to sustain activities
throughout their lifetime, buy out equity investments or
refinance debt investments

Refinancing Borrower’s inability to replace an existing obligation with new

risk capital when the maturity of existing loans is shorter than the
lifetime of the project

Currency risk Volatile foreign exchange rates arising when a project has
revenues in local currency and loan payments in a hard
currency (e.g., USD or Euro) impacting the ability to repay debt
obligations

66 182 Ibid.
 6. Barriers to scale

Category Barrier Description

Project Counterparty Credit and default by a counterparty in a financial transaction

risk (e.g., the power off-taker in a renewable energy project or
customers with low creditworthiness)

Technology Use of nascent or untested technologies (e.g., Carbon

risk Capture and Storage, hydrogen and EV infrastructure) often
involving higher cost of deployment

Insufficient Inability to capitalize on economies of scale, high transaction

project size and start-up costs due to the small size of some projects

Environmental Damages to assets or disruptions in value chains caused

risk by extreme weather events and long-term shifts in climate
patterns (climate-related risk) and/or losses in biodiversity and
ecosystem services upon which businesses and society rely
(nature-related risk).

Enabling Lack of Limited information on comparable investments, informal or

skills and data and unaudited financial records and lack of transparency and data
infrastructure information on climate related disclosure, making it difficult to conduct
due diligence

Limited Limited technical and engineering capacity for upstream and

technical downstream activities (e.g., lack of experienced Engineering,
capacity procurement and construction (EPC) contractors to install a
system or operations and maintenance (O&M) contractors to
maintain the system long-term) and financial sector execution
(e.g., limited credit culture, inexperienced bank personnel)

Lack of Limited availability of raw materials and physical

physical infrastructures needed to deliver project outputs (e.g.,
infrastructure electrical transmission and distribution infrastructure,
charging infrastructure for electric vehicles and roads to
efficiently transport smallholder produce)

67
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68

Photo
Creditcredit:
CreditUNDP
Niyi Fagbemi,
Rwanda/Mucyo
UNDP Nigeria
Serge
 7. C ase studies

7. CASE STUDIES
7.1 The Noor Ouarzazate Solar
Complex
The Noor Ouarzazate Solar Complex is
one of the most extensive concentrated
solar power (CSP) plants in the world, with a
collective installed capacity of 580 MW.183 It
provides affordable, eco-friendly electricity
to approximately one million Moroccan
households and businesses.184 The Noor
Ouarzazate Solar Complex project has been
unfolding in multiple phases, with construction
activities commencing through phase I in
August 2013 and finishing after the end of
phase IV in 2018.
This project is an integral component of the
Moroccan Solar Energy Programme (NOOR), a
national effort to develop five solar complexes
with a combined capacity approaching 2,000
MW by the year 2030 to help meet the country’s
energy demands.185 Prior to these projects,
Morocco had relied on imports for 95 percent
of its energy needs. These projects also align
with Morocco’s New Energy Strategy, which
seeks to expand the country’s proportion of
renewable energy sources to 52 percent by
the year 2030.186
Looking specifically at Phase I, the plant is a
groundbreaking large-scale CSP venture and
is among the first of its kind in the Middle East
and North Africa region. The construction
phase spanned 30 months and the plant
is expected to have an operational life of
25 years. Employing parabolic trough CSP
technology, the most widely deployed in
the CSP domain, the plant boasts a capacity
of 160 MW and possesses three hours of
thermal energy storage capacity, enabling the
provision of electricity during nighttime hours
and peak demand periods.187
The plant has a huge environmental and social
impact. It prevents 280,000 tonnes of CO₂
emissions per year; created more than 2,000
jobs during the construction phase (85 percent
went to Moroccan workers) and 60 permanent
employees are now involved in operation and
maintenance; and developed a strategy for
social engagement with local villages.188,189
FINANCIAL STRUCTURE – FOCUS ON
NOOR OUARZAZATE PHASE I
Noor Ouarzazate Phase I (as with each of
the power plants within the complex) was
developed through a PPP framework for
independent power production (IPP). This
framework encapsulated activities from design,
financing and construction to operation and
maintenance, spanning 25 years for the CSP
plant and 20 years for the photovoltaic plant.
The total investment in this plant was around
$850 million, funded through a combination of
debt (80 percent) and equity (20 percent).190
This strategy included completion guarantees
provided by the sponsor and Engineering,
Procurement and Construction (EPC) the
Moroccan Agency for Sustainable Energy
(MASEN; a government agency acting as the
debt facility and off-taker) and a risk allocation
between the public and private sectors
through which the public sector shouldered

183 Nsenergybusiness.com, 2019, ‘Noor Midelt Solar Power Project, Morocco – NS Energy’ (link).
184 Santamarta, J., 2013, ‘Noor Ouarzazate Solar Complex in Morocco, World’s Largest Concentrated Solar Power Plant,’
HELIOSCSP (link).
185 Ibid.
186 Africa Development Bank, 2021, Morocco noor ouarzazate solar complex project (link).
187 Nsenergybusiness.com, 2019, ‘Ouarzazate Solar Power Plant, Draa-Tafilalet, Morocco’ (link).
188 ESFC Investment Group (2021). Noor Ouarzazate: the world’s largest concentrated solar power plant built in Morocco (link)
189 ultimately creating 70 environmental and social initiatives with more than 34,000 direct and indirect beneficiaries.
190 Praveen, 2020, ‘Noor Ouarzazate Solar Complex. Power Technology’ (link). 69
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
the political, financial and commercial risks,
while the private sector assumed construction
and performance-related risks.
The debt financing was provided by a
combination of bilateral and multilateral
development finance institutions (DFIs and
MFIs). These organizations collectively
contributed nearly $670 million in debt
financing to the MASEN debt facility,191 ranging
in tenor from 15 to 40 years and included
technical support, along with some non-
repayable grants.192 MASEN subsequently
on-lent these loans to the project company
through a facility agreement, incorporating a
tenor (length of loan) aligning with the terms
and conditions of the DFI and MFI loans. The
funding was provided by institutions such as
the European Investment Bank, AfDB, Agence
Française de Développement, Kreditanstalt
für Wiederaufbau (acting on behalf of BMZ,
the German Federal Ministry for Economic
Cooperation and Development) and the
Climate Investment Fund (via AfDB and the
World Bank) to finance the project’s debt.193
Equity was contributed on a pro-rata basis by
the ACWA Power consortium (ACWA Power
Bahrain Holding (70 percent), MASEN Capital
(25 percent), TSK Electrónica Spain (2.5
percent) and Aries Ingeniería y Sistemas (2.5
percent).194
The primary source of revenue for the project
is a secured tariff revenue stream.195 Additional
financial support comes from the Government
of Morocco’s state budget, complemented by
a low-interest rate loan from the World Bank
designated as the Solar Incremental Cost
Support. These sources collectively bridge the
viability gap, addressing the price differential
between: (i) the tariff that MASEN pays to the
project company; and (ii) the amounts received
by MASEN from ONEE as the ultimate off-taker.
This price difference primarily stems from the
191 Global Infrastructure Hub, 2018, ‘Noor Ouarzazate, I – Concentrated Solar Power Plant’ (link).
192 Ibid.
193 Ibid.
194 Ibid.
195 Ibid.
70 196 Ibid.
amortization of the substantial capital costs
associated with CSP technology.196
WHY IS THIS CASE STUDY
TRANSFORMATIVE AND INNOVATIVE?
KEY CONSIDERATIONS FOR THE
PRIVATE SECTOR
FIRST OF ITS KIND PROJECT IN THE
MIDDLE EAST AND NORTH AFRICA.
The Noor Ouarzazate Solar Complex
represents a groundbreaking large-scale
CSP venture and is among the first of its
kind in the region, standardizing a PPP
model that has the potential to be replicated
in other countries.
KEY ROLE OF CONCESSIONAL
FUNDING.
This project clearly shows the fundamental
importance of concessional financing to
meet the huge capital costs (both in the
short and medium term) of a concentrated
solar power facility. In this specific case,
the concessional financing provided by
the Climate Investment Fund was used
to leverage funding from the World Bank
Group, AfDB and other European DFIs. The
use of concessional financing to provide
project equity was the foundation of the
structure that allowed project finance style
debt to be raised for most of the project’s
high capital costs.
EFFICIENT USE OF PUBLIC
INSTITUTIONS TO IMPROVE
PROJECT CREDIT PROFILE.
Involving the Moroccan Agency for
Sustainable Energy as the off-taker and
debt intermediary, with a margin for
electricity sales, was an efficient way to
improve the project’s credit profile, while
allowing for it to operate in the same way as
it would have done in a more open market
environment. This means that the role of a

creditworthy counterparty for a long-term
PPP agreement is a key component of
long-term debt financing of this type.
STANDARDIZED REPLICABILITY.
This project introduced standardized
practices typical of PPPs. The large
scale of the project and multiple phases
of activity helped drive efficiency and
eased discussions with various partners
and investors. This type of standardized
approach could be repeated in other
energy-focused PPP projects across the
continent, making them more replicable
and easier to engage with investors.
7.2 Sistema.bio
Sistema.bio is an impact-focused company
dedicated to addressing the interconnected
challenges of waste management, food
security and affordable energy.197 In particular,
Sistema.bio manufactures, distributes and
installs cost-effective biodigesters so that
farmers can transform waste into renewable
energy for cooking and farm activities, such
as making organic fertilizer to increase crop
yield.198 Such a system not only fosters
sustainable agricultural practices but also
contributes to significant carbon mitigation and
sequestration goals.
Sistema.bio’s biodigesters are prefabricated
products that are easy to use, high-quality and
scalable. The company offers comprehensive
capacity building and in-house financing (a loan
programme) to ensure their product is useable
and affordable for its customers. Sistema.bio’s
loans are paid back in monthly instalments
that are calculated to be less than the monthly
savings generated by the biodigester (for
example, through displaced energy and
fertilizer expenditure). This allows farmers to
benefit from net savings immediately. Sistema.
bio’s business model also involves the sale of
197 Sistema.bio, 2023, ‘Sistema.bio – The biodigester solution’ (link).
198 Ibid.
199 Ibid.
200 Convergence, 2021, ‘Sistema.bio’ (link).
201 Ibid.
202 Ibid.
7. C ase studies
carbon credits based on the CO2 reduction
achieved through its biodigesters.
Founded in 2010 in Mexico and then expanded
into Africa (Kenya and Uganda) and Asia,
Sistema.bio now collaborates with more than
53,200 farms spanning 31 different countries
across the globe.199
FINANCIAL STRUCTURE
Sistema.bio has deftly drawn on various types
of capital to grow its operations and expand its
presence globally, including a combination of
grants, debt and equity.200 The company has
received both repayable and non-repayable
grants from philanthropic organizations and
MDBs. Grant capital has been essential to the
company’s global expansion, providing the
necessary risk capital to assess the feasibility
of new markets, cover operational costs and
conduct R&D for product development. Total
grant capital received by the company to 2021
is approximately $3 million.201
As well, Sistema.bio has received equity
investment from its founders and from angel
investors. As the company approached
profitability in 2017, Sistema.bio received
seed equity from Factor[E] to further develop
and commercialize its technology. In 2018,
the company raised $6 million in equity in its
Series A round to fund its move to international
markets from a combination of impact
investors and venture capital funds seeking
both commercial and below-market returns.
Sistema.bio also raised a Series B equity round
of $15 million in 2021.202
Furthermore, Sistema.bio has received senior,
junior and convertible debt from a range of
creditors. Debt has been used to aid expansion
into new markets, cover the company’s working
capital requirements and support its asset
financing programme. Debt provided to the
71
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
company has varied both in terms of length and
interest rates, ranging from short-term loans
(two years) to longer-term loans (six years).
Interest rates have varied (typically ranging
between 6 and 12 percent). Approximately
half of funding raised in 2019 was in the form
of commercial senior debt. In 2020, Sistema.
bio completed a small bridge round, raising
$4.5 million in convertible notes. In addition,
since 2016, the company has partnered with
the crowdfunding platform Lendahand to raise
low-interest debt (6.5 percent) to cover specific
projects, amounting to $1.5 million in current
finance to 2021.203
In December 2020, Sistema.bio benefited
from a results-based financing programme
launched by the Africa Enterprise Challenge
Fund, with the primary objective of opening
up new markets for clean energy enterprises
in Kenya. Enabled by this programme, Sistema.
bio executed a project in 2022 in Kenya that
saw the installation of biodigesters of various
sizes for 882 farmers.204
WHY IS THIS CASE STUDY
TRANSFORMATIVE AND INNOVATIVE?
KEY CONSIDERATIONS FOR THE
PRIVATE SECTOR
TECH-FOCUSED AND HIGH
MODULAR PRODUCT TAILORED FOR
THE LOCAL MARKET.
Sistema.bio sells innovative prefabricated
biodigesters, whose current version is the
result of several years of R&D and customer
feedback. The product launched in Africa
was iterated from their original model
and is very robust, as it needs to survive
difficult environments and be easy to use
and maintain, as most of the customers
do not have a technical background. In
addition, fixed term biogas digesters that
are typically made locally in Africa are
not flexible enough in terms of volume of
waste that they can handle. By contrast,
the Sistema.bio model is modular in its
203 Ibid.
204 Sistema.bio, 2023, ‘Sistema.bio – The biodigester solution’ (link).
72 205 Ibid.
structure, allowing customers to combine
different units that function in the same
biogas system. This feature permitted
Sistema.bio to sell their products to different
types of farmers operating in markets with
different characteristics and needs.
INNOVATIVE SOLUTIONS FOR
AFFORDABILITY.
Usually, these types of products
have high initial costs for consumers.
However, Sistema.bio put in place several
mechanisms that allowed customers to
afford their biodigesters. For instance, the
company put in place a “pay-as-you-use
system” through which costumers would
make a 20 percent down payment for
the biodigester and receive a loan for the
rest with repayments over 12-15 months.
Another mechanism was the monetization
of the carbon savings that the biodigesters
generate, allowing users to sell carbon
credits to bring down the cost of the
product.
STRONG CUSTOMER SUPPORT AND
TRAINING.
The company implemented a well-
structured, six-step, multi-stakeholder
training programme to ensure that
users are equipped with accurate and
comprehensive information on the products
and its installation205 . The company also
focuses on education and capacity building
throughout its diagnostic, installation and
monitoring visits. Sistema.bio’s unique
emphasis on local capacity building has
been a key part of its strategy to ensure
long-term adoption and customer buy-in.
EFFICIENT USE OF A DIVERSE POOL
OF CAPITAL.
The company has benefited from a large
and varied amount of capital (debt, equity
and grants). It used these different types
of funding to finance their specific needs:
grants to assess the feasibility of new

markets, cover operational costs and
conduct R&D for product development;
debt to aid expansion into new markets,
cover the company’s working capital
requirements and support its asset
financing programme; and equity to further
develop and commercialize its technology.
CONSIDERABLE USE AND LEVERAGE
OF DATA.
Sistema.bio’s business model is extremely
data oriented. The company collects an
impressive amount of data on the use of
products, customer conditions, services
provided, etc. The data is then used to
deliver a high-quality product, a solid
lending programme and a reliable and
transparent carbon credits system.
7.3 OX Delivers
OX Delivers, operating in Rwanda, has created
a purpose-built 3.5-tonne truck tailored to
perform in challenging physical conditions, as
well as an innovative Electric Pay-As-You-Go
(PAYG) business model to optimize operational
costs while minimizing capital expenditure.206
This is an integrated, eco-friendly transportation
system that merges the delivery of goods with
financial, trading and marketing services.
The OX Delivers customer service model
offers a flexible payment structure, allowing
customers to rent space within their trucks and
pay only for what they need, thus eliminating
the need for up front capital to purchase trucks
or similar means of transport. This model
has developed new market opportunities for
transport as a service, particularly in meeting
the needs of smallholder farmers. The company
offers competitive pricing to customers,
charging rates similar to cargo bicycles—
206 OX, 2023, ‘OX Delivers – Ox Ecosystem’ (link).
207 Ibid.
208 The electricity used in these vehicles is approximately 50 percent more cost-effective than diesel.
209 The company expect to add an additional 36 electric vehicles in 2024, with an additional 92 being introduced in 2025.
210 O’Callaghan, T., 2022, ‘A pay-as-you-go electric truck is making deliveries on Rwanda’s dirt roads.’ CNN (link).
211 Untapped-global.com, 2023, ‘Why We Invested in OX Delivers: Reaching Small Businesses Across The Roughest Terrain’
(link).
212 Ibid.
213 OX, 2016, ‘OX Delivers – Ox Ecosystem’ (link).
7. C ase studies
roughly 50 cents to transport a 100-kilogram
sack over a distance of 10 kilometres.207
At the moment, OX Delivers is using mainly
diesel trucks, however the company is finishing
the design and testing of an electric vehicle
version of its truck (the first one was used for
the first time in Rwanda in 2023),208 which is
expected to become scalable by the end of
2024. The strategy is to phase out diesel trucks
and replace the majority of them with electric
models in 2024.209 OX Delivers electric trucks
have an impressive range of 170 kilometres
and have substantial carrying capacity, robust
durability and all-terrain adaptability.210 The
warehouses used by the OX Delivers trucks
come equipped with private charging depots,
which can fully recharge the electric vehicles
in approximately six hours, mitigating the
absence of public charging infrastructure in
the country while still leveraging an electric
vehicle model.
OX Delivers has also engineered a cutting-
edge digital platform designed to organise
logistics and client interactions in conjunction
with their fleet and warehousing infrastructure.
This platform encompasses web and 2G
smartphone applications for dispatching,
scheduling and optimizing vehicle routes.211
Additionally, an Unstructured Supplementary
Service Data (USSD) app is available for people
with limited or no internet access.212
More than 80 percent of OX Delivers clientele
are smallholder farmers who historically
have limited their sales to markets within
walking or cycling distance. Presently, the
company serves a customer base of over
4,500 individuals using 26 trucks. OX Delivers
envisions expanding its operations throughout
East Africa over the next several years.213
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Photo credit: Ali Mkumbwa/Unsplash
FINANCIAL STRUCTURE
OX Delivers is financed through a combination
of grants and private investment. The
company has been successful in securing
a substantial amount of grant funding ($24
million) that financed the R&D activities related
to developing the truck and the initial phase of
the company.214 The company then embarked
on its first funding round, securing $9.6 million
in angel and other investment. As at the time
of writing this report the company is in the
process of a Seed A funding round, aiming to
raise $10-15 million.
Why is this case study transformative and
innovative? Key considerations for the private
sector
OX Delivers is a great example of the
application of innovative technologies to
provide transport services that are cost-
effective, efficient, inclusive, dependable and
secure. For a number of reasons, described
below, this case study stands out.
74 214 O’Callaghan, T., 2022, ‘A pay-as-you-go electric truck is making deliveries on Rwanda’s dirt roads’ CNN (link).
INNOVATIVE AND TAILORED
TRANSPORT BUSINESS MODEL.
The truck’s pay-as-you-go renting system
allows farmers to pay for transport services
tailored to their specific needs, instead of
sustaining the often-inaccessible up-front
capital costs required to purchase their own
truck or utilize other modes of transport.
This enables smallholder farmers to reach
larger markets, potentially securing better
prices for their crops. In addition, OX
Delivers trucks are specifically designed
for Africa’s transportation needs, providing
considerable carrying capacity, strong
durability and adaptability to all terrains. In
addition to this, in 2024 trucks will adopt
electric vehicle technology on a larger
scale.
MANUFACTURING STRATEGY
FOCUSED ON LOCAL
IMPLEMENTATION.
Ox Delivers has in place a long-term
strategy to move its truck manufacturing
and assembling process from the United
Kingdom to Rwanda. Its truck is being
designed in such a way that it can be
shipped in flat-packed form, allowing for

cost-effective assembly within the host
country, allowing Rwanda to capture
more of the value chain and generating
a positive economic and social impact
in terms of additional local job creation.
The company is preparing to move the
assembly process to Rwanda within the
next couple of years and, in the future, to
move the whole manufacturing process to
the African continent.
HIGH REPLICABILITY POTENTIAL.
Ox Delivers has adopted a highly replicable
and adaptable business model. The
use of vehicles specifically designed for
challenging road conditions, its relatively
simple and affordable assembly process
and its strategic use of private charging
depots to offset the absence of public
charging infrastructures, make both the
trucks and the general model highly
scalable, flexible and replicable in other
countries.
EFFICIENT USE OF GRANTS TO ­
DE-RISK THE PROJECT’S R&D PHASE.
This company clearly shows the crucial
importance for early-stage tech-focused
companies to use grants to reduce the risks
related to the research and development
phase. Ox Delivers secured £20 million in
grant funding, which was key to the initial
development of the OX Delivers truck.
ACTIVE ROLE OF THE NATIONAL
GOVERNMENT.
The Rwandan government is playing an
active and positive role to create the right
conditions for transportation companies
like OX Delivers to thrive. For instance, it
put in place incentives for green energy
businesses, including some tax exemptions
and rent-free space for businesses to
operate in. Rwanda has also started offering
tax exemptions for electric vehicles,
thereby encouraging their importation.
215 Rights+Resources (2007). East Africa: Ecotourism, Suicide or Development? (Link)
216 UNEP (2020). Sustainable Tourism in Africa (Link)
217 Ol Pejeta Conservancy (2022). Annual report (link)
7. C ase studies
INVESTMENT IN THE LOCAL
WORKFORCE.
OX Delivers has a local team (80
employees) who have been trained in
high voltage safety, a necessity given the
electric vehicle and depot charging model.
As the business expands, the company
plans to recruit, train and empower more
drivers, improving their skills in using
electric vehicle infrastructure.
7.4 Ecotourism in Africa: A few
examples
Tourism models based on conservation,
nature-based solutions and environmentally
focused activities have become increasingly
popular around the globe, registering an
annual growth rate of 10-15 percent. In the
global south, the ecotourism sector is growing
by 6 percent per year.215 Sustainable tourism
substantially impacts the natural, cultural and
social-economic assets in destinations where
tourism activities take place.216
There are many successful ecotourism
destinations on the African continent, among
them the Volcanoes National Park in Rwanda,
the Okavanga Delta in Botswana, the
Seychelles, the Sabi Sand Game Reserve in
South Africa, etc. Several other examples in
Kenya and South Africa are described below.
These examples show how ecotourism has
great potential to raise awareness of the African
continent’s rich cultural heritage and natural
resources while simultaneously providing vital
funding to its communities by creating jobs
and different sources of revenue.
OL PEJETA CONSERVANCY. 217 This project
in central Kenya embraces an exceptional
conservation model that harmoniously
blends wildlife-livestock integration,
agricultural initiatives, tourism and community
empowerment. Ol Pejeta, covering a 360
km2 conservancy area, adopts an innovative
and sustainable development model that
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 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
safeguards biodiversity, with a particular
focus on protecting endangered species. This
initiative also plays a pivotal role in bolstering
economic growth and enhancing the well-
being of rural communities. Ol Pejeta provides
vital support to approximately 40,000
residents living in its vicinity, ensuring access
to education, healthcare and water, energy
and agriculture infrastructures. For instance,
solar systems have been installed in schools
in the site to save the school money and help
them ‘go green’ as well as several solar lighting
and charging systems have been installed in
surrounding households. Ol Pejeta primarily
sustains its operational expenditure through
its commercial revenues (80 percent tourism
and 20 percent agribusiness). In 2019, Ol
Pejeta Conservancy has also inaugurated a
Conservation Tech Lab to create and pilot
new cutting edge technologies (animal GPS
tracking collars, big data nature-focused
analytics platform, innovative reporting tools
etc.) to solve the challenges related to nature
conservation.218
SOUTH AFRICAN NATIONAL PARKS
(SANPARKS). 219 SANparks is the entity in
charge of managing South Africa’s national
parks, including 3 world heritage sites and 10
marine areas. This represents approximately
70 percent of South African state-owned
terrestrial protected areas and 22 percent
of state-managed marine protected areas,
covering over four million hectares on land and
almost 3,700 km2 km at sea. In addition, five
parks are integral components of transfrontier
conservation areas with Botswana, Lesotho,
Mozambique, Namibia and Zimbabwe.
SANparks primary source of revenue is based
on a combination of tourism activities and
grant capital received from the South Africa
government and donors. SANparks has also
embraced various technological tools such
as advanced camera systems, radar-based
detection tools, and monitor vehicles to combat
poaching.
218 Ol Pejeta Conservancy (2019). Press Release - Technology lab focused on wildlife protection opens on Ol Pejeta Conservancy
(link)
219 SanParks (2022). Annual Report (Link)
220 &Beyond (2022). &Beyond Phinda: Private Game Reserve (Link) & Phinda Private Game Reserve (link)
76 221 The Long Run (2022) Accelerating Change In Your Organisation, Landscape, Communities, And Beyond (link)
THE PHINDA PRIVATE GAME RESERVE. 220
This conservation project in KwaZulu-Natal,
South Africa, includes 29,866 hectares of
protected land, which was once used as
farmland, and comprises more than 436 bird
species. Alongside land restoration and
the reintroduction of wildlife, the Phinda
Reserve creates jobs, provides skills training
and supports community-led development
projects. The reserve mainly sustains its
business through its commercial revenues.
BORANA LODGE. 221 The Borana Lodge in
Kenya comprises a 2,000-acre area and is
dedicated to nature and land conservation
by reinvesting 100 percent of tourism profits
in protecting and preserving its ecosystem.
It is characterized by a holistic approach that
commits tourism, ranching and partnership with
other organisations to building local livelihoods
and improving the landscape integrity.
WHY ARE THESE EXAMPLES
TRANSFORMATIVE AND INNOVATIVE?
KEY CONSIDERATIONS FOR THE
PRIVATE SECTOR
Below are some key takeaways from the
examples above:
ECOTOURISM AS A LOCAL-FOCUSED
HOLISTIC AND MULTIDISCIPLINARY
BUSINESS DEVELOPMENT
OPPORTUNITY.
Nature conservation addresses complex
issues that require multidisciplinary
solutions capable of addressing various
ecological, social, cultural and economic
issues. Ecotourism is fundamental not only
for conservation purposes, but also to
develop socioeconomic benefits for local
communities as wildlife development success
is inextricably linked with the livelihoods
of local communities. Every successful
sustainable tourism project has a key feature
of supporting the people living around its site,

focusing on translating wildlife conservation
into better education, healthcare and
infrastructures for local communities.
USE OF MULTIPLE SOURCES OF
CAPITAL.
Protecting in-danger wildlife and supporting
biodiversity habitats necessitates large
amounts of capital. This means that
ecotourism projects cannot rely solely on
donors and grant capital or their commercial
activities, but instead it is necessary to
diversify the revenues streams through
other types of businesses and create
self-generating revenue mechanisms. For
instance, conducting agribusiness activities
(as is done at Ol Pejeta) or ranching (done
at Borana) are two good examples of
revenue diversification. More could still be
done, for instance, by introducing carbon
and/or biodiversity credits.
DEVELOPMENT OF THE RIGHT
SUPPORTIVE INFRASTRUCTURE
ENVIRONMENT.
On top of the main nature component,
there are several concrete investing
opportunities that are more broadly
connected to the sustainable tourism sector.
Investments are required to establish
low carbon infrastructures and services
in transport, building and construction.
Investments are also needed for more
efficient practices in energy-use, water-use
and waste management – all key services
to guarantee the efficient and sustainable
functioning of ecotourism projects.
EFFECTIVE COMBINATION OF
NATURE AND TECHNOLOGY.
New technologies can be leveraged to
improve efficiency in sustainable tourism
projects. The examples above show
promising potential in this sense: from
using monitoring, evaluating and reporting
sensors to track nature conservation
222 World Bank, 2018, ‘Kigali Water: Lessons from one of sub-Saharan Africa’s first water PPPs’ (link).
223 African Development Bank, 2015, ‘Rwanda – Kigali Bulk Water Supply Project’ (link) and Global Infrastructure Hub, 2018,
‘Case Study Rwanda – Kigali Water Supply Project’ (link).
224 Ibid.
225 Ibid.
7. C ase studies
progress, to the use of renewable energy
sources (solar and wind technologies) to
power tourism operations and support
local communities.
7.5 Kigali Bulk Water Supply
Project
The Kigali Bulk Water Supply Project is a
pioneering PPP for sub-Saharan Africa in the
water sector and is the first independent, large
scale, water production project in Rwanda.222
This comprehensive project encompasses the
development, design, financing, construction
and operation of a 40,000m3/day Bulk
Water Facility located south of Kigali, which
corresponds to about 35 percent of Kigali’s
daily water needs.223 Metito acted as the
project sponsor and the Facility is now owned
and operated by Africa Water Infrastructure
Development Ltd, a platform jointly owned by
Metito and British International Investment.
The project is based on a 27-year Build-
Operate-Transfer (BOT) contract structured
as a PPP with a two-year construction phase
included. Kigali Water Limited, acting as
the Special Purpose Vehicle, and maintains
the new treatment plant. Maintenance and
operation of the water distribution network
and the sale of water to end-users remained
under the purview of the Water and Sanitation
Corporation (WASAC).224
This project has had a significant environmental
and social impact. It has increased access and
improved water services for around 400,000
people in Kigali and surrounding areas. The
project created several hundreds of jobs
during the construction phase and many
more in related activities. And it has reduced
the time spent, mainly by women and girls,
collecting water, thereby increasing their
possibilities to complete education and pursue
other economic activities.225
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 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
FINANCIAL STRUCTURE
During the project’s feasibility phase, the
government engaged with the IFC as a PPP
advisor to increase potential involvement of
private investors, which led to IFC taking on
the role of Transaction Advisor alongside GIDE
(legal) and Mott McDonald (technical). A public
tender process was held which resulted Metito
being awarded the concession and becoming
developer of the project.
The UK based, Project Infrastructure
Development Group and AfDB, played an
essential role in supporting the project’s
financing at various intervals. The Rwandan
Development Board also played a key
facilitation role for the transaction across all
the parties. The Emerging Africa Infrastructure
Fund took the lead as the Mandated Lead
Arranger for the project’s financing, employing
a blended finance structure that involved a
long term debt commitment from the AfDB
and the Emerging Africa Infrastructure Fund
(EAIF).5 The Rwandan government guaranteed
the overall project, while WASAC committed to
paying a regulated tariff to KWL in exchange
for the water supplied by Kigali Water Limited
(KWL), ensuring a steady stream of funds.
WHY IS THIS CASE STUDY
TRANSFORMATIVE AND INNOVATIVE?
KEY CONSIDERATIONS FOR THE
PRIVATE SECTOR
Several elements are described below that
contributed to the success of this project.
FLEXIBLE INSTITUTIONAL
FRAMEWORK SUPPORTED BY
CAPACITY BUILDING.
As the first PPP structure in the water sector
in Africa, the development of the project
revealed a need to enhance the institutional
design and strategy within public sector
institutions involved in the project. To foster
transparency and operational excellence,
the Government of Rwanda decided to split
the project structure and oversight so that
the distribution network and processing
plants were overseen by separate divisions.
78 This allowed each division to focus on their
operational activities and, overall, make the
project development process smoother.
In practice, the government divided the
Energy and Water and Sanitation Authority
(EWSA) into two distinct utilities: the
Rwanda Energy Group Ltd. and the Water
and Sanitation Corporation Ltd., with the
latter entrusted with project management.
In addition, the IFC team successfully
secured funding from the Public-Private
Infrastructure Advisory Facility to support
capacity building for the water utility and
drive reforms within the water sector.
HIGH REPLICABILITY POTENTIAL.
The PPP structure in place for this project,
which is very common across energy
projects in Africa, was expected to serve
as a model to be replicated across other
African countries in the future. However, it
is important to note that current changes in
market conditions (higher interest rates, high
levels of distressed debt, etc.) compared to
when this project was originally designed
have led to increased difficulties in
developing large PPP projects such as this.
Assuming that market conditions improve,
there is ample potential for this model to
be replicated more widely within the water
space.
ALIGNMENT WITH GOVERNMENT
POLICY.
Rwanda’s National Vision, including Vision
2020 and the Economic Development
and Poverty Reduction Strategy 2008,
specifically pinpointed insufficient access
to safe drinking water as a significant
contributor to the country’s poverty.
The national objectives for achieving
universal access to water and sanitation
were aligned with those of the Kigali
Bulk Water Supply project, securing
high-level government commitment,
which has proven to be a pivotal success
factor in both the project planning and the
development phases.

USE OF A RESULTS-BASED
PLANNING FRAMEWORK FOR
EFFICIENT MONITORING.
The project embraced a results-based
planning framework, placing equitable
emphasis on governance, justice and
economic parameters. The framework
clearly delineates specific outcomes,
subject to ongoing monitoring and annual
disclosure through government channels.
This strategy enhanced the long-term
sustainability of the multi-year project’s
development.
AN ITERATIVE BLENDED FINANCE
APPROACH:
The efficient and attractive financial
structure of the PPP was pivotal to the
project’s viability, and particularly the
engagement of multilateral financial
institutions’ capital played a crucial role
in attracting private sector participation
in the project. It is also worth highlighting
that the financial structure underwent
continuous adaptation during the project’s
development phase to accommodate
changes in project dynamics and cost
considerations
226 DGB Group (2021). ‘DGB Group - Kenya Reforestation Project’ (link).
7. C ase studies
STRONG PRIVATE SECTOR
COMMITMENT:
A key component was the engagement
of an experience water developer to
work with global financing institutions and
government bodies to develop the project
in a timely and cost effective manner. The
investment from Metito as equity finance
and the incentives designed into the PPP
have enabled high quality water to be
reliably supplied to the people in Kigali
since 2021.
7.6 Hongera Carbon Project
The Hongera Carbon Project is a 40-year,
large-scale carbon offsetting project in
Kenya managed by the DGB Group, with the
primary goal of mitigating carbon emissions.226
The Hongera Carbon Project has two main
components: an afforestation programme and
a cookstoves programme. The first consists
in the restoration of previously forested
regions that have suffered from activities
such as logging, agricultural clearance, urban
development, construction and firewood
collection. The project has created 18 tree
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 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
nurseries, five of which are managed by DGB
Group and the rest by local communities.
The nursery is a local source of employment
opportunities, and as a number of the tree
species planted also bear fruit this helps not
only with the broader ecosystem, but also
with agricultural productivity in the area.
Trees divide into two different species: the
fruit species, which also guarantee a form of
short-term profits for farmers by selling fruits;
and the indigenous no-fruit species, which
are mainly used for sequestration purposes
(development of carbon credits certified by
Verra). The farmers who sign up for the project
receive both tree species, gaining access to
both short- and long-term revenue streams.
Farmers in the afforestation programme are
automatically part of the cookstove side of the
project, with locally manufactured cookstoves
provided to them. Both the afforestation and
the cookstove programmes provide carbon
credits – it takes two years to receive the
cookstove credits and six to receive the
afforestation credits.
80 227 Ibid.
Currently, 9,000 farmers (representing
around 40,000 beneficiaries in total with
family members) actively participate and take
advantage of the programmes, and around
200 people are employed for the project
operations.
FINANCIAL STRUCTURE
The project’s primary source of revenue comes
from the sale of Verified Carbon Units.227 In the
period preceding the generation of carbon
credits, DGB Group forward sold one-third of
the cookstoves credits (value of $1.7 million)
to start the factory and put in place the first
steps of the project. The project diversified
its funding streams to include venture capital
and debt, to sustain its operations. Currently,
the project has a value size of $20 million, of
which half is coming from the credit pre-selling
and venture capital and the other half from the
issuance of a green bond (four years, eight
percent) issued by DGB Group. The project
officially commenced its credit-generating
phase on 1 January 2023. The issuance of
Verified Carbon Units will serve as a pivotal
milestone, validating the project’s potential

for the next fundraising round and potentially
attracting investors from a diverse range of
stakeholders.
Why is this case study transformative and
innovative? Key considerations for the private
sector
EFFICIENT USE OF DIFFERENT
CARBON INSTRUMENTS.
The project leverages a variety of carbon
instruments which cover medium-term
(cookstoves) and longer-term (afforestation)
carbon credits, well balancing the short
and medium-term cash flow of the project
for the benefit of local communities.
RIGHT BALANCE BETWEEN SHORT-
AND LONG-TERM INCENTIVES.
The combination of short-term revenue
generated by selling fruit in the local
market and long-term revenue based on
selling carbon credits (two years for the
cookstove credits and six years for the
afforestation credits) represent the right
balance of incentives and has been critical
to successful local buy-in and commitment
from farmers and the local community.
SUBSTANTIAL FOCUS ON LOCAL
TRAINING.
DGB group placed considerable emphasis
on the need to train local farmers in both
programmes (cookstoves and afforestation),
building capacity in the local community
and ensuring sustainability of project
activities without ongoing supervision from
DGB Group – effectively empowering the
local community to drive project outcomes.
DIVERSIFIED SOURCE OF FUNDING
(PRIVATE CAPITAL INVOLVEMENT).
This project represents a good case of use
of different sources of capital. From the pre-
selling of carbon credits to the involvement
of venture and debt capital, DGB Group
secured the involvement of private sector
capital.
228 Digital Hub Initiative (2023). How Agritech transforms African economies (Link)
229 Disrupt Africa (2023). Africa’s agri-tech revolution – the challenges, the opportunities, and what more needs to be done
(Link)
7. C ase studies
REPLICABILITY.
The model embraced within this project
combining short-term revenue streams for
farmers (via fruit trees) while the longer-
term revenue stream comes to fruition
(cookstoves and then carbon credits)
provides a useful and replicable business
model for similar activities to help address
re-forestation needs, better manage
forest and timber resources and transform
cooking methods to help manage pressures
on forested areas.
7.7 Agricultural Technology
(Agritech): a few examples
Over the last few years, African agriculture has
experienced a substantial growth in the use
of technologies to address the longstanding
challenges that affect this vital sector for the
continent. Agritech companies have been
supporting farmers by providing farmers
with access to better and more efficient
technology, such as precision agriculture
tools, drones, and crop sensors, by which they
can increase their productivity and yield, and
connect with buyers and suppliers in new and
innovative ways.228 Farmers are also using
new agritech technology to face challenging
climate conditions and ensure that their
communities have access to healthy food.
Building successful agribusinesses is deeply
connected to the access to finance for farmers.
Technology is allowing farmers to build up a
digital track record and credit history, leading
to the access of more financing opportunities
to help their businesses grow and serving as
engine of the agricultural sector.229
The digital era offers many new innovations and
breakthroughs that have the potential to bring
the African continent to advance economic and
social development, and in doing so unlock
the full potential of its smallholder farmer and
agribusiness sector. A short list of successful
and impactful examples of innovative agritech
companies is enlisted below:
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 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
1. APOLLO AGRICULTURE 230: Apollo
Agriculture is a Kenyan-Dutch agritech
platform that aims to support African
small farmers. Apollo’s business model
offers smallholders a loan to obtain a
comprehensive package of agricultural
inputs, including quality seed, pesticides
and fertilizer. The loan is not provided in
cash, but in the form of a digital voucher
on a mobile payment app that farmers
can use to pay local agricultural product
dealers who supply these inputs. The
company adopts a repayment period
that is based on the agricultural season:
farmers pay 10% of the total price at the
start of the agricultural season and the rest
after harvest. Furthermore, Apollo provides
training to farmers on how to use the inputs
and connects them to insurers, so that they
can receive an insurance policy to protect
their harvests against extreme weather
conditions.
Apollo uses a combination of field,
behaviour, and satellite data for the
development of credit profiles for farmers
who have never previously had a loan.
These credit profiles are used for risk
assessment and to provide customized
training and inputs for each individual
farmer. Since its foundation in 2016, Apollo’s
ecosystem has grown rapidly with over
100,000 smallholders, 450 agro-dealers
and 2,000 field agents.
2. PULA 231: Pula is an agricultural insurance
and technology company that designs and
delivers agricultural insurance and digital
products to support farmers in enduring
yield risks, improving their agriculture
practices, and increasing their incomes over
time. Pula operates in more than15 African
countries and its business model is mainly
based on three key products: a Weather
Index Insurance, where through the use
of weather data the company develops
insurance policies that compensate
230 Issuu (2022). Drivers and barriers of a platform-based business model in agriculture: The case of Apollo Agriculture (link)
231 Empower Africa (2023). PULA: The Kenyan Startup Transforming The Lives of Smallholder Farmers Through Agricultural
Insurance (link)
82 232 AfricaInvest (2022). Aerobotics (link)
farmers when adverse weather conditions
hit their crops. The payouts are triggered
automatically based on predefined
weather parameters, substantially reducing
the complexity behind claims processes;
The Crop and Livestock Insurance, where
Pula guarantees broad insurance coverage
for various crops and livestock. Farmers
have the possibility to customize policies
to suit their specific needs, ensuring that
their investments are safeguarded; and the
use of digital platforms that allow farmers
to purchase insurance, receive policy
updates, and access crucial agricultural
information. This technology improves
the accessibility of insurance products in
remote areas.
3. AEROBOTICS 232: Aerobotics is a South
African company that uses a machine
learning technology based on high
resolution and multi-dimensional sensing
imagery from drones and satellites
to provide tree specific insights with
information on tree count, size, health and
chlorophyll levels. The solution is also
able to provide fruit-specific information
(fruit detection, size and colour), which is
critical in predicting yield and ultimately
profit for farmers. Besides operating in
several African countries, the technology
has also been adapted to the U.S. crop
insurance market, providing insurers with
key elements for their inspection process
and loss adjuster reporting.

WHY ARE THESE CASE STUDIES
TRANSFORMATIVE AND INNOVATIVE?
KEY CONSIDERATIONS FOR THE
PRIVATE SECTOR
Drawing from the experience of the case
studies enlisted above, there are some key
takeaways that should be taken into account:
EFFICIENT USE OF NEW
TECHNOLOGIES:
These companies are solving a variety
of agricultural problems with drone
technology, field, behaviour and satellite
data, robotics, and Internet of Things (IoT)
solutions, demonstrating how the African
agriculture sector is capable of a radical
change through the use of advanced
technology. All examples listed above
show promising potential in this sense.
COMBINATION OF AGRITECH AND
FINANCIAL PRODUCTS:
The application of new technologies
is supporting farmers to improve their
access to financial products, such as loans
and insurance policies. Advanced data
collection practices together with the use of
digital platforms is opening up new financial
opportunities for farmers by reducing their
risks and increasing their potential incomes.
7. C ase studies
Such practices also make safer for national
and international actors to invest in small-
medium size agriculture projects.
HIGH REPLICABILITY POTENTIAL:
The rapid expansion of the companies
described in the previous section shows
how the use of these technologies is
scalable and replicable. Besides, the
tech focused business model of these
companies makes them more attractive for
investors, improving their chances to raise
the necessary amount of capital to expand
their supportive activities for farmers.
CONSIDERABLE USE AND LEVERAGE
OF DATA:
the three companies’ business models are
heavy data oriented. They all manage to
collect an impressive amount of data on
the farming activities, using it to deliver a
high-quality supportive service for farmers.
7.8 M-Kopa
M-Kopa is an asset financing platform
providing services to the underbanked
population in Africa. M-Kopa operates as a
multifaceted entity, blending elements of a
marketplace, credit platform, and analytical
engine. Its mission is to lay the groundwork 83
 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
for a multi-disciplinary financial ecosystem
where those people that are traditionally
underserved can access capital and banking
services.233 Their innovative pay-as-you-go
(PAYG) system enables customers to gradually
cover the costs of essential products, thereby
granting them access to goods and services
that would otherwise remain financially out of
reach.234 Their offer encompasses an array
of essential products, including solar lighting,
televisions, refrigerators, and smartphones as
well as financial services such as loans and
health insurance.235 Established in 2010, with
its commercial launch in 2012, the company
is headquartered in Nairobi, and operates in
Kenya, Nigeria, and Uganda.
M-KOPA customizes its products and pricing
with a keen focus on low-income households,
leveraging the data it has collected. For
instance, in Uganda, customers commit to a
daily payment of UGX 1700 (approximately
US$0.50 cents) for one year to settle the cost of
their 8W solar home system.236 This amount is
typically less than what they spent on kerosene,
batteries, and candles. Consequently, more
than 90% of customers adhere to their payment
schedules, culminating in the development of
a favourable credit history with the local credit
reference bureau.237 This, in turn, grants them
access to a diverse array of M-KOPA upgrade
offerings, comprising additional lighting, water
tanks, smartphones, and energy-efficient cook
stoves.
In addition, the company has developed a
specialised research and development division
known as M-Kopa Labs, which allocates
research grants to test novel technologies and
expand the capabilities of the current M-Kopa
services.
233 M-Kopa (2023) M-Kopa Website (Link)
234 M-Kopa (2023) Impact Report 2023 (Link)
235 Wikipedia (2023) M-Kopa (Link)
236 Ibid.
237 M-Kopa (2023) M-Kopa Website (Link)
238 M-Kopa (2023) Impact Report 2023 (Link)
239 Times 2019. M-Kopa (Link)
240 TechCrunch (2023). M-KOPA snaps up $250M+ debt, equity for its asset financing platform (Link)
84 241 Sustainable Finance Initiative (2015). Innovation in financing green products: the case of CBA Bank and M-Kopa (Link)
As the company looks ahead to 2026, its vision
encompasses reaching a total of 20 million (vs
current 4.5 million) customers in Africa while
unlocking more than US$7 billion in credit to
facilitate and further support their journey
towards financial inclusion.238
FINANCIAL STRUCTURE
M-KOPA has recently managed to secure more
than US$250 million in new funding, divided
in US$55 million in equity and over US$200
million in debt.239 On top of this funding round,
M-KOPA has raised a total of US$245 million in
equity funding since its launch in 2010.240
WHY IS THIS CASE STUDY
TRANSFORMATIVE AND INNOVATIVE?
KEY CONSIDERATIONS FOR THE
PRIVATE SECTOR
ENABLING ACCESS TO A GREAT
VARIETY OF PRODUCTS THROUGH
SINGLE MARKETPLACE:
M-Kopa has managed to positively impact
several African citizens by enabling access
to power and smartphone connectivity
(together with many other products)
through a single marketplace.
CREDIT SERVICES FOR UNBANKED
PEOPLE:
M-Kopa’s business model aimed to bypass
the costs and credit risk barriers involved
in physical payment collection systems.
Once the credit profile is defined, it can
roll out a variety of different products for
lower income consumers which become
affordable if their repayment is structured
over a manageable period.241

NETWORK OF ON-THE-GROUND
AGENTS:
M-Kopa has managed to build a big
network of autonomous sales agents
(12,000), who reach out customers who
were previously underserved by sharing
242 M-Kopa (2023) Impact Report 2023 (Link)
7. C ase studies
detailed information on their products and
services and supporting them on their
payment plans242 . This initiative enables
to efficiently connect the company with its
clients.
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86

8. RECOMMENDATIONS
AND NEXT STEPS
8.1 Strategic recommendations
Establish dedicated green investment
pathways.
Recognizing the financing gap for green and
climate finance across the continent, Africa
has a pressing need to rapidly diversify
the existence of dedicated green financing
mechanisms through expanding existing
institutions or the creation of new approaches
at the national and regional levels, with a
specific mandate to support green business.
This can be done using the steps below,
among others.
Create and support green
financing products, for
example green microfinance or
dedicated funds and facilities,
to encourage investment in
green businesses that might find themselves
outside the traditional banking system.
Leverage new commodity and
asset classes, such as carbon
and nature markets, to help
lower the cost of capital for
countries across the region.
Work in partnership with
existing DFIs to catalyse DFI
funding for specific green
business opportunities.
Nations should explore the institutional
home for these facilities and mechanisms; for
example, within existing national development
banks or elsewhere.
The overall objective for this recommendation
is to rapidly stimulate investment in green
businesses, facilitate blended finance
approaches and provide technical assistance
8. Recommendations and next steps
to catalyse $500 billion in investments by
2030. Mechanisms must have a clear link to
private sector investment, build local technical
capacity, create local jobs and leverage human
capital available from existing financial and
financing structures.
CREATE AN AFRICAN URBAN GREEN
BUSINESS AND FINANCE PLATFORM
Recognizing the need for Africa’s growing
cities and urban municipalities to tackle
the dual challenges of rapid urbanization
alongside climate change, it is proposed to
create a platform with a mandate to catalyse
and transform green business ventures and
entrepreneurship in urban locations and
support cities in their greening ambitions.
This would be accomplished by working in
cooperation with existing institutions across
the region, for example the Urban Climate
Finance Institute.
More specifically, the platform would perform
the below functions:
Work with individual cities to
build a Green Investment Plan,
mapping out potential greening
projects and activities, such as
greening of infrastructure and
transit systems, electric vehicle infrastructure,
etc. The costs and benefits thereof would
be examined, as well as the capital needed
to support these plans. This activity would
also serve as a framework for stakeholder
engagement.
Support green business
projects within urban settings,
whether those identified in the
green investment pathways
proposed above or via green
businesses operating in targeted cities, with
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 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024
technical assistance, due diligence and capital
facilitation support.
Provide technical assistance
to cities to build their financing
capabilities through tailored
engagement and partnerships
with dedicated pools of
investment capital.
This recommendation aims to improve urban
resilience through greening activities and
mobilize capital to support these activities
and green businesses operating within African
urban centres. This recommendation targets
an incremental $10 billion of financing per year
over 10 years.
ESTABLISH A NATURE-POSITIVE PATH
TO RECOGNIZE NATURE AS AN ASSET
CLASS
Africa’s nature-rich status provides an
opportunity for African leadership to benefit
from the lessons learned in the voluntary
carbon markets in Europe and other
developed markets and build robust carbon
and biodiversity markets that can offer high
cost, high quality, abundant and tradeable
products to corporate and other potential
buyers looking to meet their nature-based
ambitions. To achieve this, the steps below
would be involved:
Create a task force to map out
an Africa Nature-First Pathway
that considers African interests
at the heart of solutions and
that works in collaboration with
initiatives already underway in this space.
Establish a regulatory or
oversight entity tasked with
certifying the quality of offsets,
setting clear standards and
sanctioning practices that are
not aligned with the overall aim of establishing
a well-functioning and credible market.
88
Engage in a series of awareness
raising and community
engagement activities across
the continent. Outline how
carbon and biodiversity markets work, explain
co-benefits and facilitate equitable distribution
of rewards across project developers,
sovereigns and local communities.
Accelerate the development
of biodiversity markets in
the region, creating revenue
streams for governments and
local citizens, while protecting
natural assets and reducing the cost of capital.
The overall objective of this recommendation is
to make Africa the hub for issuance of specific
instruments linking nature, biodiversity and
carbon transactions by 2030.
ENHANCE GREEN VALUE CHAINS AND
CORRIDORS
Recognizing that demand for African minerals
to facilitate the green transition continues
to rise, this recommendation calls for African
leadership to drive the greening of value chains
so that African countries and local communities
gain the most benefit from mineral and other
raw material extraction and production via
greater participation in value-added activities
through a focus on specific value chains and
corridors.
Convene strategic advisory
groups to examine value
chains either within a specific
mineral and product or for a
specific country; bring together public and
private players to identify opportunities for
initial focus and action.
Recommend solutions,
(for example standardized
regulatory frameworks) for local
communities to gain benefits.
This includes examining investments needed
to support deeper penetration of value chains
(for example in renewable energy), possible
incentives and enabling policy interventions
and implementation and capacity support.

Create a platform for best
practice research. This can
be a place to convene and
communicate on all matters
related to expanding the
growth of green mineral value chains that
support green business ventures in Africa.
The overall objective of this recommendation
is to keep as much of value chains as possible
within Africa (in both $ and % terms) by increasing
the volume and quality of opportunities
created for African local and national gain and
to broaden local participation in green mineral
and other commodity value chains.
ENCOURAGE MULTILATERAL
DEVELOPMENT BANKS TO DO MORE TO
REDUCE INVESTMENT RISK IN AFRICA
Recognizing that public capital investments in
climate finance issues in Africa leverages the
smallest amount of private capital of any region
in the world – $0.16 for every $1.00 spent –
MDBs and DFIs have a critical role to play to
help reduce the risks that limit private capital
engagement in the region.
The Bridgetown Initiative and activities being
undertaken by the V20 (group of 68 countries
that are highly vulnerable to the negative
impacts of climate change) also focused on
MDBs and the global financial architecture.
This recommendation thus focuses on several
key actions that would vastly benefit green
business and financing across the region.
Improve investment guarantee,
risk reduction products
and tools and insurance
mechanisms to de-risk projects
and better crowd in private
capital.
Coordinate MDB action to work with central
banks to create innovative financing structures
that can tackle currency risk concerns on
the part of private investors, whether due
to depreciation, revaluation, liquidity and
exchange controls or other considerations.
8. Recommendations and next steps
Open up the Global Emerging Markets Risk
Database (GEMs Database) to allow private
investors to benefit from the quantitative
data available on credit and other risks
across a wide range of MDB and DFI
transactions and to increase the richness
of the database through the inclusion of
additional transactions supplied by private
investors.
Engage with credit ratings
agencies to help review their
methodology for African issuers
(both sovereign and corporate) in
cooperation with relevant African
institutions to explore whether specific facilities
are needed to help address any data or context
gaps, and/or methodological uncertainties.
The overall objective of this recommendation is
to increase the volume of catalytic investment
capital flowing into green and climate-
friendly businesses in the region, targeting an
incremental $100 billion per year of financing
over the next 10 years.
CREATE AN AFRICAN GREEN BUSINESS
INSTITUTE
Recognizing the need for a centre of excellence
that can serve as a hub for green business
in the region and be a repository of the best
human capital practices across the region, it
is recommended to create a Green Business
Institute in Africa. The institute would leverage
the dynamic entrepreneurial activities of
the region, as well as take advantage of the
continent’s young population. The main
activities to create such an institute are below.
Establish a home for the
institute, possibly housed
within a consortium of
universities or existing training
institutions. The institute would
make available country-focused knowledge
and training materials to serve as digital
resources for green businesses.
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Create internship and youth
leadership programmes to
combine training with practical
experience and to give
emerging leaders the chance
to take part in sustainability and resilience
projects within local governments, nonprofits
and private sector companies.
Initiate an innovation award and
investment pitching process to
build awareness of green business
initiatives and highlight innovation,
potentially working in collaboration
with prominent national/local initiatives which
are already established.
The overall objective of this recommendation is
to mobilize flourishing training and knowledge
programmes that support innovation and green
business, supported by a thriving internship
programme alumni network.
90
8.2 Next steps
UNDP and its partners will test this report’s
strategic recommendations in the context of
three African countries to further refine these
concepts.
Over six months, Country Action Roadmaps
will be prepared, with the assistance of UNDP
Offices in Angola, Malawi and Togo, to create
a set of recommendations with the potential
to unlock financing for green businesses.
An emphasis will be placed on innovative,
integrated business and financial policies and
approaches that incentivize local private sector
development and engagement.
Launch events for these roadmaps are due to
be held in 2024.
 8. Recommendations and next steps

91

Credit Credit Niyi Fagbemi, UNDP Nigeria

 AFRIC A G REEN BUSINESS AND FINANCING REPORT 2024

ACKNOWLEDGEMENTS
We would like to thank the many contributors to this report.

ADVISORY BOARD

The guidance and insights provided by the Advisory Board members have been invaluable to the
AGBFI and to this flagship report. Advisory Board members include:

Joel Barnor, Director of Sustainable Development Partnership, Development Bank of Southern

Africa (DBSA)
Hubert Danso, Chief Executive Officer and Chairman, African Green Infrastructure Investment
Bank (AfGIIB)
Tamer El-Raghy, Managing Director, Acumen Resilient Agriculture Fund
Kebour Ghenna, Executive Director, Pan African Chamber of Commerce and Industry (PACCI)
Amétépé Gle, Président, Groupement des industriels du Togo (GITO)
Eugene Itua, Chief Executive Officer, Natural Eco Capital
Edith Jiya, Chief Executive Officer, Old Mutual Malawi
Sidonie Kouam, Regional Investment Lead Africa, Global Green Growth Institute (GGGI)
James Mwangi, Co-Founder and Chief Executive Officer, Africa Climate Ventures
Dipak Patel, Head: Climate Finance and Innovation, South African Presidential Climate Commission
(PCC)
Wanderley Ribeiro, General Director, Kepya¬
Karen Serem Waithaka, Chief Investment Officer, Catalyst Fund
Landry Signé, Professor and Executive Director, Thunderbird School of Global Management,
Arizona State University
Marcus Watson, Investment Director, Kawi Safi Fund

INTERVIEW AND CONSULTATION PARTNERS

We would like to thank the entrepreneurs and practitioners who shared their experiences and
contributed to the case studies on innovative green business and financing models in Africa:

Hongera Carbon Forestation Project: Selwyn Diujvestijn (DGB Group)

Kigali Water Plant: Ernest Podu (Africa Water Infrastructure Development Ltd), Paromita Chatterjee
(Ninety-One Asset Management)
Ox Delivers: Natalie Dowsett, Daniel Maxwell, Colin Tebbett
Sistema.Bio: Esther Altorfer

We would also like to thank all experts who participated in the interviews and consultations and
contributed their valuable insights:

Edna Kalima, Programme Officer, AUDA-NEPAD

Nyiko Khoza, Head of Private Sector Engagement, AUDA-NEPAD
Chola Mfula, Acting Head of Private Sector, Investment and Agri-business Unit with the Directorate
of Agriculture, Food Security and Environmental Sustainability, AUDA-NEPAD
92
 Acknowledgements

In addition, representatives of the following organisations provided insights and views on the
themes discussed within this report:

Acumen
Africa Climate Ventures
British International Investment
Burn Manufacturing
Energy and Environment Partnership Trust Fund
Esoko
FinDev Canada
FSD Africa
Global Environment Facility
International Finance Corporation
Kenya Climate Ventures
M-Kopa
Trade and Development Bank
US Development Finance Corporation
World Bank

REPORT TEAM

The report was produced by UNDP’s Africa Sustainable Finance Hub (ASFH) in close collaboration
with the Regional Bureau for Africa (RBA), the Regional Service Centre for Africa (RSCA) and
the UNDP Country Offices in Angola, Malawi and Togo. The report team would like to thank in
particular the RBA Director, Ahunna Eziakonwa; the RSCA Director, Matthias Naab; and the ASFH
Director, Maxwell Gomera.

The Country Office colleagues include Jose Felix and Jesus Quiteque (Angola); Cinzia Tecce and
Tawonga Chunda (Malawi); and Abiziou Tchinguilou (Togo).

We would also like to thank the RSCA colleagues including Muyeye Chambwera, Daisy Mukarakate,
Charles Nyandiga, Wahida Shah and Bertrand Tessa; the communication team including Jeanne
Lee Finestone, Ayda Labassi, Ntokozo Mahlangu and Michelle Mendi Muita as well as other UNDP
colleagues and contributors for their valuable support.

Technical supported was provided by Bankers without Boundaries (BwB). We would like to
especially thank Isaac Caiger-Smith, Edouard Kueviakoe, Heather Matson, Violette Santhe, Matteo
Scalabrino, Chris Smith, William Watts and Elves Zambela and for their work and contributions.

The AGBFI ASFH team was led by Tomas Sales and supported by Antoinette Mashinda and Xinyi
Yao, who coordinated and provided technical backstopping for the report.

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