Africa’s Green Entrepreneurs Offer Climate Solutions & Investment Opportunities

case study

By: Richenda Van Leeuwen, Executive Director, The Aspen Network of Development Entrepreneurs (ANDE)

The evidence is undeniable: the climate is changing. However, the effects of climate change are not felt equally among the world’s population. Research shows that climate change hits developing economies the hardest by exacerbating existing inequalities and putting already vulnerable communities at further risk. The continent of Africa is highly vulnerable to the effects of climate change, a situation aggravated by the interaction of multiple stresses, occurring at various levels, and insufficient adaptive capacity. 

As Africa struggles to combat the effects of climate change, small businesses have a vital role to play in developing and deploying adaptive solutions and in driving low carbon growth, and emissions reductions, including in urban environments. The need for innovative climate solutions will only continue to grow alongside Africa’s rapidly expanding population. By 2050, Africa will be home to 1.3 billion more people than it is today, which will increase the environmental impact of the building and construction sector. 

Small and medium enterprises (SMEs) account for 90% of businesses in Africa, providing an estimated 80% of jobs across the continent.

Africa’s green entrepreneurs are developing, deploying, and expanding localized solutions to address the global climate crisis, yet, in 2018, according to a report by UNFCCC, only 2% of incubators and accelerators focused on addressing climate challenges worldwide, all too few of them in Africa. Climate change adaptation in Africa presents a largely untapped investment opportunity: according to the Center for Strategic & International Studies, such solutions in Africa offer US $3 trillion of market potential by 2030. But it needs to be sufficiently supported through climate finance, tailored to meet the needs of small businesses.  

Small businesses have an essential role to play in Africa’s sustainability but entrepreneurs— especially women green entrepreneurs—need access to locally available capital, at the right time and in the right forms, in order to grow their businesses successfully and reach their potential. Entrepreneurs need high-quality business support services such as business planning, as well as incubation and acceleration support to grow and cultivate a sustainable, equitable and resilient Africa. They also need access to markets and mechanisms by which to share knowledge across sectors.  

The Aspen Network of Development Entrepreneurs (ANDE) works with nearly 300 small business intermediaries, including many across Africa to support vibrant small business ecosystems. Given ANDE’s existing focus on climate action, including re-granting support for African women climate entrepreneurs, we are proud to support the launch of the African Alliance for Sustainable Cities and Built Environments. We look forward to working together with sector leaders to help elevate the importance of small businesses as key climate solution providers for sustainable cities and the built environment across Africa. Together we can help ensure SMEs have the financing, tools and support they need to succeed.