Dr Muhammed Sayed - Principal Specialist Climate and Nature Finance at the DBSA and Dr. Michael Boulle Senior Specialist Climate, Energy & Just Transitions at ICLEI Africa.
As the global climate community gathers in Antalya, Türkiye, for COP31, the climate finance conversation must increasingly focus on a fundamental question: how do we move from climate ambition to projects that can be financed and delivered?
This challenge is particularly acute at the municipal level. Cities and municipalities are on the front line of climate action, responsible for essential infrastructure and services while confronting energy insecurity, infrastructure backlogs, climate risks and growing demands for resilient development. Yet many face constraints in project preparation, technical capacity, institutional readiness and access to appropriate finance.
This is where the implementation gap becomes tangible. The challenge is often not a lack of climate ambition or even a lack of potential projects, but the complex work required to translate those ambitions into technically feasible, institutionally workable and financeable investments. The Just Municipal Embedded Generation (JMEG) programme provides a practical illustration of what this process looks like in practice. Funded by the UK Partnering for Accelerated Climate Transitions (UK PACT) and implemented by ICLEI Africa in partnership with the Development Bank of Southern Africa (DBSA), JMEG worked with six South African municipalities to assess and advance appropriate pathways for embedded generation. This included technical assessments, grid impact studies, financial and ownership modelling, regulatory analysis, transaction structuring and capacity building, tailored to the different starting points and needs of each municipality.
This is an important lesson around climate finance. The question is not only whether capital is available, but whether the underlying conditions exist for a project to absorb that capital and move towards implementation. Project preparation must therefore do more than package projects for investors: it must test assumptions, identify binding constraints and help municipalities determine a realistic pathway forward.
A project may have strong climate and development benefits, but without technical feasibility, a viable business and financing model, appropriate institutional arrangements and the capacity to navigate regulatory and procurement requirements, capital will struggle to reach the ground.
This is particularly relevant within the country’s Just Energy Transition. Municipalities are increasingly navigating new roles and choices while still managing the pressures of their existing electricity businesses. Their ability to participate in the energy transition therefore depends not only on identifying renewable energy opportunities, but on strengthening the underlying systems and capabilities needed to pursue them.
But the challenge extends beyond individual projects. Across Africa, the scale of the climate and infrastructure financing gap requires us to consider how finance can be better connected to local priorities and how intermediaries can help turn climate ambition into investable opportunities.
This is reflected in the complementary themes that DBSA and ICLEI Africa will bring to COP31: “Closing the Implementation Gap - Financing Local Climate Infrastructure” and “Unlocking Local Climate Action - The Strategic Role of Intermediaries in Strengthening Urban Resilience in Africa.”
Together, these themes point to an important message - getting climate finance to cities requires more than capital. It requires project preparation, technical assistance, institutional strengthening, appropriate financing instruments and partnerships that can support projects from concept through to implementation, i.e. an ecosystem capable of helping municipalities move through the different stages.
For development finance institutions, this means playing a role beyond only the provision of capital – helping bridge the gap between climate ambition, local priorities and implementation, by strengthening project preparation, building credible pipelines, addressing institutional and financing barriers and connecting projects to appropriate sources of public and private capital.
The JMEG experience demonstrates that municipalities can be important drivers of the just transition when they have the right support, tools and partnerships. The broader African experience also shows that scalable solutions require effective intermediaries capable of connecting local priorities with finance and investment.
If we are serious about building sustainable and resilient cities, the next phase of climate finance must therefore focus on closing the implementation gap – strengthening readiness, developing investable pipelines and mobilising capital where climate action ultimately needs to happen - at the local level, in our cities and communities.
From readiness to resilience, we need to mobilise finance, build capacity and deliver climate infrastructure where it matters most.