“More Money, Fewer Problems: Closing Africa’s Climate Finance Gap” a report by BCG

Katie Hill, Chris Mitchell, Mills Schenck, Patrick Dupoux, and Warren Chetty from the Boston Consulting Group recently co-authored a report on what is needed to close Africa’s climate finance gap. 

🔹 $2.4 trillion is required until 2030 to meet Africa’s climate needs, but only 12% of this funding has been met or committed.

🔹 Macroeconomic uncertainty, opportunity cost of capital, and investor risk assessment—resulting in financing costs 5-6% greater than in comparable emerging markets—creates a major impediment to investment flow into green sectors.

🔹 In addition to the foundational work of improving macroeconomic conditions, a range of solutions exist for unlocking financing that can be actioned by investors, DFIs, multilaterals, and philanthropic funders.

🔹 Increasing Portfolio Value Creation (PVC) by equity investors is paramount to accelerating the growth of green sectors.

🔹 A universe of financial instruments—ranging from traditional to novel—is available that can de-risk and mobilise debt into green sectors in Africa.