SIf you were covered by “green finance”, Africa would be in debt to help save the planet. Conferences follow each other, promises flow, funds are renamed “climate” but the mechanism remains unchanged: the continent borrows to mitigate the impact of costly disruptions without being primarily responsible. The ecological transition, which was supposed to correct the imbalances inherited from History, risks creating new imbalances. Explanation.
Credit-financed transition
In recent years, climate finance has become the new language of development. The numbers number in the billions, the acronyms, PPP, SLM, blended finance, invade reports and forums. However, behind the greening rhetoric, Africa continues to finance its adaptation through debt. According to the World Bank, nearly 70% of climate funding currently comes from loans, compared with less than a quarter of donated funding. Clearly, to adapt to the warming it is experiencing, Africa will have to take on more debt.
Countries are increasing the number of green bonds and public-private partnerships labeled “climate”, while social budgets are contracting. Spending on education, health or energy subsidies declines and is replaced by investments that satisfy donors but alienate society. The transition to an accounting path, regardless of social reality. The climate, which is an object of universal emergency, is transformed into a technocratic pretext.
Finance that passes through the field
Behind the current, the circuit remains vertical. The money leaves North Korea, passes through multilateral institutions, and then is concentrated in a few large, “bankable” projects: solar power plants, wind power plants, high-voltage power lines, and urban infrastructure. These achievements, often spectacular on paper, leave the real economy in the shadows: Africa’s SMEs, local governments and agricultural cooperatives. They almost never access these resources, due to complex procedures, little funding or no hedging against exchange rate risks. Transitions that should be inclusive actually reproduce the logic of exclusion.
And when the money finally arrives, it’s not always neutral. Power purchase contracts, which are often indexed to the dollar, subject African consumers to automatic price increases as soon as the local currency depreciates. Each green loan adds to an already large debt, thereby reducing the budget margin for the social safety net. Financial risk becomes social. Citizens pay twice: through taxes and through utility bills.
Rewrite the rules of the game
Faced with this paradox, condemnation alone is not enough; we must reinvent green finance. The instruments already exist, but need to be rethought. Mixed financing, which combines donations and loans, should be used to subsidize social risks, namely affordable prices, universal connectivity, local infrastructure, and not to guarantee investor profits.
Green bonds will gain credibility if their indicators measure real progress: the number of connected households, job creation and technical loss reduction. Climate debt operations, provided they are conducted within locally managed national transition funds and subject to public control, can align financial sustainability and environmental justice.
Signal of a possible reversal
Several countries are already showing a turning point. Nigeria is experimenting with rural electrification based on hybrid solar power minigrids that finance access to energy and local employment. Morocco, a pioneer of sovereign green bonds, associates them with measurable social indicators. Namibia is negotiating a “just transition” agreement that provides for the retraining of workers in the fossil fuel sector. These initiatives are still modest, but they remind us that climate justice cannot be just a slogan.
To find
Kangaroo today
Answer
Africa’s transition will not be limited to megawatts or carbon credits. This will only be sustainable if it also funds rights, jobs, transparency and dignity. Justice is the main condition for sustainability. Without this, environmentally friendly funding will just be an empty promise.
* Stéphanie Manguele is a lawyer at the Paris bar and practices at the law firm Thiam & Associé.
