Strengthening Project Preparation for Subnational Climate Finance in Africa: A Systems and Operations Management Approach

The research shifts the analytical lens from the supply side, i.e. donor governments, multilateral development banks and global facilities towards the demand side, i.e. cities and project sponsors. Drawing on insights from municipal governments, PPF managers, development finance institutions, development agencies and technical advisors, the study develops a novel taxonomy of upstream subnational, urban and climate-focused PPFs. This framework enables bottlenecks to be analysed across facility models and project lifecycle stages, providing a structured basis for identifying where constraints converge and prioritising interventions. 

The findings identify four interconnected bottlenecks constraining climate finance mobilisation: 

(i) demand-side constraints relating to local capacity and absorptive readiness; 

(ii) supply-side constraints arising from fragmented PPF mandates, funding structures and support models; 

(iii) demand-side creditworthiness and trust constraints that limit municipal engagement with financiers; 

and (iv) system-level constraints driven by vertical misalignment between national and subnational actors and downward risk transfer due to fragmented capital sources characterising blended finance. 

The study finds that these challenges are largely systemic, affecting numerous diverse PPF models, rather than facility-specific, and disproportionately affect secondary and intermediary cities. It concludes that improving climate finance mobilisation requires coordinated reforms across demand-side, supply-side and system-level actors, alongside stronger alignment between PPFs, national gov