• Sustainable Finance

Financing our future: A new paradigm for Africa Europe

  • The Africa-Europe Foundation

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This paper builds on the Africa Europe Foundation's initial report on “The State of Africa-Europe 2024” which highlights and assesses progress in sustainable finance. This represents a priority area of joint commitment stemming from the 6th EU-AU Summit and provides an operational blueprint for a transformative, future-proof partnership between Africa and Europe.

Africa and Europe have significant opportunities to collaborate more closely to increase and simplify access to finance through a wide range of domestic and international sources. This paper identifies, measures Europe can take to facilitate better and simpler access to finance for African governments. It also examines the current state of sustainable finance and its critical importance to Africa.

Key focus areas include mitigation, adaptation, resilience building, and addressing loss and damage. These efforts encompass energy sector, infrastructure, land use, agriculture, forests, and the blue economy. The paper also explores innovative mechanisms to channel funds to the grassroots levels ultimately enhancing local resilience.

The sustainable finance sector is vibrant, with African and European countries positioned to make significant contributions by demonstrating shared political will. Additionally. The cross-continental partnership could also explore broader Multilateral Development Bank (MDB) reform, creative blended public-private finance, debt relief through swaps, clauses, and restructuring, bond issuance of bonds, and expansion of carbon finance. Additionally, innovative funding mechanisms, such as global tax and levies, financial and insurance products, and tackling illicit financial flows (IFF) are discussed. Governments across Africa could also consider, fiscal reforms, diaspora bonds, and deepening domestic capital markets.

Collectively, these actions have the potential to bring about significant improvements in both the volume of funding flows and the ease with which such flows are accessed. However, it is crucial to recognize that much more needs to be done to overcome current barriers.

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About the author

The Africa-Europe Foundation

The Africa-Europe Foundation (AEF) is the only organisation of its kind shared equally by stakeholders from both Africa and Europe. It is an independent platform for multi-stakeholder dialogue, frank debate and strategic analysis bringing together experts and leaders from diverse organisation settings (civil society, policymaking, private sector, academia), to strengthen the partnership between Africa and Europe. Our multi-stakeholder Strategy and Working Groups offer a safe space for exchange on critical, sometimes contentious issues between Africa and Europe and form the backbone of AEF’s work to catalyse innovative partnerships and unlock untapped areas of cross-continental cooperation, from Green Industrialisation to the future of health and the reform of financial systems to climate, energy, agri-food systems, blue economy, youth, Digital and AI.