The inaugural Adaptation Investment Summit for Africa (AISA 2026), held in Nairobi this month, came at a defining moment for the continent.
Africa needs between $70 billion and $140 billion annually to adapt to climate change, yet adaptation finance in Sub-Saharan Africa reached only $11 billion in 2024, according to the Climate Policy Initiative (CPI).
One of the summit’s key outcomes was the launch of the Kenya Uganda Adaptation Accelerator (KUAA), a four-year, $5 million programme backed by the Adaptation Fund.
The initiative will help climate adaptation enterprises become more bankable, reducing dependence on grants while improving access to commercial finance.
Africa’s challenge is not simply a shortage of capital but a shortage of bankable projects.
Investments in flood protection, drought-resilient agriculture and water storage generate significant economic and social benefits, but their returns are often indirect or realised over the long term, making private investors reluctant to participate.
This is where blended finance matters. By using public or philanthropic capital to absorb early risks, it can unlock private investment that would otherwise remain on the sidelines.
However, blended finance should be carefully designed. Public money should fill genuine financing gaps rather than become a permanent subsidy for private investors. Every concessional dollar should mobilise additional commercial capital while delivering measurable development outcomes.
Africa already has a working example. The $750 million Infrastructure Climate Resilient Fund (ICRF), managed by AFC Capital Partners, uses a 32 per cent first-loss tranche provided by the Green Climate Fund to reduce investor risk.
The model has already attracted more than $500 million in commitments, demonstrating how targeted concessional finance can crowd in private capital.
Kenya is well positioned to build on this momentum. The Green Climate Fund’s decision to establish its East and Southern Africa regional office in Nairobi, alongside KUAA, strengthens the city’s role as a regional climate finance hub.
As donor resources tighten, Africa cannot rely on grants alone. Governments should create clear blended finance frameworks and enable pension funds, insurers and other long-term investors to participate confidently in climate investments.