Priming Private Sector Investment in Adaptation Innovations to Correct Course on Climate Finance in East Africa

As global leaders participate in the 28th Conference of the Parties (COP) at the UN Climate Change Conference in Dubai, an inaugural climate adaptation report focused on East Africa has revealed that impact investors have predominantly focused on initiatives to reduce Africa’s carbon footprint, whereas the funds for climate adaptation solutions are lacking.

Africa requires a daunting $250 billion to meet the continent’s climate adaptation and mitigation needs annually, with East Africa alone requiring about $82 billion annually for climate financing. The report, commissioned by The Lemelson Foundation, in partnership with the African Venture Philanthropy Alliance (AVPA), Geopoll and Weber Shandwick, found that impact investors are favoring digital applications and solar power solutions to reduce carbon emissions over crucial climate adaptation technologies that could protect East Africans from the effects of climate change.

This emphasis on reducing carbon emissions and mitigation efforts has taken center stage against the relative neglect of life-protecting climate adaptation solutions, which has seen the world’s most vulnerable countries rapidly move into climate crises without solutions in sight. As global leaders gather at COP28 to come to a consensus on finance for loss and damage, adaptation and mitigation, the need to “correct course” on climate adaptation finance for Africa is paramount.

 Escalating climate crisis in East Africa :

Africa accounts for only 3% of the world’s greenhouse emissions yet is home to 16 of the 20 countries rated as most vulnerable to climate change. East Africa has been disproportionately affected by the global buildup of greenhouse gases in the atmosphere, placing the region squarely on the frontlines of the escalating climate crisis. The report surveyed participants in Kenya, Ethiopia and Uganda, to understand the impacts of climate change and the climate adaptation solutions being adopted in the region.

In Ethiopia, 74% of those polled said rising temperatures affected them and their communities, while 69% reported changing weather patterns and 68% had experienced drought. The country’s mean annual temperature rose by 1.3° C from 1960 to 2006 and is projected to increase by 3.7° by the end of the century.

In Kenya, 80% said drought had affected them and their communities, 77% had experienced changing rain patterns and 63% were affected by rising temperatures. Kenya’s temperatures are forecast to rise by a further 1.5C° to 2.5C° by 2050, which will threaten the existence of human life across much of the country.

In Uganda, 76% of people polled said changing rain patterns affected them and their communities, 63% reporting rising temperatures and 58% felt the impact of drought. Over the 30 years to 2018, Uganda’s average temperature rose by 0.52 C per decade and is expected to have risen by up to 4.2 degrees by 2100.

East Africa’s risk of heat-related morbidity and mortality is high, due not only to drought and heat stress, but also to increased numbers of mosquitoes, ticks and locusts, the spread of more bacteria and disease, increased risk of water-borne diseases and damage to infrastructure due to harsher weather.

As the report highlights, “It is estimated that 39 million people are suffering in the region due to drought. But 73 million are being adversely impacted by the rise in heat, which barely enters the discourse. On the frontline of climate change, East Africans in 2023 are losing their food, water, shelter, utilities, livelihoods and health, to global warming.”

 Priming investment for adaptation innovations :

Against this backdrop, the Intergovernmental Panel on Climate Change has declared that it is now urgent to empower and enable East Africa to develop its own climate solutions. Public finance only meets 9% of Africa’s climate needs, whereas private investment flows only meet 1.5% of Africa’s climate needs.

To this end, the report reviewed the climate adaptation business opportunities in the most affected sectors, agriculture, health and infrastructure, to assess their potential for entrepreneurial businesses and to assess the investment flows that exist for adaptation in the region. It concludes that private sector finance is critical to scaling climate adaptation innovations in the region, however, the number of businesses emerging in these new sectors remains minimal, as investors grapple with an array of structural issues.

For innovator entrepreneurs to play a role in achieving adaptation, they must develop and monetize a technology that reduces a key climate impact. They must also overcome obstacles to commercialization, such as regulatory constraints and a tendency for funders to focus on lower risk renewable energy and agriculture projects or digital applications.

As the research highlighted, investment in climate adaptation has also been constrained by the absence of standardized frameworks and climate adaptation definitions. So long as climate information remains the preserve of a tight circle of specialists, in health, agriculture or infrastructure, effectively operating in silos, cross-discipline solutions also remain out of reach.

The report urges a ‘Stepchange’ in the climate response in East Africa through comprehensive efforts to raise awareness on the effects of the climate crisis in the region and the available solutions and investment channels that exist for climate adaptation.

To achieve this, the report recommends comprehensive information and awareness campaigns on the effects of climate change, the development of platforms for investors and climate adaptation entrepreneurs and the development of a public-private partnership to produce an annual risk report on climate adaptation businesses.

By Allan Kamau Managing Director, Weber Shandwick East Africa and Stephainie Mithika, Senior Associate, Healthcare and Social Impact, Weber Shandwick East Africa.

Weber Shandwick East Africa is the hub for our Social Impact and Sustainability Offering in the Africa region. We empower our clients with the right tools to generate meaningful impact in the sustainability space, through offering sustainability communications consultancy and positioning and delivering strategic, creative, integrated concepts, messaging, campaigns, products and platforms.

Sources : The Telegraph