Africa’s climate technology sector continues to attract significant global interest, yet experts warn that the flow of capital is highly concentrated and unevenly distributed. Speaking at the AfricArena Nairobi Climate Tech Summit 2025, Catalyst Fund Managing Partner, Maelis Carraro, emphasized that the climate crisis is intensifying across all sectors, creating both urgent risks and opportunities for innovation. She highlighted the stark reminder of the California wildfires in January 2025, which caused an estimated \$250 billion in damages, underscoring the global cost of inaction.
Carraro pointed out that while innovation is happening across mobility, crop insurance, and other critical areas, the bulk of climate tech investment in Africa is still concentrated in a handful of energy-focused companies. Between 2019 and 2025, 70% of disclosed climate tech funding in Africa went to just 20 companies, with d.light, Sun King, and Burn collectively receiving the majority share. In 2025 alone, energy dominated with 87% of climate tech funding, while agriculture and food—a cornerstone of African economies—captured only 3.4%.
She also expressed concern over the declining levels of pre-seed funding since 2023, warning that without adequate investment in early-stage startups, the pipeline of future climate solutions will weaken. While Series B and C funding is increasing, the sustainability of the sector depends on ensuring that young innovators receive the support necessary to grow into scalable businesses. Debt financing also made up 72% of Africa’s climate tech capital in 2025, largely skewed towards large-scale energy projects, limiting flexibility for emerging startups.
Despite these challenges, Carraro and other experts remain optimistic about Africa’s potential. The global market for climate adaptation and resilience is projected to grow to between \$500 billion and \$1.3 trillion annually from 2025 onward, creating enormous opportunities for African innovators. To capitalize on this, Carraro stressed the need for a uniquely African playbook for climate innovation—one that unlocks domestic capital, supports diverse solutions, and amplifies stories of real impact beyond funding headlines.
In parallel, global development players are also stepping up to bridge gaps in climate finance. The European Investment Bank’s development arm, EIB Global, signed technical assistance agreements with Ethiopia’s Zemen Bank SC, Dashen Bank SC, and Hibret Bank. These agreements aim to build the banks’ capacity to assess and manage climate-related risks, ensuring that financial institutions can drive investments that enhance resilience against floods, droughts, and other extreme weather events.
However, climate-related financial flows to Africa remain inadequate. Currently, the continent receives just 12% of the climate finance it requires to achieve its nationally determined contributions and meet 2030 climate targets. The call from climate tech experts is clear: equitable distribution of funds, greater investment in undercapitalized sectors like agriculture, and stronger support for early-stage startups are critical if Africa is to harness innovation and secure a resilient, sustainable future.
