The bankability gap: Why climate billions bypass African cities

By Richard Ndebele

African cities are carrying a growing share of climate risk.

Heavy rainfall overwhelms drainage systems, drought tightens water supply, heat raises energy demand, and unmanaged waste worsens health outcomes. At the same time, climate funding worldwide is expanding. Yet many municipalities across the continent still struggle to secure and use these resources at scale.

This gap is not about a lack of need. Cities have climate-related needs in abundance. The challenge is investable readiness. Climate finance tends to flow toward projects and institutions that can demonstrate clear feasibility, sound financial structuring, and dependable delivery.

Where those ingredients are missing, funding slows or goes elsewhere. That difference between available capital and municipal readiness is the bankability gap.

Climate finance is rising, but city access remains thin

Across the world, more public and private resources are being directed toward climate adaptation and low-carbon development. New facilities, blended-finance platforms, and specialised funds are multiplying. In theory, this should be good news for African cities.

In practice, much of this capital goes to projects that are already mature and can be implemented quickly. That often means large utilities or established infrastructure agencies. Municipalities, especially secondary and fast-growing cities, find it harder to access funds directly, even when they are on the front line of climate impacts. The result is a simple mismatch: cities need climate investment urgently, but the funding system rewards readiness more than urgency.

What “bankable” really means

Bankability isn’t a buzzword. It’s a practical checklist.

A bankable city climate project typically has a clear technical design backed by feasibility studies; a credible financial model, including long-term operating funding; safeguards ready for assessment; defined responsibilities for ownership, operation and maintenance; and measurable outcomes for monitoring and reporting.

Many municipalities have strong ideas and sensible priorities. But their projects stop at concept stage. Funders and investors generally need the next step: investment-ready proposals with supporting evidence and structures in place. That is where the bankability gap opens.

Why the bankability gap persists

First, project preparation capacity is thin. Turning a concept into an investment prospectus requires specialised work: technical studies, climate-risk analysis, economic appraisal, safeguards, and procurement plans. Few municipalities have dedicated units for this, and daily service pressures leave limited space for complex development work. Without preparation, projects struggle to meet funder requirements.

Second, municipal financial systems are often too unpredictable for serious finance. Climate funding is not only grants; it includes concessional loans, guarantees, and private co-investment. Those instruments depend on credible revenue streams, audited accounts, and disciplined cash and debt management. Where billing systems leak, revenue bases are narrow, or financial reporting is delayed, a city looks high-risk regardless of the project’s social value.

Third, city projects frequently fall across multiple institutions. Water, transport, waste, housing, and energy assets may sit with different entities. If roles are unclear — who owns the asset, who collects revenue, who maintains it — financiers see governance risk. Ambiguity raises cost or blocks deals.

Procurement and contract management also matter. Climate projects are technically demanding and time sensitive. They require transparent, competitive, and efficient procurement plus strong oversight to prevent overruns. Where procurement systems are slow or inconsistent, funders anticipate implementation risk and hesitate.

Finally, reporting gaps make finance harder to sustain. Climate funding increasingly demands evidence of results: emissions reduced, floods mitigated, water saved, resilience improved. Cities that lack monitoring tools and reliable data struggle to prove impact, weakening their chances of repeat funding and long-term partnerships.

The irony of fast-growing cities losing out

Africa’s urbanisation is accelerating, especially in secondary cities. These cities are growing quickly but typically have smaller balance sheets and fewer technical staff than major capitals. Their projects may also be smaller, making transaction costs look high to financiers.

Yet secondary cities are central to Africa’s economic future. If they cannot access climate investment, the costs show up later as infrastructure losses, productivity declines, and widening service backlogs. Closing the bankability gap is therefore an economic growth issue as much as a climate one.

What a winning city looks like

Cities that consistently attract climate investment share a few practical traits. They maintain a shelf of prepared projects rather than scrambling for one-offs. They strengthen revenue collection and publish reliable financial statements. They clarify institutional roles early. And they track outcomes in ways funders can trust.

These are not luxury reforms. They are the foundations that allow a municipality to translate climate needs into financeable opportunities.

Three practical shifts within 18 months

The first shift is to build a rolling project pipeline. Instead of preparing one project at a time, cities need a small, focused project-preparation function that standardises feasibility studies, costing, safeguards and business cases. With that in place, projects can move quickly into funding windows as they open.

The second shift is to improve creditworthiness by making city finances predictable. Updating property registers, tightening billing, reducing revenue leakages, and publishing audited accounts on time immediately improves confidence. Clear debt and cash-management practices help cities qualify for concessional lending, blended finance, and private co-investment.

The third shift is to standardise climate procurement and monitoring. Templates for climate procurement, safeguard checklists, and simple monitoring frameworks reduce delays and uncertainty. Cities that can show transparent contracting and measurable outcomes are easier to finance and faster to scale.

A regional opening

Across Southern Africa, including Zimbabwe, the opportunity is clear. Cities face rising climate pressures in water, sanitation, waste, roads, housing, and energy — all areas where properly designed projects can attract climate investment. The quickest route is to start with bankable pilots that are well prepared, well costed, and operationally sustainable, and then scale what works.

The focus should be on readiness and delivery, not on chasing the largest numbers first.

Conclusion

African municipalities are not short of climate priorities. They are short of the preparation and financial muscle that turn priorities into investable projects. The climate-ready African city of the next decade will not be defined only by need. It will be defined by its ability to prepare credible projects, manage funds cleanly, and deliver measurable outcomes for residents.

Closing the bankability gap is the most practical step cities can take to unlock climate finance and deliver resilient services.

Richard Ndebele is Manager: Technical, Research & Quality Assurance at the Chartered Governance and Accountancy Institute in Zimbabwe (CGI Zimbabwe) and Country Champion for the PAFA Sustainability Centre of Excellence. He writes on governance, sustainability, and public financial management in Africa.
Contact: rndebele@cgizim.org