The South African Climate Finance Landscape 2025

The South African Climate Finance Landscape 2025 reports an annual average of ZAR 188.3 billion in climate finance for 2022–2023, though this remains well below the estimated annual need of up to ZAR 499 billion. Investment is heavily skewed toward the energy sector, which receives 74.1% of total flows, primarily for renewable electricity generation. In contrast, adaptation finance is lagging, accounting for only 11.3% of tracked flows. While domestic sources provide nearly 60% of funding, international flows are dominated by public development finance institutions, particularly from Western Europe. The report highlights significant barriers, including grid bottlenecks, policy uncertainty, and a lack of concessional capital for high-risk or non-revenue-generating adaptation and just transition projects.

• Annual climate finance in South Africa averaged ZAR 188.3 billion for the 2022-2023 period, but this is insufficient to meet NDC and net-zero targets, which may require up to ZAR 499 billion per year.
• The energy sector dominates climate investment, receiving an annual average of ZAR 139.5 billion (74.1% of total flows), with a strong focus on renewable electricity generation such as solar PV (ZAR 64.8 billion) and wind (ZAR 14.2 billion).
• Adaptation finance is significantly underfunded, representing only 11.3% (ZAR 21.2 billion) of tracked finance, which is far below the African average of 33.7%.
• Domestic sources provided 59.4% of climate finance, with commercial banks contributing the most at an annual average of ZAR 36.6 billion.
• International climate finance is primarily public (80.1%), with Western Europe providing 71.2% of these flows, largely reflecting commitments from the Just Energy Transition Partnership (JETP).
• Just transition-aligned flows are emerging but modest, averaging ZAR 16.0 billion annually, with 82% of this funding directed toward the energy sector.
• Market-rate debt (45.0%) and equity (33.1%) are the dominant financial instruments, while concessional finance and grants collectively account for less than 15% of total flows.
• Significant infrastructure constraints, particularly transmission and distribution (T&D) bottlenecks, limit the scaling of renewable energy despite high generation investment.
• The petrochemicals and chemicals sector has the highest industrial investment requirement, estimated at ZAR 420 billion to reach net-zero by 2050.

APA

Climate Policy Initiative (2025). The South African Climate Finance Landscape 2025. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/10/The-South-African-Climate-Finance-Landscape-2025.pdf

Chicago

Climate Policy Initiative. The South African Climate Finance Landscape 2025. 2025. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/10/The-South-African-Climate-Finance-Landscape-2025.pdf.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=The South African Climate Finance Landscape 2025 |date=2025 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2025/10/The-South-African-Climate-Finance-Landscape-2025.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2025south, author = {{Climate Policy Initiative}}, title = {{The South African Climate Finance Landscape 2025}}, institution = {Climate Policy Initiative}, year = {2025}, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2025/10/The-South-African-Climate-Finance-Landscape-2025.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }