Funding African Solutions to the Climate Crisis: Why Local Venture Capital Innovation Holds the Key to Climate Resilience

It’s a scorching midday in Nigeria’s Middle Belt. Abu has just finished his late breakfast — a habit he’s developed during the increasingly unpredictable farming seasons of recent years. Standing in his fields, beads of sweat rolling down his weathered face, he watches helplessly as his cassava plants droop under the merciless sun. The rains that should have come weeks ago are nowhere in sight. 

This is the third season in a row where the weather has defied generations of farming wisdom. But there’s hope on Abu’s horizon — literally. On the western edge of his farm, rows of young neem trees stand tall, part of a climate-smart farming initiative that’s transforming lives across the region. Just last season, after implementing new resilient farming techniques, Abu’s yield doubled. His farm isn’t just growing food anymore; it’s capturing carbon through these strategically planted trees. 

This story isn’t fiction — it’s the result of the work of Thrive Agric, a Nigerian agtech company which, backed by venture capital (VC), is supporting smallholder farmers and fighting climate change by planting millions of trees. 

Thrive Agric is one of our portfolio companies at Ventures Platform, and its work is an example of what’s possible when African companies develop solutions to African problems. The company is currently transforming the lives of 30,000 farmers through its climate-resilient agriculture programs — including a groundbreaking partnership with Rabobank through which it’s implementing an ambitious plan to plant 3 million trees for carbon capture, while training farmers in regenerative agriculture practices. The program’s early results show average yield improvements of 30-50% through climate-smart practices — crucial progress given that up to 65% of Africa’s arable land is already degraded.

This success story illustrates not only the importance of local African solutions to the climate crisis, but also the need for Africa-based venture capital to play a central role in the continent’s climate response.

Leveraging Venture Capital to Address the Climate Crisis in Africa

At Ventures Platform, we’re witnessing a profound paradox: Africa contributes only 4% of global carbon emissions, with per capita emissions of just 1.0 metric tons compared to the global average of 4.7 metric tons, yet nevertheless faces the world’s most devastating climate impacts. By 2070, these impacts could cost our continent up to $350 billion annually, and by 2040, they are projected to cause a 2-4% annual loss in Africa’s GDP.

The scale of this challenge is staggering. Up to 5% of Africa’s 2 billion population could be forced to migrate due to climate change by 2050, under some projections. Yet remarkably, only 3.3% of global climate finance flows to Africa (as of 2021/22), despite our region hosting over 18% of the world’s population. This disparity between Africa’s minimal carbon footprint and our outsized climate vulnerability presents an urgent opportunity for innovation in venture capital. Here’s why:

• First, VCs are built to back transformative innovation at speed. Traditional development approaches, while valuable, often move too slowly to match the pace of climate change. In contrast, venture-backed startups can rapidly test, iterate and scale solutions that help communities adapt to climate challenges.
• Second, Africa-focused VCs understand the unique complexities of our markets. We recognize that solutions must be both climate-smart and economically viable in a region where, according to the World Bank, 464 million people live on less than $2.15 per day. With an estimated 600 million Africans lacking electricity access and 65%-70% of the workforce employed in agriculture, this local knowledge helps us identify and scale innovations that might be overlooked by global investors seeking traditional returns.
• Third, our longer investment horizons — typically 7-12 years compared to the standard 5-7 years of non-VC asset classes — align better with climate solutions that require patient capital. This flexibility allows us to support startups working on infrastructure-heavy solutions like renewable energy access or climate-resilient agriculture.

A New Investment Playbook for African Venture Capital

However, capitalizing on these advantages requires a new investment playbook. Here’s what we’ve learned works:

Blended Finance Is Essential: Climate solutions often require significant upfront capital and have longer paths to profitability. As of 2021/22, only 18% of climate adaptation finance in Africa came from private sources, highlighting an enormous opportunity for growth. We’re seeing success with blended finance approaches that combine venture capital, strategic debt financing and concessional funding from development finance institutions. This mix of capital allows for more flexible funding structures that can support both early-stage innovation and infrastructure development.

Local Problems Need Local Solutions: While global climate tech solutions are important, Africa’s unique challenges demand locally-developed innovations. For instance, Thrive Agric isn’t just working on carbon reduction — it is implementing biochar technology to improve soil quality and water retention, developing comprehensive farmer education programs, and creating accessible weather prediction tools for smallholder farmers.

Measure What Matters: Traditional VC metrics remain important, but climate-focused investing requires additional impact metrics. Thrive Agric demonstrates this by measuring both yield improvements and carbon removal units through its tree planting and regenerative agriculture initiatives.

Key Areas Where African VCs Can Drive Climate Innovation

Looking ahead, we see three critical areas where African VCs can drive climate innovation:

1. Agricultural Resilience: With over 95% of African farming relying on rainfall, climate-smart farming solutions represent our biggest opportunity for impact. Thrive Agric’s comprehensive approach shows how innovations in regenerative agriculture, agroforestry and biochar technology can help farmers adapt while improving yields.
2. Distributed Clean Energy: Rather than replicating centralized grid systems, African startups are leapfrogging to distributed renewable solutions. With only 2% of global clean energy investments flowing to Africa, VCs can accelerate this transition by backing innovations in solar, storage and smart distribution.
3. Climate Finance Innovation: New financial tools can help communities build resilience while creating sustainable business models. For instance, with just over 3% of global climate finance directed to Africa, only a fraction of that amount is reaching the continent’s small-scale farmers, presenting a massive opportunity for innovation.

The challenge before us is immense. Sub-Saharan Africa’s population is expected to rise by 79% to 2.2 billion by 2054, which means that many more people will face climate risks. Traditional development aid alone cannot move fast enough to build the resilience we need — and much of that aid is drying up as it is.

That’s why venture capital, with its focus on innovation and scale, must play a central role in Africa’s climate response. Our work at Ventures Platform has shown that this approach is not just impactful — it’s profitable. As the climate crisis accelerates, solutions developed for Africa’s challenging conditions will become increasingly valuable globally. The question isn’t whether to invest in climate innovation, but how quickly we can scale these solutions to meet the urgency of our climate challenge.

Dotun Olowoporoku is the Managing Partner, and Dolapo Morgan is an Investor at Ventures Platform.

Photo credit: C.Schubert