Malawi faces $4.28 billion climate finance gap through 2035

12:05

By: Azzat Manal

Malawi faces $4.28 billion climate finance gap through 2035

Malawi is facing a major funding shortfall as it seeks to mobilize $7.06 billion by 2035 to finance climate action, with a gap of approximately $4.28 billion expected to depend largely on international donors and climate finance mechanisms.

Under the country’s latest climate plan, domestic resources are expected to provide only $2.78 billion, or around 39% of the total requirement, while the remaining 61% would need to come from international climate finance.

Natural Resources Minister Patricia Wiskes said the government was committed to increasing domestic resource mobilization and strengthening national capacity, but acknowledged that the scale of the challenge was beyond what Malawi could address through its own resources alone.

The financing challenge comes amid growing concerns over a decline in international development assistance. Official development aid fell by 9% globally in 2024, while the Organisation for Economic Co-operation and Development projected a further decline of between 9% and 17% in 2025.

Malawi is therefore calling on the international community to meet its commitments under the Paris Agreement by providing climate finance that is predictable, adequate and accessible, while also supporting technology transfers and capacity-building programs.

The government argues that Malawi contributes only a very small share of global greenhouse gas emissions but is disproportionately exposed to the consequences of climate change, including rising economic losses, damage to livelihoods and disruptions to national development.

The country’s climate strategy identifies several obstacles to attracting the necessary funding, including limited institutional capacity, financial constraints, fragmented data and a shortage of expertise needed to develop investment-ready climate projects.

To address these challenges, the government plans to prepare an investment strategy aimed at turning climate priorities into bankable projects while improving access to international climate funds.

Malawi has faced repeated climate-related shocks in recent years. Tropical Storm Ana and Cyclone Gombe struck in 2022, followed by Cyclone Freddy in 2023 and the effects of El Niño in 2024. These events repeatedly forced authorities to revise economic growth expectations downward.

Growth projections were cut from 5.2% to 1.2% in 2022, from 2.7% to 1.5% in 2023 and from 3.2% to 2.3% in 2024, largely because of weather-related disasters. According to estimates from the Food and Agriculture Organization of the United Nations, El Niño-related impacts in 2024 caused losses of about $341 million, equivalent to 2.4% of Malawi’s gross domestic product.

The World Bank has also warned that climate change could reduce Malawi’s GDP by between 3% and 9% by 2030 if the country does not accelerate climate adaptation measures.

For Malawi, closing the financing gap will therefore be critical not only to implementing its climate commitments but also to protecting economic growth, livelihoods and long-term development from increasingly severe climate-related risks.