Three-quarters of private climate finance in Africa is now raised domestically, and household solar spending is up nearly fivefold, but public international sources remain the backbone catalysing this change. 

Antalya, 13 November 2026 – African banks, businesses, and households are driving a surge in private climate finance, according to a new report which finds that private investment across the continent has more than tripled since 2019/20. 

The third edition of the Landscape of Climate Finance in Africa, published by Climate Policy Initiative (CPI), FSD Africa, the government of Norway and the UK government, reveals that private climate investment reached USD 26.5 billion a year in 2023/24, with more than three-quarters (76%) coming from domestic sources. 

African banks and businesses are leading the change. Commercial financial institutions accounted for almost half of the increase in private climate finance between 2021/22 and 2023/24, with corporate investment also rising substantially. The report links the rise to stronger climate engagement among African banks, growing regulatory attention to climate risk, and falling global costs for solar, wind and battery storage.  

Meanwhile, household climate investment more than doubled to USD 5.1 billion a year, 19% of private climate finance, and accounted for over a fifth of the increase. Small-scale solar drove more than 90% of that growth, with household spending on solar PV rising nearly fivefold to USD 3.3 billion a year, highlighting the growing role of African households, alongside businesses and financial institutions in funding the continent’s clean energy transition. 

The findings point to a significant shift in Africa’s climate finance landscape, which has traditionally been dominated by international public finance. But despite the growth in private investment, Africa still has the lowest proportion of private climate finance of any region in the world, at just 36% of total flows. International public finance remains the backbone, providing almost two-thirds of flows, and is increasingly catalytic: private finance mobilized by multilateral and bilateral development finance more than doubled since 2021/22, to USD 8.2 billion. Yet, the growth is uneven, international public climate finance to low-income African countries fell by 11%, even as funding to middle-income countries rose by 33%. 

The report finds that closing the gap is not just a matter of increasing the volume of private finance but of building financial systems that can originate, prepare and finance climate investments at scale and tailored to each country. That means building the capacity of African financial institutions to originate and finance climate investments and keeping consumer finance channels such as pay-as-you-go models and local bank lending available and affordable, particularly in local currency. It also points to clear policy frameworks and risk-sharing mechanisms, such as those that have supported renewable energy, as models for other sectors. 

Barbara Buchner, CEO of Climate Policy Initiative, said: “Africa’s climate finance has grown significantly, driven in large part by homegrown private investment. But the challenge is not only volume. African banks, insurers and pension funds manage around USD 3.2 trillion in assets, yet many projects are too small and fragmented for these investors to reach. Clear, predictable policy frameworks and investment vehicles can help bridge this gap, as parts of the renewable energy sector have shown.” 

Mark Napier, CEO of FSD Africa said: “The trends in the report are consistent with the global picture: climate finance in Africa is increasingly being driven by the private sector.  It shows that if we build well-functioning, sustainable financial markets we can unlock investment not just in clean energy but in other sectors of the green economy such as agriculture, housing and transport, creating vibrant markets that deliver jobs and basic services as well as climate benefits.” 

Other key findings include: 

• Climate finance more than doubled to USD 74 billion annually in 2023/24 but remains far below the estimated USD 300–USD 572 billion needed each year for mitigation alone. 
• International public finance is still the bulk of Africa’s climate funding, accounting for almost two-thirds of flows. However, international public climate finance to low-income African countries fell by 11%, even as funding to middle-income countries rose by 33%. 
• Investment is concentrated in a handful of countries and sectors. Energy attracted USD 32.3 billion annually, while agriculture, forestry and other land use received just USD 6.5 billion. Middle-income countries received more than 80% of energy finance, while low-income countries saw slower. 
• Climate adaptation remains underfunded, accounting for just 21% of climate finance, down from 28% in 2021/22, despite growing climate risks. 

The report calls for greater efforts to unlock African institutional investment and direct finance towards underserved countries and sectors, while maintaining vital international public funding. 

Read the full report: africa-landscape.climatepolicyinitiative.org

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