Impact Investors are favouring digital applications and solar power solutions to reduce carbon emissions in East Africa over crucial water and temperature technologies that could protect East Africans from the effects of the escalating climate crisis, a report released today by the African Venture Philanthropy Alliance (AVPA), supported by The Lemelson Foundation reveals.
Unveiled as the world prepares for the COP 28 Climate Conference that has pledged to address adaptation funding for Africa, the joint research with AVPA, Weber Shandwick and Geopoll found private investors remained predominantly focused on initiatives aimed at reducing Africa’s carbon footprint. In comparison, innovations aiming to mitigate adverse climate change effects such as rising temperatures, water scarcity, and extreme weather conditions are primarily reliant on piecemeal funding from philanthropists, highlighting a gap in systematic investment towards climate adaptation in Africa.
“With public finance covering less than a tenth of Africa’s climate costs, and private finance just 1.5%, Africa’s ability to survive its rising temperatures and erratic seasons demand engagement and now depends on audacious leadership from by impact investors who have the opportunity to advance in driving climate protection technologies and financial models,” said Maggie Flanagan, Program Officer, The Lemelson Foundation.
Last year, Africa’s annual $277bn climate finance needs dwarfed the world’s official donors’ total aid spending of $204bn. Whereas, foreign direct investment into developing countries topped $1.4 trillion, demonstrating the capacity of private investment to deliver a future-changing boost to climate finance.
The report’s authors, who polled 2,000 Ugandans, reported that agriculture, health and infrastructure were the sectors most affected by climate change. The country’s temperatures are expected to have risen by more than 2℃ by 2030, with increased heat already drying out soils and accelerating the growth of pests. At the same time, more than 4.5m Ugandans are now affected by water scarcity. As a result, Uganda is expected to be losing $3.2-$5.9bn a year from climate change damage to agriculture, water, infrastructure and energy by 2025, according to the Climate and Development Knowledge Network (CDKN).
The report identified ideal high-impact technologies to alleviate this damage, which included low-cost nets capturing permanent free water supplies from the air, new soil additives that retain long-term soil moisture, road surfaces made from recycled plastic wastes that stop roads breaking up, and paints and surfaces that reduce heat in homes, urban heat islands, and air pollution.
Researchers also analysed the support available to Ugandan climate entrepreneurs, finding vanguard businesses, but limited private funding of climate adaptation initiatives. This limited investment flow has prompted the launch, alongside the report, of a new Africa Climate Investment Forum to create a climate adaptation investment ecosystem through investor co-creation, knowledge sharing, and immersion programmes.
“Our aim is to equip investors to draw on new impact assessment models and expanded financial tools to fund climate change businesses in Uganda,” said Frank Aswani, CEO of AVPA.
The launch of the forum follows findings that the majority of Ugandans are already being affected by climate change, through crop losses, floods, and droughts, but that knowledge about climate protection technologies and business opportunities was low.
“It was clear throughout our research for this report that investment opportunities and tools exist, but that communication and knowledge sharing are critical to accelerate their widespread uptake in climate engagement across Africa,“ said Allan Kamau, Managing Director of Weber Shandwick East Africa.
The full report and its executive summary is available here: Priming Private Sector Investment in Climate Adaptation Innovations in East Africa.
Distributed by African Media Agency on behalf of The African Venture Philanthropy Alliance .