Easing Africa's Climate Crisis: Can Green Bonds Help Close the Climate Finance Gap?

The document argues that green bonds are an under-utilised tool that could help Africa meet its estimated USD 2.8 trillion climate finance need by 2030. While the global green bond market reached approximately USD 2.8 trillion in 2023, Africa's share is less than 1%, representing only USD 5.1 billion. The paper highlights successful issuances in South Africa, Nigeria, and Zambia, while identifying key barriers such as low liquidity, inadequate regulation, and high transaction costs. It calls for stronger public-private collaboration and international support at COP29 to create enabling environments for green bond proliferation in Africa.

• Africa faces a significant climate finance deficit, with estimates suggesting the continent requires USD 2.8 trillion by 2030 to implement its Nationally Determined Contributions (NDCs).
• Despite the rapid growth of the global green bond market, which reached approximately USD 2.8 trillion in 2023, Africa's participation remains minimal, accounting for less than 1% of the market at USD 5.1 billion.
• Green bond issuances in Africa are growing, with a 125% increase in 2023 to reach USD 1.4 billion. Notable recent activity includes Côte d'Ivoire's USD 1.1 billion Sustainability Bond in 2024.
• South Africa and Nigeria have emerged as leaders in the African market; South Africa pioneered the market with a sustainable finance taxonomy in 2017, while Nigeria dominates public issuance and accounts for approximately 99% of green bonds on the Nigerian Stock Exchange.
• Zambia has successfully integrated green bonds into its climate strategy, issuing its first green bond of USD 200 million via the Copperbelt Energy Corporation in 2023, which was oversubscribed by 178%.
• Several systemic barriers hinder the growth of green bonds in Africa, including low investor awareness, a lack of independent local verifiers, high transaction costs, and a limited pipeline of bankable projects that are large enough to attract major investors.

APA

Nkombo, N. (2024). Easing Africa's Climate Crisis: Can Green Bonds Help Close the Climate Finance Gap? Africa Policy Research Institute. https://afripoli.org/easing-africas-climate-crisis-can-green-bonds-help-close-the-climate-finance-gap

Chicago

Nkombo, Nachilala. Easing Africa's Climate Crisis: Can Green Bonds Help Close the Climate Finance Gap? Africa Policy Research Institute, 2024. https://afripoli.org/easing-africas-climate-crisis-can-green-bonds-help-close-the-climate-finance-gap.

Wikipedia

{{cite report |last1=Nkombo |first1=Nachilala |title=Easing Africa's Climate Crisis: Can Green Bonds Help Close the Climate Finance Gap? |publisher=Africa Policy Research Institute |date=11 November 2024 |url=https://afripoli.org/easing-africas-climate-crisis-can-green-bonds-help-close-the-climate-finance-gap |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{nkombo2024easing, author = {Nkombo, Nachilala}, title = {{Easing Africa's Climate Crisis: Can Green Bonds Help Close the Climate Finance Gap?}}, institution = {Africa Policy Research Institute}, year = {2024}, month = nov, url = {https://afripoli.org/easing-africas-climate-crisis-can-green-bonds-help-close-the-climate-finance-gap}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }