African nations committed to cutting emissions and adapting to warming under the Paris Agreement, but needed money is not arriving in sufficient amounts or on affordable terms.
The continent received an average of US$43.7 billion a year in climate finance in 2021 and 2022, which is only about 23% of what is required.
This means Africa needs roughly four dollars for every dollar it currently receives.
In an analysis published by The Conversation, economist Carlos Lopes argues that the international financial system is effectively pricing much of the continent out of implementing its climate plans.
Lopes, who has a background at the United Nations and the African Union, contends that the current system makes finance more expensive and difficult to obtain for the countries whose vulnerability makes their need greatest.
The distribution of the money that does arrive is also uneven. The ten African countries most vulnerable to climate change receive only 11% of the continent’s climate finance, while another ten attract 76% of private climate investment.
Current finance covers only 18% of planned mitigation projects and 20% of adaptation costs.
Lopes argues that Africa must negotiate for affordable funding that builds its industries, energy systems, transport, cities and skills, rather than simply asking for more money labelled “climate finance”.
He suggests climate finance should not be separated from development funding, as investment in electricity, transport, cities, irrigation, technology, manufacturing and education is needed both to grow economies and to protect people from climate change.
The history of climate finance promises shows a gap between announcement and delivery. In 2009, developed countries committed to providing developing countries with US$100 billion in climate finance every year, with the money supposed to be available annually by 2020.
According to the Organisation for Economic Co-operation and Development’s calculations, the only time more than US$100 billion in climate finance reached the developing world was in 2022, two years after the deadline.
Lopes notes that the US$100 billion target was never calculated based on what developing countries actually needed to respond to climate change. It was a number negotiated by governments through a political process.
At the COP29 climate negotiations in Baku, Azerbaijan, governments agreed to provide developing countries with at least US$300 billion a year by 2035.
They also set a much bigger goal of increasing climate finance from all sources to US$1.3 trillion a year by 2035.
However, the design of this promise raises questions: the guaranteed target is US$300 billion a year, the deadline is still ten years away, the money can come from a “wide variety of sources”, and the much larger US$1.3 trillion goal depends on money from everyone, including governments, private investors, international financial institutions and alternative sources.
Money promised is not money delivered
Lopes points out that the larger the announced amount becomes, the less clear it is who is responsible for providing the money. He distinguishes between pledges, which are promises; commitments, which are formal allocations; and disbursements, which are actual payments.
Loans are not grants, private finance is not public funding, and a promised trillion dollars does not simply appear in African budgets.
For example, the 2022 Bridgetown Initiative helped international development banks create about US$400 billion in additional lending capacity over ten years. However, this must serve many countries, not just those in Africa.
Lopes observes that governments and financial institutions have become adept at designing plans to mobilise trillions, but the trillions themselves remain elusive.
The price of money
The cost of finance is as important as its quantity. Financing large wind and solar projects costs at least two to three times more in Africa than in advanced economies and China, because borrowing costs and investor returns are higher.
Renewable energy projects require large upfront investment, so expensive finance raises the price of electricity. Cutting average financing costs by one percentage point would reduce wind and solar generation costs by at least 8%.
Lopes argues that climate negotiations must address interest rates, guarantees, currency risks and the additional costs charged when lenders consider countries risky. Africa has around 20% of the world’s population but attracts less than 3% of global energy spending.
It does not lack bankable sunlight; it lacks affordable capital.
Countries more at risk of climate disasters are also seen as riskier to lend money to, so they pay more for climate finance. This means they cannot invest enough in building infrastructure that can withstand climate disasters.
When these disasters strike, African countries are likely to be charged more again for loans they take out to repair the damage.
Africa must produce green technology
Climate diplomacy has become more difficult because climate policy is now closely tied to industrial and geopolitical competition.
Rich countries subsidise their own battery, electric-vehicle, hydrogen and renewable energy industries, but African countries are told to attract private investors if they want to build those industries.
Africa holds about 30% of the world’s critical mineral reserves, including 19% of those needed for electric vehicles. Lopes argues that Africa is therefore already part of the just transition to green energy.
The question is only where the continent participates in the value chain – as an exporter of raw materials like lithium and cobalt or as a manufacturer of batteries and other green products.
If Africa supplies the minerals while manufacturing, technology and highly productive jobs remain elsewhere, the green transition will repeat old economic inequalities.
Lopes argues that African climate negotiations must therefore focus not only on finance, but on building African industries, skills and economic power.
What needs to happen next
Lopes is unconvinced that “climate finance” is the right organising concept for Africa. He argues it separates what is fundamentally one development challenge.
Africa needs energy systems, electricity grids, transport, resilient cities, irrigation, digital infrastructure, manufacturing capabilities and human capital. Together, these investments determine the continent’s development, resilience, productivity, industrialisation and future emissions.
Calling some “climate” and others “development” may make sense to international funding institutions, but it makes much less sense from the perspective of Africa’s structural transformation.
Africa received only 23% of the climate finance it needs and attracts less than 3% of global energy investment, despite having about a fifth of the world’s population. Lopes argues this points to something larger than a climate-finance gap.
Instead of continually asking how Africa can become more attractive to international capital, he suggests asking why capital is most expensive where development and climate needs are greatest.
The measure of climate justice, Lopes concludes, is not how much money is labelled “climate finance”, but whether it arrives affordably and helps Africa manufacture, trade and build its own productive economy.
Otherwise, the just transition will be the old international division of labour powered by renewable energy. African climate diplomacy should therefore use the global transition to change the terms on which the continent finances, produces, trades and transforms.
This is an extract from the Pro VC lecture that Lopes gave at the University of the Witwatersrand on 2 September 2026.
Source: The Conversation