Description
Multilateral Climate Funds (MCFs) established through international agreements or for a specific mandate provide financing for adaptation in Africa either through grants or market-linked instruments. Climate and environment funds represented 5% of adaptation finance tracked in the Landscape in 2017-18 and per Climate Funds Update, seven MCFs have funded adaptation activities in Africa for USD 2.5 billion in total funding to adaptation to date. MCFs are catalytic in facilitating and accelerating financing in perceived high-risk adaptation projects by providing instruments like first-loss or junior equity, repayment guarantees, and grants to mobilize private investments. Funding by MCF to date as reported by Climate Funds Update is presented in Table 2.
Though these funds have been commendable in providing support for African countries to meet NDCs, countries face financial and capacity constraints in accessing funding. The funds have high standards for proof of the climate adaptation relevant of projects which can prove challenging for prospective implementers with limited capacity to conduct sufficiently robust climate risk analysis to validate the climate adaptation relevance of their project. The multilateral climate funds also face challenges in raising their own funds as they are entirely dependent on voluntary sovereign contributions.
Risk Appetite
Climate Mandate
Ability to Raise Funds
