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Press release

New study exposes lack of climate adaptation finance to African countries and need for targeted efforts

As world leaders at the UN General Assembly are expected to stress their commitment to delivering climate finance on Tuesday, a new SEI study reveals that adaptation-related finance to African countries between 2014 and 2018 was well below the amounts needed to tackle the impacts of climate change.

Georgia Savvidou, Aaron Atteridge / Published on 21 September 2021
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Annika Flensburg

Quantitative analysis shows that finance targeting mitigation was almost double that for adaptation. That is in sharp contrast to the UN Secretary General’s call for climate finance to be at least equally split between mitigation and adaptation. The study published in the journal Climate Policy also finds that funders have not strategically targeted adaptation finance to countries that are the most vulnerable.

African countries are among the most susceptible to the impacts of climate change in terms of food security, health, the economy and ecosystems. At the same time, their contributions to global warming are extremely limited. Without inclusive development and targeted adaptation measures, climate change is projected to push tens of millions more Africans into extreme poverty by 2030.

This study closes an important knowledge gap, as there has been no extensive mapping of climate finance to Africa to date. It tracks finance flows targeting adaptation to Africa from bilateral and multilateral funders from 2014–2018 and compares them to the amounts provided for mitigation. The mapping is based on data from the Organisation for Economic Co-operation and Development (OECD) and includes support from bilateral and multilateral funders, including multilateral developing banks (MDBs). A recently updated OECD report found that developing countries were falling roughly $20 billion short of their goal of mobilizing $100 billion in climate finance per year as of 2020. However, the report does not provide a breakdown for Africa by region, country or sector for finance targeting adaptation, mitigation or both simultaneously, nor does it identify the main providers of adaptation finance.

The kind of mapping we have undertaken is crucial to understanding finance for adaptation in this particularly climate-vulnerable part of the world, and then being able to take it further and examine its effectiveness.

Lead author Georgia Savvidou

The research further shows that only two sectors, agriculture and water supply and sanitation, received half of the adaptation-related finance. It also reveals that more adaptation-related finance was provided as loans (57%) as opposed to grants (42%), which is problematic from a climate justice perspective as grant-based finance is more appropriate for highly indebted and vulnerable countries with little responsibility for climate change.

Regarding disbursement, the analysis found that adaptation finance for African countries was disbursed at a lower rate (46%) than mitigation finance (56%), and at a much lower rate than that for all of development finance to Africa over the same period.

International public finance can only make an impact once it is actually disbursed, but we see that adaption finance is disbursed at a particularly low rate. This suggests that a weak governance system and low institutional capacity impede the implementation of adaptation projects in particular. However, funders could overcome this problem by providing more grant-based funding, which has higher disbursement rates than loans.

Lead author Georgia Savvidou

Key policy insights

  • Between 2014 and 2018, adaptation-related finance committed by bilateral and multilateral funders to African countries remained well below $5.5 billion per year, or roughly $5 per person per year. These amounts are well below the estimates of adaptation costs in Africa.
  • Funders have not strategically targeted support for adaptation activities towards African countries with the highest vulnerability to climate change.
  • Lessons from countries that have been more successful in accessing finance point to the value of more sophisticated domestic adaptation policies and plans, alignment with priorities of the nationally determined contributions, meeting funding requirements of specific funders and strategic use of climate funds by national planners.
  • For all funders excluding MDBs (for which disbursement data are unavailable – see Supplementary Annex A), actual disbursements of adaptation-related finance for the period from 2014–2018 amounted to $4.7 billion or only 46% of the corresponding commitments over that period.
  • The low disbursement ratio for adaptation finance in this period in Africa relates to barriers impeding the full implementation of adaptation projects: low grant to loan ratio, requirements for co-financing, rigid rules of multilateral climate funds and inadequate programming capacity within many countries.
Topics and subtopics
Climate : Finance, Adaptation / Economy : Finance
Related centres
SEI Headquarters
Regions
Africa

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