Mobilizing private capital and climate finance in Central Africa

The situation

A Central African country with one of the world's largest intact forest estates absorbs several times more carbon than it emits, yet its economy depends on oil, its financial sector is shallow and concentrated, and public finances cannot carry the cost of adaptation alone. A national climate and development assessment led by a multilateral development institution needed a credible answer to a hard question: how would the private sector and the financial system pay for resilience and green growth when domestic credit to firms stood at about 14 percent of GDP and results-based climate payments remained modest.

Our role

Our senior team led the private sector and climate finance workstream, working alongside the institution's macroeconomic, financial sector, and natural resource teams.

The work

We interviewed and surveyed business leaders, banks, the sovereign wealth fund, the national guarantee company, development finance institutions, and inbound investors to establish how firms perceived climate risks and opportunities and where financing was failing to reach them. The findings were candid: climate was seen as a government priority with little commercial meaning for firms, long-term finance for adaptation infrastructure was scarce, and the pipeline of bankable green projects was thin.

We then assessed the domestic financial system and the international climate finance landscape against that pipeline, and defined eight mutually reinforcing levers: a climate window within the sovereign wealth fund, greening the national guarantee company, portfolio risk-sharing facilities for commercial banks, sustainability-linked lending and a sovereign sustainability-linked bond, concessional green finance facilities, new forest and wood-processing investments, a national climate fund, and a capacity-building program for banks and firms.

For each lever we set out the rationale, the institutional enablers, the sequencing, and the links between them, so that a guarantee, a fund, and a bond issuance would build on one another instead of competing. We also examined the realistic value of carbon markets for a low-deforestation country and advised against treating them as a near-term revenue source.

What changed

The analysis was integrated into the final national assessment and its financing roadmap, giving the government and its development partners a sequenced set of instruments for mobilizing private and international climate finance. It shaped the discussion of bank risk-sharing, guarantee reform, and sovereign sustainability-linked issuance, and brought business and investor perspectives into the assessment.

Related service

This assignment sits within sustainable finance: connecting an institution's climate priorities with the financing products, investment approaches, and institutional arrangements that can deliver them.