Climate financing: How will Africa fund climate change mitigation?

Africa faces an annual climate finance gap of $125 billion (Sh16.18 trillion), highlighting the urgent need to channel more investment to the cities, regions and communities leading climate action. The continent requires an estimated $155 billion (Sh20 trillion) to meet its annual climate and development goals, yet it only mobilises around $30 billion.

To address the challenge, national and subnational leaders convened during the 2026 Clean Air Transport Finance Academy for high-level dialogue, “Unlocking Subnational Climate Finance in Africa: From Barriers to Scalable Solutions.”

Co-hosted by the Global Covenant of Mayors for Climate & Energy (GCoM) and C40 Cities in partnership with the World Resources Institute (WRI), the forum explored how stronger partnerships between national and local governments can help unlock climate finance and accelerate action where it is needed most.

Participants noted that closing the gap will require both increased climate finance and stronger systems to help subnational governments access and deploy funding at scale.

Local leaders are responsible for delivering many of the infrastructure, resilience and development investments needed to achieve national climate goals. Yet they often face significant barriers, including limited access to financing, fragmented institutional arrangements, and regulatory constraints that restrict investment flows.

Building on momentum generated by African mayors and governors through an open letter to finance ministers last year, participants explored practical pathways for overcoming these challenges.

Discussions focused on strengthening intergovernmental coordination, improving policy and regulatory frameworks, and deploying proven financial mechanisms that can unlock investment for climate action at the local level.

“Last year in Nairobi, over 40 African mayors and governors came together to send the message: Cities and regions are ready to lead climate action,  but they cannot do it alone,” said Njenga Muchekehu, C40 Cities’ Deputy Regional Director for Africa. “The conversation has moved from asking why cities need climate finance to identifying how national governments can help deliver.”

The Coalition for High Ambition Multilevel Partnerships (CHAMP) high-level dialogue convened senior policymakers, city leaders and climate finance experts from across Africa. Participants included representatives from the governments of two CHAMP-endorsing countries (Kenya and Ghana) and South Africa, alongside experts from the WRI and delegates from 12 African cities.

Speakers shared experiences and practical approaches to scaling subnational climate finance.

Drawing on experiences from Kenya, Ghana and South Africa, the panel highlighted how national and local governments are removing barriers and unlocking climate finance at scale.

In Kenya, a combination of fiscal decentralisation, devolved climate finance mechanisms and private-sector reforms is helping counties access and deploy climate finance more effectively. Initiatives such as County Climate Change Funds and Financing Locally-Led Climate Action (FLLoCA) are creating pathways for local governments to translate climate priorities into investment-ready projects.

“Kenya’s experience shows that climate finance reaches communities most effectively when national and county governments work together. Through performance-based grants and pooled financing arrangements, we are strengthening counties’ ability to plan, access and manage climate investments,” said Isabel Joy Ochieng, Kenya’s Assistant Director, Financial and Sectoral Affairs (National Treasury).

In Ghana, fiscal decentralisation reforms are strengthening the role of local governments in delivering climate and development priorities, while creating a more enabling framework for investment at the local level.

“Ghana is advancing a range of reforms to ensure resources, responsibilities and decision-making are aligned at the local level. Through the principle of ‘funds follow functions’, increased allocations under the District Assemblies Common Fund, the forthcoming National Decentralisation Policy and emerging tools, we are creating stronger foundations for local governments to access finance and contribute to national climate and development objectives,” said Eunice Inkum, Principal Economic Officer, Government of Ghana (Ministry of Finance).

In South Africa, ongoing reforms are creating new opportunities for cities to play a greater role in climate finance, investment planning and implementation of national climate priorities. Dr Letsepa Pakkies, South Africa’s Acting Chief Director, Intergovernmental Policy, National Treasury, said: “Ongoing municipal and fiscal reforms are helping create an environment where cities can play a stronger role in driving climate action and investment.”

As African countries seek to close the climate finance gap, the lessons emerging from Kenya, Ghana and South Africa provide a practical roadmap for scaling local climate action and building more resilient, sustainable communities across the continent.