Mapping finance sources for nature-based solutions in Africa

This report lays out existing and potential sources of funding for nature-based solutions, covering current sources of public finance and exploring domestic and international public finance, blended finance stakeholders, and private funding sources. Nature-based solutions for green infrastructure – such as managing fresh water flows, improving agricultural productivity or planting native vegetation – provide multiple benefits to people, communities and their environment. As it stands, countries seeking to identify finance for nature-based solutions must navigate complex fragmented terms and language, as well as a wide array of public and private finance actors.

Such fragmentation has practical implications. African countries face multiple, simultaneous procedures to access funding for nature-based solutions, each with different demands on their capacity. Adding to the complexity, finance for nature-based solutions often combines public and private financing. So far, blended financing has been limited to international climate funds and multilateral development banks (MDBs), while private financing remains largely limited to philanthropic investment. Key messages of this report include:

• Nature-based solutions (NBS) have become a finance priority in the last few years thanks to increased visibility in international climate and biodiversity negotiations. However, funding remains inadequate.
• Most sources of finance for NBS have come from domestic, bilateral and international public sources. These involve an array of actors and processes that requires time and resources to engage for African countries that may have limited capacities to do so.
• Blended finance solutions are emerging for NBS but are mainly from international climate funds and delivered by multilateral development banks. Private finance actors are increasingly interested in NBS but the limited financial revenue streams and longer timeframes of NBS can constrain largescale investments.
• To date, most financial instruments used for NBS have been grants, but as the private sector and export credit agencies move towards this agenda, equity and guarantees may be increasingly used.