Over the past year, Catalyst Fund has received over 3,000 proposals from innovators working in the field of climate technology in Africa. In partnership with Africa: The Big Deal, a platform co-founded by Maxime Bayen, operational partner of Catalyst Fund, an in-depth analysis of the climate innovation landscape has been conducted.
The resulting report provides a detailed overview of emerging sectors, predominant technologies, founder profiles, targeted geographical areas, funding trends, and exit strategies for climate-focused companies in Africa. Supported by philanthropic partners such as FSD Africa, UNIDO, the GEF, and JPMorgan Chase, this effort aims to catalyze the development of the climate resilience ecosystem.
Out of the 3,000 proposals received, nearly 90% were dismissed for not having a clear focus on Africa or climate. Among the remaining 300, agriculture and energy emerge as the predominant sectors, although agriculture is more prevalent in the early stages of development. While 40% of solutions in our pre-seed pipeline are in the agricultural sector, data from Africa: The Big Deal indicates that nearly 75% of funding for climate startups in 2022 was allocated to the energy and water sectors.
"Annual climate funding should increase from the current $30 billion to nearly $300 billion to meet mitigation and adaptation needs"
Despite robust growth in funding for climate ventures, the amounts are insufficient to meet Africa's climate goals by 2030. Annual climate funding should increase from the current $30 billion to nearly $300 billion to meet mitigation and adaptation needs.
"The private sector's contribution remains low"
However, the private sector's contribution remains low, representing only 14% of total climate funding. Of the approximately 100 deals made with climate startups in Africa, only 3% are dedicated to adaptation. Although the total funding for climate-related startups in Africa reached $3.4 billion between 2019 and 2023, much of this amount comes from equity and debt investments, with only $52 million allocated as grants.
The conclusion of this analysis highlights the need to increase not only the amount of funding but also the diversity of sources, including grants, corporate debt, equity, blended and concessional financing, as well as local capital.
The comprehensive report, a result of a partnership between Catalyst Fund and Africa: The Big Deal, provides an in-depth dive into the sector, offering crucial insights for investors, innovators, and stakeholders in the African climate ecosystem.