Redefining Climate Finance: A Dual Mandate for the Dual Transition

The document argues that Africa's energy transition is occurring along two simultaneous tracks: centralised infrastructure and decentralised, bottom-up systems. It contends that current climate finance is too narrow, focusing almost exclusively on sovereign borrowers and large projects while ignoring the retail layer of the transition. To address this, the author proposes a dual mandate that combines infrastructure finance with consumer and trade finance. The document suggests that National Development Banks (NDBs) should act as refinancers and risk aggregators to provide local-currency credit, blended guarantees, and capital recycling mechanisms to support households, MSMEs, and informal trade networks.

• Africa's energy transition is characterized by a duality where centralised systems (substations and power pools) and decentralised systems (solar rooftops and community minigrids) are being constructed simultaneously rather than sequentially.
• Existing climate finance mechanisms are structurally narrow, prioritising large-scale infrastructure and sovereign borrowers while failing to reach the consumers, households, and MSMEs that drive the decentralised energy market.
• A lack of inclusive financial design can lead to an 'exit strategy' for the affluent, where wealthy users move to self-generation while the poor are left with a deteriorating and more expensive public grid, as seen in Pakistan and South Africa.

APA

Clark, E. K. (2025). Redefining Climate Finance: A Dual Mandate for the Dual Transition. Africa Policy Research Institute. https://afripoli.org/redefining-climate-finance-a-dual-mandate-for-the-dual-transition

Chicago

Clark, Ebipere K. Redefining Climate Finance: A Dual Mandate for the Dual Transition. Africa Policy Research Institute, 2025. https://afripoli.org/redefining-climate-finance-a-dual-mandate-for-the-dual-transition.

Wikipedia

{{cite press release |last1=Clark |first1=Ebipere K. |title=Redefining Climate Finance: A Dual Mandate for the Dual Transition |publisher=Africa Policy Research Institute |date=19 August 2025 |url=https://afripoli.org/redefining-climate-finance-a-dual-mandate-for-the-dual-transition |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{clark2025redefining, author = {Clark, Ebipere K.}, title = {{Redefining Climate Finance: A Dual Mandate for the Dual Transition}}, publisher = {Africa Policy Research Institute}, year = {2025}, month = aug, url = {https://afripoli.org/redefining-climate-finance-a-dual-mandate-for-the-dual-transition}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }