Redefining Climate Finance: A Dual Mandate for the Dual Transition

The Africa Policy Research Institute argues that climate finance in Africa must shift from a narrow focus on large-scale infrastructure to a 'dual mandate' that equally supports decentralized, consumer-led energy transitions. The document asserts that while utility-scale projects are foundational, the most dynamic energy growth is occurring through off-grid systems and MSMEs, which currently lack the structured local-currency credit and trade finance necessary to scale.

• Africa's energy transition is occurring via two simultaneous and complementary tracks: a centralized track involving sovereign investment and power pools, and a decentralized track consisting of community-owned minigrids, solar rooftops, and pay-as-you-go devices.
• Current climate finance is structurally narrow, prioritizing large-ticket infrastructure, sovereign green bonds, and multilateral guarantees, which fails to reach households, traders, and MSMEs that drive the informal energy economy.
• The document proposes a 'dual mandate' for climate finance consisting of infrastructure finance for utility-scale generation and national grids, and consumer and trade finance to support retail-scale assets, microloans, and cross-border component imports.
• National development banks (NDBs) should act as refinancers and risk aggregators rather than direct lenders, providing wholesale local-currency credit lines, blended guarantee pools, and securitizing consumer loans for green bond markets.
• The document cites Pakistan, South Africa, and Nigeria as examples where a lack of inclusive financial design for energy transitions has led to a 'burden shift,' where affluent users exit the grid for self-generation while the poor face higher tariffs and deteriorating reliability.

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} }