For many countries in the Global South, climate finance remains an elusive thing—desirable, necessary, and beyond reach. The headline figures at climate summits make for gushing headlines; the reality is more of a thin trickle.

Africa receives less than 5 percent of total climate investment worldwide. At around $30 billion a year, this is eight times less than we need to climate-proof our food systems, our energy and transport infrastructure, and our urban and rural environments. Moreover, most climate finance is in the form of loans, rather than grants, which adds to already heavy foreign debt burdens.

Put simply, Africa cannot afford to take on more debt to solve a problem it did not create. The solution must be to build technical expertise within our own financial institutions to identify both climate risks and good projects for climate investment. And we need to engage the private sector in this effort. Government resources alone are insufficient to deal with the magnitude of our climate crisis.

The climate finance gap is not just an African problem. Asia and Latin America are also struggling to raise funding on terms they can afford. That is why 520 public development banks have come together to work on a global framework for sustainable investment. Known as the Finance in Common initiative, these banks are sharing best practices in capacity-building, project preparation, and in various financial instruments, such as green bonds, that help to make projects more attractive to private investors from a risk perspective. They have also agreed to allocate more resources at an affordable cost for projects that build climate resilience and contribute to achieving the United Nations' 2030 Sustainable Development Goals.

Climate-Proofing Farm Credit

For a country like Tanzania, where two-thirds of the population live off the land and agriculture accounts for 28 percent of GDP, our agricultural credit institutions are a good place to start building expertise. Most farming in Tanzania is reliant on rain-fed agriculture, which is increasingly vulnerable to climate impacts such as erratic weather and more frequent droughts. Making agriculture more climate resilient is vital for the livelihoods of millions of farmers and for the nation's food security. It is also a vital insurance for creditors.

With technical assistance from the Global Center on Adaptation (GCA) and African Development Bank (AfDB) under the Africa Adaptation Acceleration Program, the Tanzanian Agricultural Development Bank (TADB) began to assess climate risks in its loan portfolio and how to factor in climate resilience in its lending and advisory services.

This exercise in capacity-building is delivering many wins. TADB has been able to access new capital pools on the back of its enhanced climate expertise, which will in turn support additional lending for climate adaptation. TADB now aims to act as a conduit for climate-smart innovations, such as the drought-resistant crop varieties developed by CGIAR, the world's largest network of agricultural research organizations and private-sector agribusinesses, to make farming incomes more secure and farming less of a credit risk.

More Resilient Transport Networks

Banks are not the only institutions that can benefit from building climate-readiness. It will be crucial for public and private companies, too. In a context where credit is both expensive and scarce, every dollar invested for growth must be climate-informed.

Take transport, for example. Virtually all forms of transport infrastructure, including roads, bridges, railways, airports, and port facilities are becoming increasingly vulnerable to climate-related hazards, among them flooding, landslides, erosion, and sand deposition. In Tanzania in recent years, heavy floods have forced railway services to be suspended for months at a time along the central corridor linking the port of Dar-es-Salaam to Isaka, with massive economic losses.

In response, Tanzania's railway operators, with the help of the GCA, have begun to integrate climate risks in railway maintenance and operations. The collaboration is producing better technical designs for track and bridge reinforcements in stretches prone to flooding, and it has also identified potential nature-based interventions, such as soil conservation and tree planting, that could reduce the incidence of landslides and heavy flooding.

Identifying the best long-term climate solutions is the first step in getting them financed, and both the World Bank and the AfDB are now committed to investing in Tanzania's railway system to protect this important economic lifeline from the worst impacts of global warming while providing wider benefits to neighboring states in the region.

Africa Needs More Climate-Ready Projects

Tanzania was one of the first African countries to draw up an Africa Adaptation Acceleration Program (AAAP) Country Compact—an investment roadmap that outlines adaptation investment priorities, financing needs, and finance mobilization strategies for implementing climate-adaptation measures. The country hopes to raise almost $10 billion over the next three years to climate-proof various sectors of the economy.

African nations have been living with the scourge of climate change for many years now. But identifying bankable, climate-ready projects to place the continent on a firm path to sustainable green growth has been hard. Building local technical expertise in our banks and businesses is the first step toward identifying climate risks and solutions. It will enrich the continent's pipeline of climate-proof projects, stimulate domestic credit and investment, and, hopefully, attract a greater share of global climate finance.

Professor Patrick Verkooijen is chancellor of the University of Nairobi and CEO of the Global Center on Adaptation.

The views expressed in this article are the writer's own.