Written By: Faith Jemosop
Climate finance is growing, but it’s not fixing Africa’s most urgent problems.
Africa is on the frontlines of the climate crisis. Despite contributing less than 4% of global carbon emissions, the continent bears the brunt of worsening climate extremes, from catastrophic floods and prolonged droughts to deepening food insecurity and energy stress.
Yes, global climate finance is expanding:
- In 2022, Africa received $44 billion in climate funding, a 48% increase from 2020.
- The World Bank disbursed $42.6 billion globally in climate finance for FY2024.
- The African Development Bank (AfDB) raised $750 million through an oversubscribed hybrid bond to fund climate programs.
These are significant numbers.
But here’s the problem: Africa needs over $277 billion every year to effectively adapt and transition to a low-carbon, climate-resilient future. We’re staring down a climate finance gap of more than $230 billion annually. And most of the funds that do come in go toward flashy, supply-side projects, like mega solar plants and high-tech wind farms.
While these initiatives are essential in the long term, they ignore something crucial that could bring faster, cheaper, and more equitable returns: energy efficiency.
The Blind Spot in Climate Finance
Energy efficiency doesn’t make headlines. It doesn’t involve dramatic groundbreakings, VIP ribbon cuttings, or billion-dollar equipment deliveries. But what it does do is quietly, consistently, and effectively drive climate impact.
Globally, energy efficiency measures account for:
- 40% of the emissions reductions needed to reach net-zero goals
- Faster deployment compared to large-scale generation infrastructure
- Major cost savings for governments, businesses, and households
It’s also a jobs powerhouse, creating green jobs in every sector and every region, not just high-tech urban hubs.
Yet, less than 15% of climate finance is allocated to energy efficiency.
That’s not just a gap. It’s a policy failure.
What Efficiency Achieves Real Numbers, Real Impact
Let’s move from theory to evidence.
In Ghana, a government-led lighting retrofit program achieved the following:
- Saved 124 MW of electricity demand
- Cut 112 tonnes of CO₂ emissions
- Deferred $105 million in costs for new power generation
That’s not a futuristic promise. That’s real money and real impact.
Across Africa, it’s estimated that 15% of generated electricity is lost through technical and commercial inefficiencies, either wasted in transmission or drained by outdated systems and appliances.
In Kenya, the numbers are painfully personal:
- The national grid loses over KES 14 billion (approx. $110 million) annually due to technical and commercial losses.
- Public buildings, schools, clinics, universities, government offices, still operate using inefficient lighting, air conditioning, and motors.
- In the private sector, hotels, factories, and office buildings spend millions annually on wasted power.
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At Best. Energy, a clean-tech company working in Kenya, we’ve seen first hand what energy efficiency delivers:
- Industrial lighting replacements routinely cut power usage by over 50%, improving sustainability and saving money.
- Hospitality sector retrofits have freed up cash that’s been reinvested in expanding facilities and improving guest services.
- Factories using smart energy management systems have slashed costs and buffered against frequent grid instability.
And these gains aren’t limited to elite companies. Schools, rural health clinics, small businesses, and homes all benefit from lower bills, better comfort, and more reliable energy access.
So why is this being overlooked?
Because energy efficiency isn’t glamorous. It doesn’t photograph well. But it works, and it works now.
What If We Funded Efficiency?
Let’s play out a simple scenario: What if just 10% of Africa’s climate finance was redirected to energy efficiency?
That’s roughly $4.4 billion, a fraction of the funding already flowing into the continent.
Here’s what that could unlock in Kenya alone:
- Stabilize the grid by reducing load and minimizing blackouts
- Slash utility debt by lowering demand and reducing the need for emergency generation
- Train and employ thousands of youth in retrofitting, diagnostics, and energy auditing
- Accelerate carbon reduction targets at lower cost and with fewer loans
This isn’t just a policy wish. It’s grounded in engineering, finance, and common sense.
And crucially, it delivers climate justice. Because it helps the people most vulnerable to climate shocks: low-income households, under-resourced public institutions, and small businesses in rural and peri-urban areas.
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A Smarter Path for Climate Finance
Africa’s climate strategy cannot afford to be shaped like a public relations campaign.
Right now, climate finance is chasing glamour. We’re seeing announcements of multi-billion-dollar hydrogen corridors, floating solar megastructures, and cross-border supergrids. These projects have a place, but they shouldn’t drown out practical, low-cost solutions that deliver now.
Energy efficiency:
- Doesn’t need to wait for regulatory reform
- Doesn’t depend on imported technologies
- Doesn’t require new land acquisition or environmental impact approvals
- Doesn’t carry heavy debt risks
Instead, it pays for itself, lowers costs across the board, and strengthens existing systems.
At its core, this is about equity.
- Climate justice: The people least responsible for emissions deserve solutions that work for them now, not in 2035.
- Economic justice: Energy efficiency empowers communities with savings, reliability, and jobs.
- Policy justice: Public budgets should prioritize proven impact, not high-profile announcements.
Africa’s energy future can’t be imported, it must be built from the inside out, with local solutions, local jobs, and local results.
The world is watching how climate dollars are spent. We must ask: Are they reducing emissions, or just generating headlines?
