Compact with Africa Green Business Fund

The Compact with Africa – Green Business Fund (CwA-GBF) helps small and medium-sized enterprises (SMEs) in Africa access climate finance to adopt and scale climate solutions.

Low-carbon growth in African countries can be achieved through green and inclusive approaches to development. Yet, a lack of financing, supporting policies, and capacity often hinders climate-smart initiatives.

To overcome this challenge, the Compact with Africa with Africa – Green Business Fund supports SMEs by:

Fostering an enabling environment for private investment in climate-smart initiatives.
Building and supporting local capacity.
Establishing innovative climate finance models that attract climate finance for local green businesses, bringing jobs and economic impact.

The Fund fills an important niche in climate finance, focusing on SMEs and climate resilience, adaptation and mitigation. Since its inception, the fund has allocated over $24 million in technical assistance and pilot activities across the 15 Compact with Africa partner countries. The Fund does not operate in isolation, but is strongly embedded within, and leverages, WBG country dialogue and operations.

What does the fund do?

Foster policy dialogue and creates an enabling environment

The Fund works with governments and the private sector to identify and dismantle the policy, regulatory, and market barriers that prevent SMEs from accessing climate finance. Through analytical work, technical assistance, and structured dialogue, it helps build the enabling environment that private investment needs to flow.

Build capacity and provide technical assistance

The program enhances the skills and knowledge of public and private actors on climate change, empowering them to build businesses fit-for-purpose for a changing climate, and attracting new players to the climate-smart SME market. It does so by equipping SMEs and financial institutions with the tools and expertise to identify risks and opportunities, develop climate-smart business models, and access sustainable finance, through targeted training, analytical work, and hands-on technical assistance.

Design and implement innovative finance instruments

Pillar 3 of the Fund is focused on turning ambition into action - designing and piloting innovative financial instruments that mobilize private and institutional finance towards climate-smart SMEs through de-risking, incentivization and targeted technical assistance.

Impacts

The priorities of CwA Green Business Fund are aligned with World Bank’s Next Generation Africa Climate Business Plan for transformational climate action on the continent. The CwA-GBF supports 6 priority areas through policy dialogue, analytical work technical assistance and pilot activities.