Unlocking public climate finance for sustainable business transformation in Africa
IIED and partners are co-running a two-part training programme on green and sustainable finance focusing on sub-Saharan Africa.
Researcher (climate adaptation), Climate Change
The world faces a triple and interconnected crisis: the climate emergency, rapid biodiversity destruction and entrenched poverty. The next ten years are crucial to prepare, adapt and transform our societies, economies and ecosystems.
The public sector alone cannot finance solutions to this triple crisis. Globally, US$10 trillion of investment is needed to achieve the Sustainable Development Goals, and annual adaptation costs in developing countries are estimated at $70 billion. This figure is expected to reach $140-300 billion in 2030 and $280-500 billion in 2050.
The private sector has a defining role in both mitigating the potential damages brought by a carbon-intensive, ‘business-as-usual’ global economy and finding new, innovative and catalytic approaches for adapting to a changed climate.
IIED, FSD Africa (FSDA) and Cambridge Institute for Sustainable Leaderships (CISL) have joined forces for a five-year project to provide a better understanding of how it’s possible to shift from business-as-usual to 'business-unusual' investments that can utilise public climate finance to tackle the biggest challenge of our time.
What is IIED doing?
The first element of the project is the FSDA-IIED-CISL Climate Finance in Africa training programme, which will build the knowledge and capabilities of leaders in policy, government and financial institutions within and outside sub-Saharan Africa, to support their transition to a low-carbon and climate-resilient economy.
The course is split in two parts. The first element, led by CISL, took place in August 2021 and the second part, led by IIED, three months later. They combined sessions, guest speakers and practical activities.
IIED’s course focuses on the role of public climate finance in helping overcome the barriers to private sector engagement and investment in climate change, especially adaptation.
The programme introduces delegates to the major concepts in public climate finance, and presents the challenge of attracting private investment, especially for adaptation, within the African context.
It also provides an overview of the landscape of public and private climate financing opportunities to support the African private sector climate action today. Lastly, the course walks participants through the steps to take when developing bankable climate finance proposal, including:
- Alignment with country climate objectives
- Conducting a market analysis
- Developing a climate rationale for an investment, and
- Developing a theory of change.
Each component of the course is supported by specialist guest speakers with practical experience of completing each step of the application process.
After the course, delegates will:
- Better understand the opportunities public climate finance plays in addressing the barriers to private sector investment and enabling projects in climate change
- Understand how to navigate different opportunities for international public sector climate finance
- Progress or develop new ideas for climate mitigation and adaptation investments and/or enabling environment projects
- Advance knowledge on what is required for ‘bankable’ investments for international climate finance versus ‘business as usual’ investments
- Understand what new policies, procedures, skills and personal may be required to 'navigate complexity and systems thinking' – in order to practically deliver and manage these climate finance investments, and
- Identify new partnerships opportunities for unlocking climate finance.
The triple crisis: why we need to transform business and finance | Barriers and financing solutions
Why regulators, financial institutions and business need to consider climate-positive regulation, investments and products; and barriers to investments and the role that climate finance can play in overcoming them.
Pathways to access | Bankable climate finance (part 1)
The motivation for why and how to access climate finance, partnership opportunities and key national stakeholders; and key country and market climate investment priorities and how to assess them.
Bankable climate finance (parts 2 and 3)
Development of scientific justification for investment case; combining justifications together into a logical theory of change – explaining needs to investment impact.
Institutional change (parts 1 and 2)
How institutions may need to change and strengthen their investment cases via active management of climate investment; and assessments and management of environmental and social risks.
Institutional change (part 3) | Climate finance pitches
How to address and integrate socially transformative elements into investment cases and organisations; and make a final pitch on a climate finance investment case.
Good climate finance guide: lessons for strengthening devolved climate finance, Sejal Patel, Marek Soanes, M Feisal Rahman, Barry Smith, Dave Steinbach, Sam Barrett (2020), IIED working paper
How can Bangladesh’s private sector engage with the Green Climate Fund?, Neha Rai, Iftekhar Hossain, Marek Soanes, Virginie Fayolle, Naznin Nasir, Yousuf Mahid (2016), IIED toolkit