The African Development Bank (AfDB) has launched a $3 billion Climate Adaptation Facility (CAF) — a landmark initiative designed to finance resilient infrastructure and support countries most affected by climate change. Announced during the 2025 Africa Climate Summit in Nairobi, the facility will focus on energy, water, agriculture, and transport systems vulnerable to climate shocks.
“Africa contributes less than 4 percent of global emissions but suffers disproportionately,” said Dr Akinwumi Adesina, AfDB President.
“This facility will turn climate adaptation into investment — not a cost.”
AfDB Climate Adaptation Facility Press Release
⚙️ Structure and Objectives of the Facility
The Climate Adaptation Facility is anchored on blended-finance principles, combining:
- $1 billion in concessional capital from AfDB’s balance sheet,
- $1 billion in private-sector co-investment, and
- $1 billion in guarantees and risk-mitigation instruments from international partners including the Green Climate Fund (GCF), Africa50, and Climate Fund Managers (CFM).
It will fund projects that integrate climate resilience into essential infrastructure across 45 African countries, ensuring that future investments withstand heatwaves, floods, droughts, and rising sea levels.
Green Climate Fund – Africa Partnerships
🌍 Priority Sectors for Climate Adaptation
| Sector | Focus Areas | Expected Outcome |
|---|---|---|
| Energy Systems | Grid modernisation, decentralised renewables | Improved reliability for 60 million people |
| Water Security | Dams, irrigation, desalination | Strengthened drought resilience |
| Transport Corridors | Climate-proof roads, ports, and bridges | Reduced disaster disruption |
| Agriculture & Food Systems | Climate-smart irrigation, storage | Boosted productivity and food security |
The AfDB aims to mainstream climate adaptation in all major infrastructure projects by 2030, transforming the way African economies plan, finance, and build.
🔋 Synergies With Africa’s Broader Infrastructure Push
The Climate Adaptation Facility complements existing initiatives such as:
- AFC Infrastructure Financing Facility — strengthening Africa’s logistics and mineral corridors.
- Africa50 Green Corridor Fund — financing clean transport and energy links.
- Climate Fund Managers Africa Facility — investing $1.065 billion in water, waste, and energy resilience.
Together, these mechanisms form an interconnected ecosystem of climate-finance instruments that reduce investment risk and build resilience across the continent.
💰 Innovative Financing and De-Risking Tools
The AfDB will use a mix of sovereign guarantees, green bonds, and insurance mechanisms to attract global capital into climate adaptation.
Key tools include:
- Partial-Risk Guarantees (PRGs): Sharing sovereign and regulatory risk.
- Resilience Bonds: Allowing investors to earn returns linked to climate-adaptation performance.
- Diaspora Co-Investment Platforms: Mobilising remittances into green infrastructure.
This de-risking approach mirrors strategies explored in Africa Infrastructure De-Risking: Reducing Risk, Building Confidence.
🧭 Country-Level Pipelines
Initial CAF investments will prioritise:
- Mozambique: Coastal protection and resilient housing after repeated cyclones.
- Kenya & Ethiopia: Drought-management and water-reuse infrastructure.
- Ghana & Côte d’Ivoire: Flood-resilient roads and bridges.
- South Africa: Retrofitting urban drainage and low-emission public transport.
🌱 Economic and Social Impact
The facility is projected to:
- Protect over 120 million Africans from climate-induced displacement,
- Support 2 million climate-resilient jobs,
- Reduce climate-related infrastructure losses by 30 percent, and
- Generate $10 billion in follow-on private investment.
These outcomes will position Africa as a model for climate-resilient development finance.
🤝 Partnerships Powering the Facility
The AfDB has partnered with:
- Africa50 for project development,
- Climate Fund Managers for blended-finance expertise,
- AFC for co-financing industrial corridors, and
- EU Global Gateway for concessional capital.
By aligning multiple financial actors, the facility bridges the gap between donor commitments and bankable projects, echoing the principles of EU South Africa Investment Deal.
🚀 The Path Forward: Turning Commitments Into Action
Dr Adesina noted that the AfDB plans to raise an additional $20 billion through green bonds and guarantees over the next five years to expand CAF’s capacity. He urged African governments to integrate adaptation planning into fiscal strategies and promote domestic private-sector participation.
“Climate resilience is the growth story of the 21st century for Africa,” Adesina said. “Every dollar spent on adaptation yields four in avoided losses.”
