High borrowing costs, currency fluctuations, and regulatory uncertainty have led to a decline in investments and a tightening of capital willing to enter African green infrastructure, despite continued growth in demand for electricity, transport, and water services. This tension is evident across all major African economies. The focus is on projects that have moved beyond the conceptual stage, defining capital requirements and risk mitigation strategies in an attempt to bridge the gap between developers and financiers. The role of the African Union as host indicates an attempt to address structural barriers that transcend national borders. Fragmented regulations and small local markets lead to higher transaction costs and hinder long-term investment. Through its Green Recovery Action Plan, which is concluding its first phase at the summit, policymakers are seeking to align national priorities with regional financing mechanisms capable of absorbing larger volumes of capital. According to USA Today, Africa's vulnerability to climate change is well-documented, but its economic opportunities are often underestimated. The continent holds some of the world's richest solar and wind energy resources and is experiencing rapid urban growth that will require massive investments in transport, housing, and public services. Building these investments in a low-carbon and resilient way will depend less on political pronouncements and more on the ability to structure projects that can attract and retain capital under real market conditions. High borrowing costs, currency volatility, and regulatory uncertainty are factors that have led to a decline in investment in Africa's green infrastructure. South Africa has accelerated its pace of renewable energy purchases to stabilize an energy grid that has suffered from underinvestment for years, but grid congestion and delays in transport upgrades are slowing the process of integrating new generation. Nigeria, which has the largest population of people without reliable electricity access in the world, has seen rapid growth in off-grid solar, but several companies remain exposed to currency exchange rate fluctuations due to a weak currency. In Kenya and Ethiopia, it is widely recognized that climate-resilient agriculture and water projects are economic priorities, but all of them require significant financial support. Organizers of the Green Economy Summit state that the climate challenge in Africa has entered a more technical phase, where the central question is no longer ambition, but implementation. The 2026 program is designed around how to structure, price, and finance projects, reflecting a broader shift in global capital markets. As interest rates continue to rise and competition intensifies, investors are demanding revenue guarantees from projects, stronger corporate governance, and more predictable political environments before committing funds. Africa's position in global climate finance remains marginal. Data from the Climate Policy Initiative shows that while global climate finance has increased in recent years, flows to Africa have not kept pace with needs, particularly for adaptation and nature-based projects that do not yield immediate commercial returns. This imbalance has direct economic consequences, as climate shocks have already led to declines in agricultural output, damaged infrastructure, and increased public spending across the continent, exacerbating existing financial pressures. The agenda of the African Green Economy Summit reflects this tension, where over 50 African projects in renewable energy, battery storage, electric mobility, water infrastructure, waste management, and climate-smart agriculture will be presented. On January 23, 2026, in Cape Town, South Africa, policymakers, investors, and African development financiers confirmed their plans for the African Green Economy Summit, scheduled for February 24-27, as governments across the continent face a widening gap between climate commitments and the capital needed to build power plants, water systems, and resilient infrastructure. The summit comes at a time when Africa is receiving only about 25% of the annual climate finance it needs, despite facing rising climate risks and mounting development pressures. For over 10 years, African countries have crafted climate strategies, energy transition plans, and adaptation frameworks, many of which align with international agreements and donor expectations, but it has proven far more difficult to translate these plans into projects that meet the risk and return thresholds for lenders and equity investors.
