Sustainable Finance Centre

ABOUT

Finance is urgently needed to ensure Africa’s cities are resilient to global sustainability challenges and able to operate as green economic hubs. Africa received just $30 bn of global $1.3 tn climate finance in 2022 – less than 3% of global climate finance, and well short of the $250 bn needed annually to tackle climate change. Given Africa’s high urbanisation rate, it is crucial that finance is unlocked for the building of low carbon and climate resilient infrastructure, and for the protection of Africa’s rich biodiversity.

In response, ICLEI Africa’s Sustainable Finance Centre (SFC), with like-minded partners across the world, is charting a new era of increased funding for local action, ensuring we move from policy to practice. By playing crucial and often under-resourced intermediary roles, bridging divides between crucial stakeholders, the SFC is joining the dots and improving engagement between actors involved in the project development value chain, leading to higher quality projects that can be financed for maximum local impact.

The SFC works across ICLEI Africa’s work areas, performing the following activities:

Providing project development support throughout the entire development lifecycle, with a particular focus on de-risking early stage projects.

Co-developing new, and tailoring existing financial instruments for implementation of local-level projects.

Working with the private sector to develop business models that deliver sustainable and innovative technologies where they are needed most.

Building capacity through training and tools, which enable scaling of lessons learnt.

Key projects supported by the SFC to date

Alternative Financing for Municipal Embedded Generation

Through the Alternative Financing for Municipal Embedded Generation (AFMEG) project, ICLEI Africa in partnership with the Development Bank of Southern Africa (DBSA), and funded by the UK’s Partnering for Accelerated Climate Transitions (UK PACT), supported four intermediate municipalities in South Africa to develop alternative finance models and conduct pre-feasibility studies for low-carbon energy projects in municipalities, providing critical groundwork for investment. By delivering capacity-building programs, skills enhancement, and technical assistance, the project helped beneficiaries overcome two major barriers to accessing Embedded Generation Investment Programme (EGIP) and other climate finance opportunities: the ability to gather data and develop pre-feasibility studies for renewable energy projects, and the capacity to engage with financiers and partners.

Key achievements included:

Development of policy recommendations for municipal embedded renewable energy generation solutions, enabling clearer regulatory pathways.
Completion of pre-feasibility studies and financial models for embedded renewable energy projects, improving investor readiness.
Implementation of a municipal training program and city-to-city learning exchanges on embedded renewable energy generation and climate finance, strengthening institutional capacity.
Production and dissemination of communication materials to share lessons learned and promote wider adoption of renewable energy solutions.

The project effectively supported municipalities in advancing their renewable energy initiatives, unlocking new financing mechanisms, and fostering partnerships for sustainable energy development, all of which are crucial for municipalities’ abilities to participate in, and steer the country’s just energy transition.

Just Municipal Embedded Generation

The Just Municipal Embedded Generation (JMEG) project, implemented by ICLEI Africa in partnership with the Development Bank of Southern Africa (DBSA), and funded by UK’s Partnering for Accelerated Climate Transitions (UK PACT), is currently supporting six intermediate municipalities in South Africa in developing solar embedded generation projects by providing critical early-stage preparation, including: technical pre-feasibility studies, financial models, transaction structures, and socioeconomic impact analyses.

The work will culminate in project applications to the Development Bank of South Africa’s (DBSA) Project Preparation Unit, with the ultimate destination the Embedded Generation Investment Programme (EGIP) that will provide concessional implementation finance.

JMEG is scaling the impact of AFMEG’s successes by deepening support for existing municipalities while expanding to new municipalities, incorporating lessons learned to tailor support and maximise impact. This work is building the foundations, capabilities, and tools for intermediate municipalities to develop renewable energy projects and attract financing, equipping them to drive innovative, local just energy transitions.

Enabling African Cities for Transformative Energy Access

The ENACT project, implemented by ICLEI Africa in partnership with national ministries and local authorities in Uganda and Sierra Leone, and funded by UK aid through the Transforming Energy Access (TEA) platform, supported city-led approaches to clean cooking access in informal settlements.

The project delivered catalytic finance to local clean cooking enterprises in Kisenyi (Kampala) and Susan’s Bay (Freetown), enabling them to adapt technologies and scale business models that would otherwise be commercially unviable. This approach directly benefited over 20,000 people, created 57 jobs, and facilitated over 3,100 new clean cooking connections, exceeding programme targets.

ENACT also developed clean cooking energy profiles, access scenario tools, and policy recommendations to support public finance mobilisation and SME-led delivery models. Public awareness campaigns reached over 5,000 people, supported by multilingual video and infographic tools.

By aligning national clean cooking ambitions with community-centred delivery, ENACT laid a replicable foundation for inclusive, market-based energy access solutions in African cities.

Enabling African Cities for Transformative Energy Access Uganda Scale-up

The ENACT Uganda Scale-Up (ENACTUS) project, implemented by ICLEI Africa in partnership with Uganda’s Ministry of Energy and Mineral Development (MEMD) and Kampala Capital City Authority (KCCA), and funded by UK aid through the Transforming Energy Access (TEA) platform, is scaling clean cooking access across six informal settlements in the Greater Kampala Metropolitan Area (GKMA), targeting over 30,000 people.

The project supports clean cooking enterprises to test and scale delivery models tailored to dense urban informal contexts, where affordability and usability are key. ENACTUS provides catalytic support to private-sector actors while strengthening national and local government capacity through MEMD’s new Clean Cooking Unit and GKMA municipal authorities.

By institutionalising lessons from the pilot phase and addressing persistent affordability and financing barriers, ENACTUS is translating proof of concept into systems change demonstrating how clean cooking can be delivered at scale in dense urban environments through locally driven, inclusive energy transitions.

Covenant of Mayors in Sub-Saharan Africa

As host of the Covenant of Mayors Sub-Saharan Africa (CoM SSA) Secretariat, ICLEI Africa has worked with signatory cities to co-develop five project concept notes and two pre-feasibility assessments. Support was then provided to these cities in applying to Project Preparation Facilities to further project development. The Secretariat also offers a suite of climate finance training tools. CoM SSA is co-funded by the European Union (EU), the German Federal Ministry for Economic Development and Cooperation (BMZ), and the Spanish Agency for International Development Cooperation (AECID).CoM SSA is co-implemented by Agencia Española de Cooperación Internacional para el Desarrollo (AECID); the Agence Française de Développement (AFD), the Agence Française d’Expertise Technique Internationale (Expertise France); the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).

Brokering Innovation for Decentralised climate finance & Gender Equality

The BRIDGE project is improving the quantity and quality of local adaptation finance in Cameroon, by bridging knowledge, capacity and information gaps between the public and private sector actors that are crucial to take locally led adaptation projects from idea to implementation. ICLEI Africa is working closely with FEICOM (Special Fund for Equipment and Intercommunal Intervention), the University of Yaoundé 1, Cameroonian municipalities and knowledge broker community-based organisations to:

Map the adaptation finance landscape in Cameroon to increase transparency, and identify opportunities and gaps.
Strengthen the capacities of Cameroonian actors through GESI, finance and governance training and coaching, improving their ability to access and manage quality adaptation finance.
Improve existing finance mechanisms to ensure they are better aligned with the realities and needs of those most impacted by climate change.

By closing the knowledge-to-action gap, BRIDGE is catalysing improved climate finance that is inclusive, effective, and locally grounded.

Accelerating the deployment of e-motos in Rwanda

The Rwanda E-Moto Project is unlocking finance to shift the country’s largest public transport fleet, motorcycle taxis, away from fossil fuels. With targeted financial innovation, the project is driving a national transition to electric motorcycles (e-motos) by mobilising over €120 million in public and private capital.

Funded by the Mitigation Action Facility, ICLEI Africa along with GlobalDF supports the Development Bank of Rwanda (BRD) to implement the E-Moto Credit Enhancement Facility (E-CEF), a multi-instrument blended finance structure that includes guarantees and an €8.3 million first-loss facility. The E-CEF de-risks investment into early-stage e-moto companies, enabling them and micro financiers to access affordable capital and expand charging networks, battery supply, and vehicle fleets, and lower the cost of capital for riders. The Rwanda Green Fund (RGF) is setting up a dedicated €1.4 million Rebate Scheme that lowers barriers for marginalised groups, particularly women and youth, while technical assistance strengthens the institutions leading this transport transformation.

As impact brokers, ICLEI Africa and partners provide tailored financial and technical support to ensure these business models reach bankability. The project improves the enabling environment through capacity building, regulatory support, and awareness campaigns that stimulate both supply and demand.

By showing what’s possible, the project is shifting the narrative on city-level climate finance. It is building a scalable model for e-mobility that not only reduces emissions, but also increases incomes, resilience, health, and local economic opportunities, laying the foundation for wider replication across Africa.

Supporting a just transition in the Steve Tshwete Local Municiaplity

The Steve Tshwete Local Municipality, located in South Africa’s coal belt, is at the heart of the country’s just transition. To navigate this shift, the necessary capabilities, a supportive policy framework, and bankable projects, are required to harness the opportunities of the transition, manage trade-offs, secure financing, and promote justice. In collaboration with ICLEI Africa with funding from the Agence Française de Développement (AFD), the Steve Tshwete Local Municipality has made significant strides in driving a local just transition by:

Integrating just transition into policy – Co-developing a first-of-its-kind, dedicated Just Transition chapter within the municipality’s Integrated Development Plan (IDP), ensuring alignment of medium term planning with just transition objectives.
Methodology for project identification – Establishing a structured approach to identify, prioritise, and develop just transition projects that contribute to a local just transition, are feasible, and able to attract finance.
Preparing finance-ready concept notes – Co-developing three prioritised just transition project concept notes and supporting financial models to attract investment and unlock funding for implementation.
Facilitating investment engagement – Hosting a finance matchmaking event to connect municipal officials with potential financiers, including donors, banks, and development finance institutions (DFIs), to assist with securing project finance.
Creating a Just Transition Roadmap – Documenting the process of policy and project development in the Steve Tshwete Local Municipality to serve as a replicable guide for other municipalities pursuing a just transition.

The Steve Tshwete Local Municipality is building on this work as it continues its pioneering role as a leading municipality in the country’s just transition.

Urban Natural Assets for Africa: Resilience and Restoration for Life

The Urban Natural Assets (UNA) project has played a pivotal role in reshaping urban development pathways in African cities by promoting sustainable development that is deeply interconnected with surrounding urban natural assets, an essential foundation for building local resilience. Central to this effort has been the project’s targeted finance capacity development support. By adopting a whole-of-society approach that actively involves city officials, technical practitioners, communities, researchers and traditional leaders, UNA has invested in equipping local actors with the tools, knowledge, and confidence needed to access and mobilise funding for nature-based solutions (NbS).

Through tailored in-person learning labs, detailed finance flow assessments, and co-created finance training modules, the project has empowered over 80 stakeholders to understand and apply biodiversity finance concepts effectively. These interventions have strengthened the ability of city actors to identify diverse funding opportunities, forge strategic partnerships, and develop bankable concept notes. As a result, cities are now better positioned to align urban planning with nature, enabling the design and implementation of sustainable finance strategies that benefit people, ecosystems, and local economies.

Integrated subnational action for biodiversity

Integrated subnational action for biodiversity, the INTERACT-Bio project, has supported the implementation of National Biodiversity Strategy and Action Plans (NBSAP) through the mainstreaming of biodiversity objectives across city-regions in six Global South countries, including Tanzania and South Africa. The project focused on enhancing the utilization and management of nature in rapidly growing urban areas through nature-based solutions (NbS) to achieve long-term ecological and socio-economic benefits.

This was done through a contextually relevant and co-developed biodiversity finance mechanism for the Waterberg District Municipality, the role model region in South Africa. This work was supplemented with dedicated capacity building in Biodiversity Finance of local and subnational, creating an enabling environment at all governments levels. This, together with the facilitated collaboration between national and subnational decision-makers to incorporate biodiversity considerations into land use and development planning, resulted in actionable plans for other cities to learn from and replicate.