Africa is not short of climate finance promises. What it lacks is delivery. Over the past few years, billions of dollars have been pledged to support the continent’s energy transition, from expanded multilateral climate portfolios to high-profile initiatives such as the Just Energy Transition Partnerships.
Yet progress on the ground remains uneven. Project pipelines stall, disbursements lag behind announcements, and ambition repeatedly fails to translate into implementation. This persistent gap is often framed as a financing problem. In reality, Africa’s just energy transition is first and foremost a governance challenge disguised as a funding one.
But this framing misses the deeper issue. Africa’s just energy transition is fundamentally a governance challenge disguised as a financing one. Without strong institutions, coordination mechanisms, and delivery capacity, even the most innovative financial instruments cannot deliver meaningful or equitable outcomes.
The myth of the “climate finance gap”
The idea that Africa’s energy transition is primarily constrained by a lack of finance is appealing in its simplicity. It reinforces calls for more pledges, larger facilities, and greater donor ambition. But it obscures an uncomfortable reality: significant volumes of climate finance already exist but remain undisbursed or underutilised.
Across the continent, MDBs and DFIs report difficulties deploying approved funding at the pace required. Donor-funded facilities struggle to identify bankable projects. JETP announcements generate momentum, but translating political commitments into executable programmes proves far more complex than anticipated.
This is not because Africa lacks ideas or needs. It is because finance flows only where institutions can absorb, coordinate, and govern it effectively. Capital does not move in a vacuum; it moves through systems, and in many cases, those systems are weak, fragmented, or overstretched.
Where governance breaks the transition
Energy transitions are inherently cross-sectoral. They sit at the intersection of energy policy, fiscal planning, industrial development, labour markets, climate commitments, and social protection. In many African countries, these domains are managed by separate ministries and agencies with overlapping mandates and limited coordination.
As a result:
- Energy ministries may advance generation targets without alignment to fiscal realities.
- Climate units may develop ambitious strategies disconnected from infrastructure planning.
- Finance ministries may struggle to assess long-term contingent liabilities linked to energy procurement.
- Subnational authorities are often excluded despite bearing the social and economic impacts of transition decisions.
JETPs have brought this challenge into sharp relief. While they aim to support nationally owned transitions, their implementation often requires new coordination mechanisms, delivery units, and decision-making processes that do not yet exist or lack sufficient authority.
In this context, delays are not administrative glitches; they are symptoms of governance gaps.
Project preparation is political, not merely technical
Much of the conversation around stalled climate finance focuses on project preparation: insufficient feasibility studies, weak financial models, or incomplete environmental and social assessments. While these technical elements matter, they are only part of the story.
Project preparation is fundamentally a political and institutional process. It requires:
- Clear prioritisation of projects aligned with national strategy.
- Coordination across agencies responsible for land, permits, grid access, and procurement.
- Decision-making authority to resolve trade-offs and bottlenecks.
- Capacity to engage investors, DFIs, and communities simultaneously.
In several African countries, delivery units or project management offices have emerged to address this gap, often housed in the presidency, treasury, or planning ministry. Where empowered and properly resourced, these units have improved coordination and accelerated implementation. Where they lack authority or political backing, they risk becoming parallel structures with limited impact.
The lesson is clear: pipelines fail not because spreadsheets are wrong, but because decisions are delayed, contested, or avoided.
South Africa’s experience offers a concrete illustration of why governance, not finance, is the decisive constraint.
Country focus: South Africa
South Africa’s Just Energy Transition Partnership (JETP) offers a vivid illustration of why governance, not finance, is the binding constraint in Africa’s energy transition.
Announced in 2021 with an initial USD 8.5 billion commitment from international partners, South Africa’s JETP was framed as a flagship model for accelerating coal phase-out while safeguarding workers and communities. Since then, the country has made notable progress in articulating a Just Energy Transition Investment Plan (JET IP), establishing delivery structures, and mobilising technical support.
Yet implementation has proven slower and more complex than anticipated.
Multiple institutions share responsibility for the transition, spanning energy, finance, planning, labour, and state-owned entities, each with distinct mandates and accountability frameworks. Coordinating these actors, aligning procurement pipelines with financing instruments, and embedding social dialogue into project-level decisions have emerged as persistent challenges.
The establishment of the Just Energy Transition Project Management Unit (JET PMU) reflects a recognition that delivery requires dedicated coordination and execution capacity. However, the PMU’s effectiveness depends on sustained political backing, clear authority, and integration with existing public finance and infrastructure systems.
South Africa’s experience underscores a broader lesson: even where financing commitments are significant and technical expertise is available, transitions stall without strong governance arrangements to translate ambition into action. The success of the JETP will ultimately be measured not by pledges announced, but by institutions strengthened and outcomes delivered on the ground.
Why governance determines “just” outcomes
Governance failures don't only slow transitions, they also shape who benefits and who bears the costs.
A just energy transition is not only about shifting technologies; it is about managing economic restructuring, protecting livelihoods, and ensuring inclusion. Weak governance increases the risk that:
- Benefits accrue to elites or well-connected developers.
- Communities affected by plant closures are excluded from planning processes.
- Labour transition measures are underfunded or poorly coordinated.
- Transparency and accountability are sacrificed in the rush to deliver projects.
JETPs explicitly emphasise justice, social dialogue, and inclusion. However, without robust governance frameworks, these principles struggle to move beyond rhetoric. Participation processes become symbolic, monitoring systems remain weak, and grievance mechanisms lack enforcement power. Justice, in this sense, is not an add-on; it is produced through governance.
The limits of financial innovation without institutional reform
Blended finance, guarantees, concessional tranches, and catalytic capital are frequently presented as solutions to Africa’s energy transition challenges. These instruments are important and necessary. But they cannot compensate for weak institutional environments.
MDBs and DFIs increasingly recognise this constraint. Many have expanded technical assistance, policy-based lending, and capacity-building programmes alongside project finance. Yet these efforts often operate at the margins, treated as support functions rather than core transition infrastructure.
The result is a paradox: increasingly sophisticated financial tools are deployed in contexts that lack the governance capacity to use them effectively.
Without addressing institutional readiness, financial innovation risks becoming a substitute for reform rather than a complement to it.
What effective transition governance looks like
If governance is the binding constraint, what does effective transition governance entail?
While no single model fits all contexts, several principles consistently emerge from successful cases:
- Clear institutional leadership
Transitions require an empowered coordinating authority with political backing and a clear mandate to convene actors, resolve conflicts, and drive delivery.
- Integrated planning frameworks
Energy, climate, fiscal, labour, and industrial policies must be aligned through shared planning instruments and timelines.
- Strong delivery capacity
Dedicated delivery units with technical expertise, authority, and accountability can bridge strategy and execution.
- Transparent decision-making and accountability
Clear criteria for project selection, funding allocation, and monitoring reduce risks of capture and build public trust.
- Embedded social dialogue mechanisms
Justice is operationalised through continuous engagement with workers, communities, and civil society, not one-off consultations.
These are not glamorous reforms, and they do not lend themselves to headline-grabbing announcements. But they determine whether finance flows, projects materialise, and transitions endure.
Reframing the debate: from pledges to institutions
Africa doesn't need fewer climate finance commitments. It needs fewer illusions about what those commitments alone can achieve.
As the continent accelerates its energy transition, the focus must shift from how much money is pledged to how transitions are governed. This means investing political capital in institutional reform, coordination mechanisms, and delivery capacity, even when these investments are slower and less visible than announcing new funds.
Finance will follow function, while capital will move where systems work. And until governance is treated as the foundation of Africa’s just energy transition, climate finance will continue to circulate in conferences rather than communities. The transition will not be financed into existence; it must be governed into reality.
The views expressed in this article are those of the author and do not necessarily reflect the position of Energy Transition Africa.
