Climate finance training for Somali banks signals shift toward private-sector climate action in Mogadishu
MOGADISHU — Somalia’s banking sector took its first coordinated step into climate finance on Sunday, as the National Climate Fund (NCF) and the Somali Bankers Association (SBA) convened the country’s inaugural training on how lenders can access, structure, and deploy climate capital.
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Held in Mogadishu, the workshop introduced senior banking professionals to the global climate finance architecture — the funds, rules and pathways that determine how money flows from international mechanisms to national institutions and, ultimately, to communities most exposed to climate shocks. Organizers said the program is designed to build the technical fluency Somali banks need to unlock investment for climate resilience, especially in climate-sensitive sectors such as agriculture and energy.
“Somali banks are the backbone of the economy and a key enabler of current and future climate financing,” said Liban Obsiye, Executive Director of the National Climate Fund. “The NCF is committed to ensuring strong private-sector participation in national resilience-building efforts.”
SBA Chief Executive Officer Dr. Ahmed Khadar A. Jama described the training as both timely and practical given the fast-evolving global landscape for green and resilience finance. “This climate finance workshop is significant for Somali bankers, as it helps them build expertise and take advantage of emerging business opportunities that can contribute to Somalia’s economic development,” he said.
Representatives from all Somali banks attended, according to organizers. Many lenders already have exposure to sectors that sit on the frontlines of climate risk — from rain-fed agriculture and pastoral value chains to off-grid energy and water services — underscoring the need for tools that can de-risk lending, extend appropriate tenors, and align products with climate adaptation and mitigation outcomes.
The training forms part of a broader push, supported by the UK Foreign, Commonwealth and Development Office’s (FCDO) Pioneer Country Trials program, to expand Somalia’s access to global climate funds and channel finance to vulnerable communities. The UK-backed initiative pilots coordinated approaches to climate finance across selected countries, including Somalia, and provides technical and financial assistance to strengthen national climate planning and improve access to international mechanisms.
Somalia is among the world’s most climate-vulnerable nations, contending with cycles of drought and flooding that strain livelihoods and infrastructure. In such a context, banks are pivotal to translating climate strategies into investable projects — financing drought-resilient agriculture, rehabilitating water systems, scaling clean energy, and supporting small businesses to adapt.
By focusing on the “how” of climate finance — from understanding fund eligibility to structuring bankable proposals — the Mogadishu workshop sought to close the gap between international capital and local demand. It also created a platform for Somali bankers to exchange experiences on risk management, product design, and client engagement specific to climate-related lending.
Organizers said the training emphasized that mobilizing climate finance is not a single transaction but a system of capabilities spanning origination, due diligence, safeguards, measurement, and reporting. For banks, that often means building internal expertise and forging partnerships with government, development partners, and project developers.
Key areas covered included:
- How major international climate funds operate and where the Somali private sector can participate.
- Developing pipelines of bankable adaptation and mitigation projects that meet fund criteria.
- Environmental and social safeguards, and the monitoring, reporting, and verification requirements typical of climate finance.
- Designing financial instruments — such as blended finance structures — that reduce risk and crowd in private capital.
- Aligning investments with national climate priorities to accelerate resilience at the community level.
The NCF — described as a country-led mechanism to mobilize, manage, and channel climate finance for adaptation and mitigation — is positioning itself as the connective tissue between global funds and Somalia’s domestic financial system. By convening lenders with shared incentives and common constraints, the fund aims to standardize approaches to climate project preparation and ensure private capital can move at the scale needed.
For the SBA, the initiative marks the start of a sector-wide learning curve. While Somalia’s banks are accustomed to financing trade and working capital, climate-linked lending often requires different underwriting assumptions, longer tenors, technical performance indicators, and collaboration with public and development actors to mitigate risk. Building a common vocabulary — what counts as climate-resilient, how outcomes are tracked, and which risks need public co-financing — is essential to avoid fragmentation.
The UK-supported Pioneer Country Trials program adds a layer of practical support by targeting bottlenecks that frequently stall climate finance: project preparation capacity, credit risk concerns, and limited access to concessional or catalytic capital. Its focus on coordinated approaches is meant to reduce duplication and bring national institutions, including banks, into earlier phases of project design.
Taken together, Sunday’s training and the broader technical assistance effort reflect a pragmatic shift in Somalia’s approach to climate action. Rather than treating climate finance as an external process, the program envisions Somali banks as central actors capable of originating and delivering projects that strengthen resilience where it is most needed — in farms, markets, clinics, and neighborhoods across the country.
As follow-on steps, participants and organizers signaled the importance of sustained capacity building; closer alignment between banks, the NCF and public agencies on priority pipelines; and continued engagement with international partners to expand deal flow. The aim is to ensure that as global climate funds grow, Somalia’s financial system is ready to compete for resources and convert them into tangible community-level benefits.
The training’s emphasis on practical pathways — from understanding fund operations to channeling credit to bank clients — suggests an increasingly confident private sector ready to make climate resilience part of mainstream banking. If that momentum holds, the first-ever climate finance workshop in Mogadishu could be the opening move in a broader effort to translate climate risk into investable opportunity, anchored in Somali institutions.
By Ali Musa
Axadle Times international–Monitoring.
