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Sustainable Finance Centre
ABOUT
Finance is urgently needed to ensure Africa’s cities are resilient to global sustainability challenges and to develop them into green economic hubs of the future. Africa received just $30 bn of global $1.3 tn climate finance in 2022 – less than 3% 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 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 subnational projects, ensuring we move from policy to practice. By playing the crucial and often under-resourced knowledge broker role, needed to bridge divides between crucial stakeholders, the SFC is ensuring that all actors involved in the project development value chain work in an integrated manner – increasing the success of local projects reaching implementation.
The SFC works across ICLEI Africa’s workstreams, performing the following activities:
- Project development support throughout the entire development lifecycle, in partnership with Development Finance Institutions and Project Preparation Facilities.
- Co-developing of new, and tailoring of existing, financial instruments for local-level projects, in partnership with Multilateral Development Banks and Development Finance Institutions.
- Piloting of business models to support SMMEs in the development and deployment of context relevant sustainable technologies and solutions.
- Capacity building and tool development on a variety of topics and sectors relevant to unlocking finance for local sustainability action.
Key projects supported by the SFC to date
Developed four renewable energy projects for intermediary cities in South Africa, with three of these projects (the first three municipal projects to do so) having entered the Development Bank of Southern Africa’s (DBSA’s) Project Preparation Facility through the Alternative Finance for Municipal Embedded Generation Project (AFMEG). Once implemented, these projects will unlock R 2 billion in climate finance and save over 36 million tons of CO2 Furthermore, these projects created a pathway for municipalities in South Africa to unlock climate finance from DBSA’s Embedded Generation Investment Programme. This project was supported by the UK Government through UKPACT.
The Brokering Innovation for Decentralised climate finance & Gender Equality (BRIDGE) project is improving the access by subnational actors to appropriate finance for locally-led and gender-responsive climate change adaptation action in Cameroon, with learnings scaled to the central Africa region and beyond. The project is addressing knowledge-to-action gaps that are hindering locally-led adaptation projects from being financed, working closely with FEICOM (Fonds Special d’Equipement et d’Intervention Intercommunale), the University of Yaoundé 1, and Cameroonian municipalities and knowledge broker community-based organisations. co-funded by the Ministry of Foreign Affairs of the Netherlands and the International Development Research Centre.
Co-developed a financial mechanism, called the NAMA e-mobility programme, with the Rwanda Green Fund (FONERWA), Development Bank of Rwanda and Carbon Trust, to bolster the City of Kigali’s electric mobility sector. Once implemented, the project would mitigate 5 million tonnes of CO2eq by 2040, unlock EUR 229 million of finance and provide over 180 000 drivers with clean mobility alternatives. This project was supported by GIZ through the NAMA facility.
With support from the Agence Française de Développement (AFD), the SFC is supporting Steve Tshwete Local Municipality to develop just transition projects, to aid the municipality’s transition away from coal. This project is not only providing support in co-developing a just transition roadmap and pipeline of projects for Steve Tshwete Local Municipality, with three projects taken to pre-feasibility stage, but is also defining what just transition projects mean within the context of South African intermediate cities.
- 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).
