The South African Climate Finance Landscape 2023

The South African Climate Finance Landscape 2023 report finds that while annual tracked climate finance reached an all-time high of R131 billion between 2019 and 2021, this remains significantly below the estimated annual needs of R334 billion to R535 billion. The landscape is heavily dominated by domestic private sector debt, with clean energy receiving the vast majority of funding, while adaptation and low-carbon transport remain severely underfunded.

• Tracked annual climate finance in South Africa averaged R131 billion between 2019 and 2021, which is three to five times lower than the estimated annual requirements of R334 billion to meet net zero goals by 2050 and R535 billion to meet NDC targets by 2030.
• Domestic sources provided 91% of tracked climate finance, while international sources contributed only 9%. Within the international flows, Western Europe was the largest contributor at 57%.
• The private sector is the primary driver of climate finance, accounting for 86% (R113 billion p.a.) of annual investments, with commercial banks (61%) and institutional investors (29%) as the main intermediaries.
• Public sector contributions averaged R18 billion annually (14% of total), with Development Finance Institutions (DFIs) providing 55% (R10 billion p.a.) and the South African government providing 33% (R6 billion p.a.).
• Market-rate debt is the dominant financial instrument, comprising 75% (R98 billion p.a.) of climate finance with an average cost of capital between 10% and 12%. Equity accounted for 18% (R23 billion p.a.), while grants and concessional debt each represented 1% and 2% respectively.
• Climate finance is heavily skewed toward mitigation, which represents 81% (R105 billion p.a.) of total flows, while adaptation finance lags at 12% (R16 billion p.a.) and dual-benefit finance accounts for 7% (R10 billion p.a.).
• Clean energy is the dominant destination for investment, receiving over 63% of total tracked flows, driven by loadshedding, falling technology costs, and rising electricity prices.
• Low-carbon transport is severely underfunded, with only R87 million invested during the tracked period, despite the sector contributing more than 10% of South Africa's carbon emissions.
• Investment in the water sector increased from an annual average of R1.9 billion in 2017/18 to R4.8 billion in 2019-21, focusing primarily on wastewater and water treatment projects.
• Significant barriers to scaling finance include a lack of bankable, investment-ready projects, a nascent venture capital industry, and high perceived risks in adaptation and nature-based projects where returns are not yet evident.

APA

Climate Policy Initiative (2023). The South African Climate Finance Landscape 2023. https://www.climatepolicyinitiative.org/wp-content/uploads/2023/11/The-South-African-Climate-Finance-Landscape-2023.pdf

Chicago

Climate Policy Initiative. The South African Climate Finance Landscape 2023. 2023. https://www.climatepolicyinitiative.org/wp-content/uploads/2023/11/The-South-African-Climate-Finance-Landscape-2023.pdf.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=The South African Climate Finance Landscape 2023 |date=2023 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2023/11/The-South-African-Climate-Finance-Landscape-2023.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2023south, author = {{Climate Policy Initiative}}, title = {{The South African Climate Finance Landscape 2023}}, institution = {Climate Policy Initiative}, year = {2023}, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2023/11/The-South-African-Climate-Finance-Landscape-2023.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }