Unlocking climate funds for African cities

A new report by C40, led by Andrea Fernández, has shed light on the critical need for scaling up finance for subnational climate action in African cities. The report emphasizes the urgent requirement for national governments to unlock funding and drive sustainable urban development. As climate change continues to impact African cities, the call for increased finance has never been more pressing. Fernández, the Managing Director of Climate Finance, Knowledge, and Partnerships at C40, outlined the significant barriers that have limited access to climate finance for Africa. Shockingly, only 4% of Africa's urban climate finance needs are currently being met, leaving a massive gap in funding. Weak institutional capacity, challenges in developing investment-worthy projects, fiscal policy constraints, and difficulties in attracting investments for smaller cities are among the key hurdles. To address these challenges, the report highlights the pivotal role of national governments in enabling subnational climate action. National governments are major contributors to public sector investments in regions like Africa, making their support crucial. Fernández stressed the importance of quick and scalable approaches to help cities tackle their finance challenges amidst the visible impacts of climate change. One of the key tactics identified for governments in Africa is to establish a clear vision and climate action plans that outline the city's priorities and goals. By integrating climate action throughout municipal administrations, cities can align every aspect of their operations with their climate plans, demonstrating their readiness for investment. Partnerships with development organizations and initiatives like CHAMP, the Coalition for High Ambition Multilevel Partnerships, are vital in supporting subnational governments. At COP28 in December 2023, CHAMP was launched to encourage collaboration between national and subnational governments in defining climate plans and investment strategies. Development partners play a critical role in developing scalable approaches based on the NDCs and urban content outlined in these plans. The conversation also touched on the importance of blended finance and concessional finance in making climate projects more affordable and accessible. These financial instruments can provide guarantees and support project preparation, enabling less creditworthy cities to access private finance. The need to address debt concerns, explore PPPs, and overcome fiscal policy barriers was highlighted as part of a holistic approach to unlocking finance for cities. In conclusion, the report underscores the gravity of the funding challenges that African cities face in tackling climate change. With the support of national governments, development partners, and initiatives like CHAMP, there is hope for overcoming these barriers and driving sustainable urban development in the face of climate crisis.