Financing green growth in African emerging economies: opportunities and challenges

Within the context of the SDGs, this paper explores the green growth financing market in Africa and provides a basis for empirical analysis. The desire to achieve 2050 net-zero emission targets demands extensive investment in climate mitigation means that Africa requires about US$2 trillion by 2030 to mitigate climate change. African Development Bank offers a huge market for green and social financing through its Green Bond Program. The questions are: what opportunities exist in African emerging economies for the use of green bonds? How will green growth financing enhance economic, social, and governance in African emerging economies? What challenges may confront the use of green financing in emerging economies in Africa? We employ the desk review approach to explore the existing potentials and possible challenges that could affect green growth financing in emerging African economies. Results show enormous potential for green growth financing in emerging economies, given that there exist huge natural capital and potential for the capital market and banks to develop new instruments from green bonds, among others. Low level of development of the African capital market, the readiness of governments to make good use of funds from bonds, and weak governance structures may impede affect green growth financing strategies.