Jennifer Lee Morgan, inaugural state secretary of Germany and special envoy for International Climate Action, is spearheading a  shift in global financial structures to facilitate a sustainable transition towards a green economy. As a leading advocate for meeting the loss and damage demands of emerging economies, she played a role at CoP27, laying the groundwork for its establishment. Drawing from her tenure as the former executive director of Greenpeace, Jennifer advocates for the simultaneous pursuit of development goals and decarbonisation. Recognising the crucial role of global financial institutions, she underscores the necessity of aiding debt-burdened emerging economies with limited fiscal capacities in achieving a just transition towards sustainability. Jennifer calls for innovative financing mechanisms and the expansion of climate debt and nature swaps for these nations.

The global energy crisis triggered by the war in Europe, Germany decided to phase out 55pc of its Russian gas imports, with a quest for alternative energy sources. African nations have emerged as promising partners to diversify their renewable energy portfolio. Green hydrogen initiatives in Kenya, propelled by the Accelerated Partnership for Renewables in Africa (APRA), offer platforms for collaboration between German enterprises and local governments. Jennifer argues establishing an ethical supply chain for critical rare earth minerals such as cobalt and lithium, pivotal for the electric vehicle industry's battery production.

In an exclusive interview with Munir Shemsu, our deputy editor-in-chief, Jennifer articulated her vision for the evolution of global climate finance to address the urgent ramifications of the climate crisis.

Fortune: What are the biggest challenges in achieving global climate goals?

Jennifer Lee: Financing is a major hurdle, especially for developing countries that need substantial investments to transition to green economies. Developed countries must fulfil their commitments to provide climate finance and support innovative financing mechanisms. Political will is also crucial; leaders must prioritise climate action and implement policies that drive the transition. Lastly, technology transfer and capacity building are vital.

Q: Do you see climate finance evolving to meet the needs of emerging and vulnerable economies in Africa?

We need to rethink climate finance entirely. Trillions will be needed for a greener economy and to address loss and damage. International financial institutions must help build resilient economies, address debt pressures, and facilitate private sector participation in infrastructure. Developed countries must continue providing public finance focused on adaptation, but we also need innovative financing mechanisms to reduce capital costs. It is challenging but all these aspects must be tackled together.

Q: How would you rate the current progress?

There is a noticeable shift towards climate finance as the benefits of transitioning to a low-carbon economy become clear. Ensuring finance reaches vulnerable economies is crucial. Currently, only three countries dominate renewable finance access. We need to change that.

Q: Ethiopia recently banned gas-powered vehicle imports, sparking concerns about infrastructure adequacy. How should climate finance be spent—on renewable infrastructure or fortifying existing networks?

Everything must be done simultaneously. Transforming transportation is crucial, especially for countries with renewable energy potential. Germany can share expertise in transitioning infrastructure. Emerging economies have the opportunity to build infrastructure from the start, considering both renewable expansion and resilience against climate impacts.

Q: How will Accelerated Partnership for Renewables in Africa (APRA) assist with constructing renewable infrastructure?

It supports bottom-up workshops where countries develop their roadmaps for 100pc renewable energy infrastructures. It includes policy and financing mechanisms involving private sector participation through Green Group guarantees from Germany. Countries can choose off-grid solutions, mini-grids, or larger systems that best suit their needs and attract necessary financing.

Q: Do you believe renewable energy can be achieved in Africa?

I see a bright future. The continent has vast renewable resources, including solar, wind, and hydro, which can be harnessed to meet its energy needs and contribute to global energy security.

Q: What role will Germany play in the future?

Germany will continue to play a supportive role through initiatives like APRA. We will provide technical expertise, financial support, and policy guidance to help African countries develop their renewable energy sectors. The goal is to create sustainable, resilient energy systems that not only power economies but also create jobs, improve living standards, and reduce environmental impacts.

Q: What policy environments do German companies seek for renewable energy investments in Africa?

German companies need stable, long-term policy frameworks for renewable projects. They seek environments conducive to foreign investment, with clear legal terms, security, and low corruption. Accelerated Partnership for Renewables in Africa (APRA) aims to scale up renewable projects in Ethiopia and Kenya. We are working on green guarantees to lower capital costs, as building renewables in Africa is eight times more expensive than in Europe due to perceived risks.

Q: What standards does Germany consider to ensure critical minerals are sourced ethically?