Climate financing to Malawi, others up

Revitalizing Malawi’s Economy: Harnessing Climate Financing for Growth and Prosperity

Post was last updated: September 21, 2025

Key Business Points

  • Multilateral development banks (MDBs) climate finance to low- and middle-income economies, including Malawi, increased by 14 percent year-on-year to $85.1 billion, presenting opportunities for investment and growth in the region.
  • Climate change mitigation and adaptation efforts received significant funding, with $58.8 billion (69 percent) targeting mitigation and $26.3 billion (31 percent) addressing adaptation, highlighting the need for sustainable business practices.
  • Debt repayments and climate finance pose a challenge for African nations, including Malawi, with ActionAid estimating $60 billion in debt repayments in 2024, while rich nations are urged to provide $1.4 trillion annually in climate finance, emphasizing the importance of financial management and resource mobilization.

The latest data from the European Investment Bank (EIB) reveals a significant increase in climate finance provided to low- and middle-income economies, including Malawi. The $85.1 billion in funding represents a 14 percent year-on-year increase and demonstrates the commitment of multilateral development banks (MDBs) to supporting climate resilience and sustainable development. The African Development Bank (AfDB) Group, one of the key financiers, has stated that half of its climate finance goes towards helping African countries build resilience, protect livelihoods, and secure a climate-resilient future.

According to Anthony Nyong, AfDB director for climate change and green growth, "Africa is pushing the pedal on actions that transform Africa’s green potential in energy, nature-based solutions, innovation, and a vibrant workforce." This emphasis on green growth and climate adaptation is crucial for Malawi’s economic stability, as erratic rainfall, prolonged droughts, and pest infestations continue to threaten the country’s economic stability. The United Nations Development Programme (UNDP) resident representative, Fenella Frost, has called for investment in climate resilience, "Malawi must take a strategic approach to ensure investment in key areas such as capacity building for resource mobilisation and utilisation."

The issue of debt repayments and climate finance is a pressing concern for Malawi and other African nations. ActionAid estimates that African nations will pay $60 billion in debt repayments in 2024, while rich nations are urged to provide $1.4 trillion annually in climate finance. This "historic debt" is a significant burden for Malawi, with ActionAid data showing that the country is owed $750 billion by rich countries based on historic and projected atmospheric appropriation. As Fenella Frost noted, "investment in climate resilience" is crucial for Malawi’s economic stability, and "ndiye njira yathu" (this is our way) towards achieving sustainable development and "tsogolo lathu la green" (our green future).

In the face of these challenges, Malawi’s business community must prioritize financial management and resource mobilization to ensure the country’s economic stability and growth. The increase in climate finance from MDBs presents opportunities for investment and growth in the region, and "kugwira ntchito kwa njira ya ulere" (working together for a better future) is essential for achieving "malawi wokongola" (a prosperous Malawi). As the country moves forward, it is essential to "kuchita kalimbikali" (be strategic) in investing in key areas such as capacity building, resource mobilization, and climate resilience to ensure a "tsogolo lathu la ulere" (a better future) for all Malawians.

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Vanessa Banda
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