Debt./ PHOTO; pexels-towfiqu-barbhuiya
African governments are set to receive new technical and institutional support in managing sovereign debt, following the launch of a facility designed to embed sustainability into debt strategies while mobilising capital for climate and development priorities.
The initiative, announced in Nairobi by FSD Africa in partnership with the UN Economic Commission for Africa (UNECA) and backed by the Children’s Investment Fund Foundation (CIFF), comes as rising debt service costs reduce fiscal space at a time of mounting climate and development needs.
Practical Support for Debt Offices
The programme will provide funded, hands-on assistance to Debt Management Offices (DMOs) and Ministries of Finance.
Support will include sustainability-integrated debt strategies, debt sustainability analysis (DSA), preparation and issuance of innovative instruments such as sustainability-linked bonds and debt-for-development swaps, investor engagement, and institutional strengthening.
Mark Napier, CEO of FSD Africa, described the shift as a matter of fiscal resilience.
“Sustainable finance is not a label, change it’s a fiscal strategy. By integrating sustainability into sovereign debt management, countries can lower refinancing risk, extend maturities, and unlock capital for productive, climate-positive national priorities,” he said.
Linking Debt and Climate Goals
The launch follows the second Africa Climate Summit in Ethiopia, which stressed Africa-led solutions and stronger domestic capital mobilisation.
These priorities are central to FSD Africa’s 2025–2030 strategy, which aims to catalyse £10 billion of private capital, most of it in local currency, for green and resilient growth.
UNECA highlighted the importance of aligning fiscal and climate strategies.
“Africa’s debt challenges cannot be separated from its climate ambitions. Fiscal stability and climate action must go hand in hand. By aligning debt strategies with sustainability, governments can preserve fiscal space, refinance on better terms, and unlock capital for climate resilience, energy transitions, and growth,” said Dr. Stephen Karingi, Director of UNECA’s Macroeconomics, Finance, and Governance Division.
Why Now?
Many African countries face mounting repayment pressures, often spending more on servicing debt than on health or education.
At the same time, financing needs for climate adaptation, resilient infrastructure, and energy transition are growing.
The new facility seeks to ease refinancing pressures while enabling governments to channel capital toward long-term development priorities.
By embedding sustainability into debt strategies and strengthening domestic markets, the programme aims to create a virtuous cycle: lowering near-term risk while securing affordable funding for national priorities.
CIFF emphasised that transparency and risk-sharing are essential if African sovereigns are to borrow on better terms.
“International partners can help African sovereigns borrow on better terms, lower cost, longer tenors, and more predictability by supporting transparency, sensible standards, and smart risk-sharing. Over the next year, the priority is turning commitment into execution so affordable, sustainability-minded finance reaches countries that need it,” said Kate Hampton, CEO of CIFF.
Scaling Through Guarantees
Alongside technical assistance, the partners are inviting development finance institutions, donors, philanthropies, and private investors to support a multi-country guarantee and risk-sharing mechanism.
An initial target of US$10 billion in guarantees and first-loss capacity could reduce execution risks, improve borrowing terms, and draw institutional investors to Africa’s sovereign debt markets.
The program reflects a growing shift in global development finance: pairing technical support with mechanisms to de-risk investment.
For African governments, the challenge now will be to translate support into action through reforms, coordination, and effective engagement with investors.
If successful, the initiative could not only relieve immediate debt pressures but also lay the foundation for sustainable and inclusive growth, demonstrating that fiscal stability and climate ambition can reinforce one another.
About the Partners
The Children’s Investment Fund Foundation (CIFF) is an independent philanthropy investing over $3 billion globally to improve child health and nutrition, expand opportunities for women and girls, and tackle climate change, working with governments, multilaterals, NGOs, and the private sector.
FSD Africa, founded in 2012 and funded by the UK International Development, is a Nairobi-based development agency operating in more than 30 countries.
Its work focuses on policy reform, capacity building, and financial market infrastructure to address Africa’s economic, social, and environmental challenges, with a strong emphasis on green investment and financial inclusion.
The UN Economic Commission for Africa (UNECA), the UN’s regional arm, supports inclusive industrialisation and sustainable finance across the continent.
Its Macroeconomics, Finance and Governance Division provides technical guidance on debt, capital markets, and resource mobilisation, aligning national fiscal strategies with continental and global development goals.
