Africa’s Just Transition: Sustainable Finance and Inclusive Growth at FiCS 2025

During a key session on February 26, Leila Mokaddem, Director General for Southern Africa at the African Development Bank, emphasized that Africa’s path to sustainability must be pragmatic and equitable.

The 2025 Finance in Common Summit, held in Cape Town with the breathtaking Table Mountain as its backdrop, placed the Just Transition at the heart of discussions on Africa's shift toward a greener, more inclusive economy. Hosted by the Development Bank of Southern Africa (DBSA) and the Asian Infrastructure Investment Bank (AIIB), with support from Agence Française de Développement (AFD) and the African Development Bank (AfDB), the event convened global leaders, policymakers, and financial institutions to accelerate sustainable finance solutions for Africa.

Ensuring a Fair and Inclusive Transition

During a key session on February 26, Leila Mokaddem, Director General for Southern Africa at the African Development Bank, emphasized that Africa's path to sustainability must be pragmatic and equitable.

"With 600 million Africans still without electricity, our transition cannot be about climate targets alone. It must be about jobs, industrialisation, and economic opportunity. If we fail to get this right, the transition could deepen inequality rather than reduce it."

The African Development Bank is implementing policy frameworks and financing strategies to ensure that no one is left behind. Prioritizing youth employment and skills development, the Bank's Jobs for Youth in Africa (JfYA) Strategy aims to create 25 million jobs and equip 50 million young Africans with the skills necessary for a green economy by 2025. In collaboration with the International Labour Organization (ILO), a Just Transition job market system is being developed to ensure climate investments translate directly into employment opportunities.

South Africa: A Case Study in Careful Transition Management

South Africa's coal-dependent economy was highlighted as a prime example of why meticulous planning is essential. The AfDB has pledged UA 2.5 billion to support South Africa's Just Transition, investing in renewable energy projects, worker retraining programs, and energy governance reforms to mitigate economic disruption.

"If we do not manage this transition properly, we risk economic instability, job losses, and deepening poverty. We must ensure that workers and communities dependent on fossil fuels are not left behind," Mokaddem warned.

Urgent Need for Climate Finance

Nnenna Nwabufo, Vice President for Regional Development, Integration, and Business Delivery at the AfDB, moderated a plenary session on the role of local financial institutions in expanding energy access. She underscored the urgency of bridging Africa's significant climate finance gap—an estimated $2.7 trillion needed by 2030, with only 23% currently secured.

To address this, the AfDB is spearheading initiatives such as the Climate Action Window, aimed at raising $14 billion to provide low-income African nations with easier access to climate finance. Additionally, the Desert to Power Initiative, a $20 billion project, seeks to generate 10 GW of solar power across 11 Sahelian nations, delivering clean energy to 250 million people and reducing fossil fuel reliance.

From Aid to Investment: A Call for Global Partnerships

"Africa does not want aid—we want partnerships," Nwabufo asserted. "We need investment that empowers our nations to take ownership of their development, fostering resilience, self-sufficiency, and sustainable growth that benefits Africa and the global economy."

Both Mokaddem and Nwabufo emphasized that achieving a Just Transition requires bold action, strategic investments, and global cooperation.

"Africa has a unique opportunity to build a resilient, sustainable future, but we cannot do it alone," Nwabufo urged. "We need financial institutions, governments, and the private sector to step up and invest in Africa's green economy."

Mokaddem reinforced this sentiment, stating, "This is not just about reducing emissions. It is about securing Africa's future—creating jobs, driving industrialisation, and ensuring no one is left behind. The time to act is now."