The global climate finance landscape is entering a period of recalibration. As international climate financing commitments soften and major economies adopt more inward-looking energy policies, a critical question is emerging: who will finance the transition in emerging markets? For Africa, this is not simply a challenge to replace lost capital flows. It is an opportunity to take greater ownership of the continent’s climate and development agenda and to position itself as a leader in the next phase of global climate investment.
For too long, climate finance to emerging markets has been externally driven, fragmented and often misaligned with domestic priorities. That model is giving way to a more pragmatic approach rooted in nationally determined priorities, investable sectors and institutions capable of converting policy ambition into bankable opportunities.
Nigeria offers a strong example of this shift. Its nationally determined contributions identify energy, agriculture, waste and industrial processes as priority sectors for emissions reduction and resilience. These same sectors now form the core of the country’s investment pipeline, demonstrating a clear alignment between climate policy and capital deployment.
Across Africa, the path forward is increasingly clear: deepen domestic and regional markets, mobilise a broader pool of capital, and channel financing into scalable sectors where development and decarbonisation can advance together.
Energy: delivering access, security and transition
Energy remains Africa’s most pressing development constraint and one of its most compelling investment opportunities. More than 600m people on the continent still lack access to electricity, constraining industrialisation, job creation and improvements in quality of life. The challenge is not decarbonisation alone; it is expanding access to electricity that is reliable, affordable and progressively cleaner. This creates opportunities across the full energy value chain: utility-scale renewables, storage, transmission and distribution upgrades, mini-grids, solar home systems and embedded generation.
In Nigeria, the Electricity Act 2023 is transforming the investment landscape by decentralising regulation, lowering barriers to entry and enabling greater private sector participation. Gas also remains an essential part of Africa’s transition, supporting grid stability and industrial development while reducing reliance on higher-emission fuels such as diesel. At the same time, flare reduction and gas-capture projects offer significant opportunities to cut emissions and improve efficiency.
Taken together, Africa’s energy deficit, supportive regulatory reforms and expanding project pipeline position the sector as a cornerstone of the continent’s climate and development agenda and a major destination for long-term investment capital. The Nigeria Sovereign Investment Authority, Nigeria’s sovereign wealth fund, has built a robust energy investment portfolio to capture these opportunities.
These include the Renewable Investment Platform for Limitless Energy, an investment vehicle focused on renewable energy, battery storage, diesel displacement and local solar manufacturing. The Nigeria Distributed Renewable Energy Fund, developed with Africa50, the International Solar Alliance and Sustainable Energy for All, aims to improve energy access in underserved areas by supporting off-grid and mini-grid developers. Another opportunity is a 30MW gas-fired power plant designed to improve energy reliability while displacing more carbon-intensive diesel generation.
For investors, Africa’s energy transition is not a future possibility. It is an investable market today.
Adaptation and resilient infrastructure
While mitigation has historically attracted the bulk of climate finance, adaptation is rapidly becoming a core investment theme. In climate-vulnerable regions such as Africa, resilience is essential to protecting infrastructure, sustaining economic activity and safeguarding long-term returns. In Nigeria, recurrent flooding, extreme heat and rapid urbanisation are creating opportunities in climate-resilient roads, ports and power infrastructure, flood control and stormwater systems, coastal protection, and water and sanitation systems. NSIA is an anchor investor in the Infrastructure Climate Resilient Fund, which develops resilient infrastructure across Africa.
The building sector also presents a significant opportunity. As cities expand, demand for energy-efficient buildings is rising, with opportunities in retrofits, solarisation of hospitals and schools, and sustainable construction materials. The Programme for Energy Efficiency in Buildings’ Cool project, supported by the Green Climate Fund, is helping finance this transition across emerging markets.
Carbon markets as value creation engine
Carbon markets represent one of the fastest and most scalable pathways for mobilising climate finance in Africa. In Nigeria, the national carbon market framework, which has received presidential approval, integrates both Article 6 mechanisms under the Paris Agreement and the voluntary carbon market, with a pathway towards a future emissions trading system. These early milestones signal growing momentum and the opportunities are substantial, particularly in clean cooking innovations, waste and methane abatement, and agriculture and nature-based solutions.
The NSIA is playing a catalytic role through Carbon Vista, its joint venture with Vitol. The platform finances and develops carbon projects while supporting project origination, aggregation and engagement with international buyers. This approach embeds carbon markets as a value driver across multiple sectors rather than treating them as a standalone opportunity.
Mobilising finance: from fragmentation to scale
Beyond these core sectors, a new generation of high-potential themes is emerging. Industrial decarbonisation is becoming increasingly important in cement, manufacturing and other hard-to-abate sectors. The blue economy is creating investment opportunities around coastal resilience, marine resources and sustainable livelihoods, while digital climate infrastructure, including carbon registries, measurement, reporting and verification systems, and climate data platforms, is becoming critical to market integrity, transparency and scale. Together, these demonstrate that climate investment in Africa is moving from a niche market to a system-wide driver of economic transformation.
Realising these opportunities requires institutions and structures that can efficiently connect capital to bankable projects. This means moving beyond isolated interventions towards system-level solutions that include blended finance to de-risk early-stage projects, aggregation platforms to build scale and credit enhancement to crowd in private and institutional capital.
To address these needs, NSIA and the World Bank are establishing the Nigeria Infrastructure Finance and Guarantee Group. Using a ‘conveyor-belt’ model, the country-led platform will provide project preparation financing, viability gap funding, flexible risk capital and credit guarantees through four interconnected vehicles. It is designed to create a steady pipeline of strategic and investable opportunities across sectors such as energy, water and sanitation, transportation and urban development.
The investment case for Africa
Nigeria’s experience demonstrates a critical principle: climate ambition delivers results when it is anchored in sectors with clear commercial potential and supported by strong institutions. By aligning NDC priorities with investment opportunities and backing them with policy reforms and targeted platforms, Nigeria is creating a practical pathway from policy to capital. This marks a broader shift for emerging markets, from dependency on externally driven climate finance to domestically anchored, investment-led execution.
The opportunity for investors is both clear and compelling. Africa offers a rare combination of structural growth, underpenetrated markets and the ability to build critical systems and infrastructure from the ground up. More importantly, it offers the chance to deploy capital with purpose, supporting the development of a low-carbon, climate-resilient economy while generating attractive long-term returns and measurable development impact.
In a world of shifting climate leadership, the most strategic investors will be those who align their capital with credible, country-led strategies and institutions capable of delivering at scale.
Nigeria is laying that foundation. The momentum is building, the platforms are emerging and the investment opportunities are real. The question is no longer whether the opportunity exists. The question is: who will seize it?
Nana Maidugu is head of sustainability and ESG at Nigeria Sovereign Investment Authority.
This article featured in the June 2026 edition of OMFIF’s Sustainable Policy Institute Journal.
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