Africa contributes less than 4% of global cumulative emissions yet bears some of the heaviest costs of climate disruption — in agricultural productivity, in water systems, in the health infrastructure that climate shocks overwhelm precisely when most needed. The capital flowing into African climate is largely structured for markets that don’t look like Kenya, Rwanda, or Ghana — built around return timelines, risk thresholds, and technical assistance models that were designed elsewhere and applied here without modification. The enterprises are performing. The capital is pointed in the wrong direction. That was the argument the climate sessions kept returning to, and it came with specific diagnoses and, in several cases, specific fixes. Read on.
Donors Are Building Capacity They Are Not Staying Long Enough to Use
Climate risk insurance for smallholder farmers has been attempted repeatedly across Africa. It has not been scaled. The reason is not the product because insurance products work! The reason is that donor money arrives, builds some capacity, then disappears before that capacity can be put to use. No institutional infrastructure is left behind. Reinsurers will not participate because transparency standards are too low, and they cannot price the risk. Without reinsurer participation, there is no scale. And without sustained investment in the data infrastructure that makes parametric insurance viable, the cycle repeats every time a new donor programme arrives.
Guyana broke this cycle by building a national weather station programme: a government investment in the data infrastructure that makes parametric products viable over time, not just within a project window. Africa needs the same thing. Not donor-funded pilots that disappear when the funding does, but government and DFI investment in the underlying data systems that make insurance markets function.
“Guyana built a national weather station programme as a rare example of government investment in the data infrastructure that makes parametric insurance viable. We need similar investments across African markets.”
— Anuj Kumbhat, Co-Founder & Managing Director, WRMS Global
Short Grant Cycles Are Actively Destroying What They Set Out to Build
A climate business needs at least four years to learn, adapt, and demonstrate enough traction to attract the next round of capital. Most grant cycles do not allow for that. The result is not just that businesses fail — it is that the learning fails with them. Every time a promising solution gets defunded before it can prove itself, the ecosystem loses the knowledge of what worked, what didn’t, and what would have happened if the money had stayed a little longer. Carbon credit registration is one mechanism that breaks this cycle. By creating a verifiable forward-looking revenue stream, it gives a business a financial future that exists beyond the donor cycle.
Solid’Africa in Rwanda demonstrates what this looks like in practice: over 10 million meals delivered to schools and hospitals, 7,000 farmers supported through the transition to regenerative agriculture, three clean-energy kitchens serving 29,000 students daily — and USD 7 to 10 million in outcomes-based financing now being structured around the model. It works because the structure solves two problems simultaneously: farmers get a stable institutional buyer through Rwanda’s national school feeding programme while they absorb the income drop of transitioning to regenerative practices, and the schools get reliable supply chains and clean cooking infrastructure in return. That is not a grant-funded pilot. It is a business model designed to outlast its funders.
The Capital Coming Into African Climate Is Built for Someone Else’s Context
Climate funds operating in Africa are largely adapted from templates designed elsewhere. The deal structures, return timelines, risk thresholds, and technical assistance models were built for markets that do not look like Nairobi, Kampala, or Accra. When those templates are applied to African agri-SMEs, smallholder-facing businesses, and enterprises operating in fragmented regulatory environments, they do not fit. The businesses get squeezed into structures that were never designed for them and then get blamed when the fit doesn’t work.
Acele Africa has repurposed over 6,000 battery cells, reducing battery system costs by two thirds. Baridi’s cold chain technology is deployed across 10 counties in Kenya, preserving more than 10 million units of agricultural produce. These are not pilot projects. They are businesses with real numbers, real customers, and real impact — presenting at a showcase session rather than closing growth rounds, not because they have underperformed but because the capital that should be reaching them was structured for a different context entirely. The session was clear on what the alternative looks like: funds built for the African climate context from the ground up, with longer tenors, flexible disbursement, and technical assistance designed around what enterprises in these markets actually need.
The Capacity Gap Is Not Where Everyone Thinks It Is.
When funders talk about capacity building in climate finance, they mean the enterprises — the last-mile implementers, the smallholder farmers. That is where the training programmes go and where the technical assistance is directed. The capacity gap runs much higher up the chain. The policymakers who should be creating enabling environments for climate investment do not always understand what they are enabling.
The bankers who should be structuring climate loan products do not have the tools or the training to price climate risk. The financial intermediaries sitting between capital and enterprise do not know how to move it effectively.
Directing all capacity building at the last mile while leaving the rest of the system under-equipped is like training the runners while ignoring the track. The fix is not more last-mile training. It is targeted investment in the intermediary layer: regulatory literacy programmes for policymakers, climate risk pricing tools for banking teams, and deal-flow support for the financial institutions that sit between capital providers and climate enterprises.
The sector needs funds that are built for the African climate context from the ground up, not adapted from templates designed elsewhere.
— Sawa Nakagawa, Managing Director, Alphamundi Foundation
The Solutions Work. They Were Never Built to Travel.
Good climate innovations are being built across Africa. The problem is that they are being built in isolation as standalone products rather than modular systems that other actors can plug into and scale. A solution that works in Nairobi has to be completely renegotiated to work in Kampala. Regulatory fragmentation makes cross-border scale almost impossible. And because these solutions are not designed to be interoperable, the ecosystem around them cannot coordinate. Interoperability here means designing solutions with replicable components from the start, from common data standards, shared API layers, regulatory templates that can be adapted rather than rebuilt, and financing structures portable across jurisdictions. The AI and climate action innovation challenge across Kenya, Ghana, and Rwanda — convened by Intellecap — is one attempt to build something different: not just solutions, but a shared vocabulary and a shared pipeline across three countries that can eventually function as an African innovation commons. That is the architecture the sector needs more of.
Clean Cooking Enterprises Are Borrowing at the Wrong Price Because They are Classified as the Wrong Thing
Kenya has the technology. Improved stoves, electric cooking solutions, bagasse briquettes, and solar cooking technologies all exist and have been validated. The enterprises building them are not failing because of bad products or weak demand. They are failing because they are classified as SMEs and borrowing at SME rates — short tenors, high interest, high risk. That classification determines everything: what financing is available, at what price, and on what terms.
A dedicated Clean Cooking Act that reclassifies clean cooking as national infrastructure would change that. Infrastructure financing is long-term and low-interest. BURN Manufacturing — 3 million stoves sold across 10 countries, USD 1 billion in cumulative fuel savings for customers — is evidence that the market is real and the enterprises are performing. The classification is what’s holding the capital back, not the business case.
The numbers behind the gap are stark. In Sub-Saharan Africa, 960 million people rely on traditional polluting cooking methods, a burden that falls disproportionately on women and girls. That figure is projected to rise to 1 billion by 2030, making Africa the only region where the clean cooking deficit is increasing. Achieving universal access to clean cooking in Africa by 2030 requires an annual investment of USD 8 billion. Currently, just one quarter of the required capital flows into the sector.
A landscape study — Unlocking Climate Finance Pathways for the Clean Cooking Sector in Africa, published by Intellecap in 2025 with support from the International Development Research Centre (IDRC), mapped precisely where that gap sits and how enterprises can begin to close it. Carbon finance, particularly through Voluntary Carbon Markets, has emerged as a transformative mechanism enabling clean cooking project developers to generate revenue through verified emission reductions. Yet high entry costs, limited buyers, and low carbon credit prices limit Africa’s participation. The continent contributes just over 10% of global credits, underscoring the need for broader investment and market access strategies.
The study’s most actionable finding is one the sessions reinforced directly: most clean cooking enterprises are using carbon revenues to subsidise the cost of clean cooking products and increase market access for cleaner technologies — lowering the upfront cost for end-users and, in some cases, distributing revenue directly as cashback incentives. This is carbon finance doing exactly what it should — not generating returns for intermediaries but reducing the price barrier that keeps proven technologies out of the households that need them. Forward Purchase Agreements are the most common financing mechanism enterprises are using to unlock carbon revenues and support business expansion, and compliance markets operating under Article 6 of the Paris Agreement are beginning to offer more predictable pricing structures than the volatile voluntary markets that have historically dominated. The infrastructure for a functioning clean cooking finance market exists. What is missing is the classification framework and the policy environment that would bring it to scale.
The Direction of Travel
The sessions did not end in despair. They ended with a clear, shared diagnosis: the problem is not that Africa lacks climate solutions, enterprises, or ambition. The problem is that the systems built to move capital, build capacity, and scale innovation were not designed for this context. Fixing that does not require reinventing finance from scratch. It requires reclassifying clean cooking as infrastructure, extending grant timelines to match business cycles, building capacity at the intermediary layer rather than only the last mile, and designing solutions that are modular enough to cross borders without being rebuilt from the ground up. The capital exists. The enterprises exist. What needs to change is the architecture connecting them.
