Renewable Energy Investments Surpass Financial Services in Africa for the First Time
According to a report by the European Investment Bank (EIB) published last week, renewable energy investments accounted for 37% of non-listed investments in Africa in 2023, surpassing financial services for the first time.
A Decisive Turning Point
This shift marks a significant turning point, as capital is diverting from fossil fuels, which now represent only 4% of investments, in favor of sustainable solutions. This trend reflects an increased awareness and preference among investors for green assets, perceived as strategic on a continent seeking to strengthen its resilience to climate challenges.
A Global Quest for Sustainable Alternatives
The trend is part of a global search for sustainable and economic alternatives. African countries, particularly vulnerable to climate change, see the development of green infrastructure not only as an ecological necessity but also as an economic opportunity.
African Banks Embracing Climate Transition
In this regard, 67% of African banks consider climate transition an opportunity, and 79% have set climate goals. However, this commitment also reveals gaps.
Challenges Remain
Many financial institutions still do not fully integrate climate risk, particularly in sectors such as agriculture, which is underfinanced by banks. This is holding Africa back from achieving its ecological goals, with climate financing covering only 12% of annual needs. The transition relies almost entirely on public (90%) and international (99%) funds, while the private sector remains lagging.
Investment Trends in Africa
At the continental level, non-listed investments decreased by 24% between 2022 and 2023, from $6.5 billion to $5 billion. Financial services, which represented 37% of investments in 2022, followed this trend, dropping to 10% in 2023.
