Kenya is among the developing countries that accounted for 50 per cent of total tracked private finance flowing into Africa, according to a new report by Climate Policy Initiative.
With private climate financing valued at close to 4.2 billion dollars (Sh506.5 billion) flowing into the continent in 2022, it means that Kenya and other developing countries received green financing amounting to Sh253.3 billion.
The report has, however, indicated that Africa needs nine times more climate financing annually than the 30 billion dollars (Sh3.6 trillion) inflows it received in 2020 to implement plans to cut emissions and adapt to the impacts of climate change.
The findings show that the private sector's contribution towards climate-related financing in Africa was too low, at only 14 per cent (4.2 billion dollars) of total climate finance in Africa.
This is much lower than in other regions like South Asia (37 per cent), East Asia and Pacific (39 per cent), and Latin America & Caribbean (49 per cent).
The Landscape of Climate Finance in Africa report was commissioned by Financial Services Deepening (FSD) Africa, the Children's Investment Fund Foundation, and UK Aid. The report adds that opportunities exist in the continent's rapid urbanisation, expanding infrastructure, and energy-access needs offer significant investment opportunities.
It states that there is huge potential to translate Africa's sustainable energy needs into investment opportunities and reduce investments in fossil fuels, estimating that Africa will need around 133 billion dollars (Sh15.9 trillion) annually in clean energy investment to meet its energy and climate goals between 2026-2030, according to IEA.
However, annual investment in renewable energy - arguably the most attractive sector for commercial investors - stands at a mere 9.4 billion dollars (Sh1.1 trillion). Among the areas that need a boost in funding, the report says, are agriculture, forestry and other land use, which drew only 16 per cent of the total climate finance in Africa, despite its economic and social importance. "Climate finance will be critical for enabling Africa to adapt to the growing impacts of climate change," said FSD chief executive Mark Napier.