For a continent that has historically maintained the lowest carbon footprint globally, Africa’s recent strides in low-carbon development signal two critical shifts. First, the urgency to address climate change is undeniable, as its impacts threaten to reverse decades of hard-won development progress. Second, Africa is positioning itself at the heart of the global transition to a low-carbon economy, leveraging its vast natural resources, human capital, and innovative potential to drive sustainable growth on its own terms.

Guided by the African Union’s Agenda 2063, which envisions economic transformation in harmony with climate priorities, Africa’s green transition is unfolding at multiple levels—regional, national, and local. Governments, businesses, and communities are actively implementing to cut carbon emissions and advance green growth.

Policy and Strategic Milestones

A major milestone in Africa’s green transition occurred at the 38th African Union Summit in February 2025, where Heads of State adopted strategies on sustainable aviation fuels, green hydrogen, energy efficiency, and climate-smart infrastructure. These commitments build on the Nairobi Declaration on Climate Change and Call to Action (September 2023) and are already shaping national strategies or the other way around. Ghana, for instance, has outlined a pathway to net-zero emissions by 2060, emphasizing a shift to biofuels in aviation and shipping. South Africa’s Just Energy Transition Implementation Plan (2023-2027) prioritizes renewable energy investments, energy efficiency, and climate-smart rail infrastructure, aligning with its 2050 energy transition goals.

Private Sector-Led Low-Carbon Projects

The private sector is playing an increasing role in Africa’s low-carbon transition, particularly through public-private partnerships (PPPs). One example is the 200 MW Sanankoroba Solar Power Station in Mali, which broke ground in May 2024 under a PPP between the Malian government and NovaWind (a subsidiary of Rosatom). The project, which is West Africa’s largest solar plant, is expected to significantly expand Mali’s renewable energy capacity. Similarly, South Africa’s 140 MW Umsinde Emoyeni Wind Power Station, currently under construction, will supply power to Sibanye-Stillwater, a major mining conglomerate, through a 20-year power purchase agreement. The project is led by a consortium that includes African Clean Energy Developments and Energy Infrastructure Management Services.

Green Financing Accelerates Climate Action

Private sector investment in climate financing in Africa is gaining momentum. This is an upside development for the continent, having historically depended heavily on public funds from external sources to finance climate action. At the global level, the Climate Investment Funds (CIF) issued its inaugural $500 million bond in January 2025 to mobilize private sector capital for low-carbon technologies in emerging markets. The bond was highly oversubscribed, attracting orders exceeding $3 billion, highlighting strong investor interest in climate-aligned initiatives, particularly in developing economies.

It is also encouraging to see funding availability for private sector-led climate action. In July 2024, Helios Investment Partners launched the Helios Climate, Energy Access, and Resilience (CLEAR) Fund, securing an initial $200 million to support mid-sized African companies in sectors such as low-carbon energy, climate-smart agriculture, sustainable mobility, recycling, and digital climate solutions. The fund is backed by major development finance institutions, including the UK’s development finance institution, the European Investment Bank, and the Dutch Development Bank.

Looking Ahead: Strategic Steps to Accelerate Momentum in 2025 and Beyond

As 2025 marks a crucial year for revising Nationally Determined Contributions (NDCs) under the Paris Agreement, Africa’s top greenhouse gas emitters are expected to raise their emissions reduction targets. Key areas of focus will include scaling up renewable energy investments, enhancing energy efficiency, deploying electric vehicles, and decarbonizing high-to-abate sectors. Africa must carefully navigate key challenges, opportunities, and critical factors that will shape the success of its green transition.

Africa’s green transition is constrained by a massive financing gap, with only 17.8% of mitigation and 20% of adaptation finance needs met between 2021 and 2022. Overreliance on external public funding—82% of which 76% comes from multilateral institutions and bilateral donors—is unsustainable, especially amid potential cuts following a U.S. Paris Agreement exit. To diversify funding sources by attracting private capital, Africa must scale carbon markets, explore carbon taxes, and introduce take-back obligations in hard-to-abate sectors, which require legal reforms in industries like oil and gas. Senegal, Nigeria, Mozambique, Zambia, Uganda, and Zimbabwe are advancing carbon pricing instruments, signaling a regional shift toward innovative climate finance solutions. Countries without carbon market/carbon tax regimes must urgently develop regulatory frameworks to secure investor confidence in navigating risks.

Energy transition as a key component of Africa’s green transition is often framed as expanding renewables to electrify millions of Africans without power. However, less focus is placed on the business case for private sector-led clean energy investments in productive sectors. Stimulating demand requires strategic policies—tax incentives, tariff adjustments, and industrial policies—to align energy supply with industry needs and drive growth.

Carbon Capture and Storage (CCS) is emerging as a key decarbonization tool for Africa’s high-emitting industries, with countries like Ghana, Uganda, Egypt, Nigeria, and South Africa integrating it into their energy transition strategies. Many African countries may overlook the fact that CCS could usher in a new era of resource extraction, given the continent’s favorable geology, particularly the East African Rift basalts. Africa cannot afford to remain on the sidelines while the rest of the world advances in CCS innovation. To fully capitalize on this potential, a deep understanding of CCS technology is essential. South Africa leads in CCS research and pilot project, backed by the World Bank, while Nigeria hosts the Africa Center of Excellence for Carbon Management Technology and Innovation to advance and accelerate the deployment of carbon management technologies in Africa including CCS. To harness CCS effectively, African governments must establish robust policy, legal, and regulatory frameworks for CCS, invest in R&D, and develop infrastructure through public-private partnerships to accelerate industry growth and attract investment. Additionally, governments need to commit funding to accelerate the development of a viable CCS industry.

Africa’s green transition plans must align with global decarbonization trends. Africa does not operate in isolation—its industries are shaped by global decarbonization policies such as the EU’s Carbon Border Adjustment Mechanism (CBAM), just as its actions influence international markets. However, it appears that some national transition plans fail to reflect this reality. Ghana’s energy transition and investment plan, for instance, aims for net-zero emissions in the steel and cement industries beginning in 2040, yet the CBAM, which prohibits  such high-emission products’ entry into the EU, will take full effect by 2026. This 14-year misalignment could leave Ghanaian businesses noncompetitive in the EU market. To avoid such risks, African countries must align their transition strategies with global policies, ensuring competitiveness and meaningful climate action.

In conclusion, Africa’s green transition presents vast opportunities, but success hinges on strategic financing, regulatory clarity, and alignment with global decarbonization policies. By scaling carbon markets, supporting clean energy in industries, and leveraging technologies like CCS, Africa can drive sustainable development while remaining competitive in the evolving global economy.