Approval of the National Climate Finance Strategy 2025–2034

On 6 November 2025, the Council of Ministers approved, through Resolution No. 37/2025, the National Climate Finance Strategy (“NCFS”) 2025–2034. The NCFS is an instrument that aims to define Mozambique's commitment to developing actions for the mobilization, efficient and transparent use of climate change financing.

The resolution marks a significant step forward in consolidating public policies that seek to ensure sustainable and resilient economic development, in line with the National Development Strategy (ENDE 2025–2044) and the country's international commitments under the Paris Agreement.

1.     Objective of the NCFS

The NCFS is based on the vision of making Mozambique a benchmark in terms of mobilizing and applying financial resources for climate action. This vision reflects the desire to strengthen national resilience and improve the capacity to respond to climate impacts, while promoting sustainable economic development.

To bring this vision to life, NCFS guides the state, the private sector, academia, financial institutions and civil society organizations towards practices that strengthen the adaptation of communities and infrastructure, reduce vulnerabilities and contribute to mitigation of emissions. The central idea is to create a coordinated approach, where each actor plays a clear role in building a more resilient country.

NCFS's mission is to establish a coherent framework for mobilizing, managing and applying climate finance, ensuring that these resources are used transparently and in line with national priorities.

The overall objective is to guide the various key actors in mobilizing climate finance, with a view to increasing financial resources and ensuring transparency and efficiency in the allocation of resources for climate action.

Taken together, the vision, mission and overall objective of the NCFS seek to ensure that climate finance in Mozambique is no longer just a response to emergencies but becomes an instrument for long-term planning and transformation.

2.     Main Lines of Action

The NCFS is organized into five complementary structural areas.

The first relates to reforming the legal framework with a view to creating a regulatory environment conducive to climate finance in both the public and private sectors. To this end, the NCFS establishes the need to integrate climate concerns into all sectoral regulatory instruments, institutionalize green procurement, create a national taxonomy that clearly identifies investments considered green or transitional, and create a Mozambique Climate Fund.

The second area relates to reforming the tax system by introducing climate change elements into the tax system with a view to mobilizing national resources, strengthening green taxation and budgeting practices. It also includes a commitment to strengthen the Disaster Management Fund, with greater decentralization and efficiency in disaster response.

The third area focuses on the financial system, seeking to reorient it to support sustainable investments. The NCFS provides for the development of a national roadmap for inclusive green finance, the creation of regulatory conditions for instruments such as green bonds and forecast-based financing, and the development of a dynamic climate insurance market, with a special focus on the agricultural sector and vulnerable communities.

The fourth area is dedicated to strengthening national capacities, which includes technical and institutional training, the creation of knowledge-sharing platforms, and the strengthening of local planning capacity. This aspect recognizes that without prepared and qualified institutions, access to climate funds will remain limited and inefficient.

Finally, the fifth area focuses on expanding access to climate finance, proposing a clear and inclusive model of coordination, as well as strengthening the conditions necessary for the development of carbon markets, debt-for-climate initiatives and robust mechanisms for monitoring, reporting and verifying the climate support received and required.

3.     Priority Financial Instruments

The NCFS identifies five instruments with the greatest potential to accelerate resource mobilization:

       i.          Donations: these are one of the main sources of climate finance for Mozambique and, according to the NCFS, are crucial for resilience, adaptation and institutional strengthening actions, especially in sectors such as agriculture, disaster risk management and social infrastructure.

      ii.          Debt-for-climate swaps: these involve converting external debt into financing for climate actions. According to the NCFS, this instrument has the potential to reduce debt pressures and finance projects of public interest, when implemented under clear rules and with strong monitoring.

    iii.          Climate risk insurance: this is a financial product designed to protect against losses resulting from climate events. It is a form of risk transfer that allows losses from natural disasters not to put pressure on the State Budget.

    iv.          Forecast-based financing: this is described as an innovative approach that triggers resources before an extreme event occurs, based on weather forecasts and risk indicators. The NCFS presents it as a way to reduce human and material losses, as it allows for the financing of anticipatory actions such as evacuations, infrastructure reinforcement, or the pre-positioning of essential goods.

      v.         Carbon credits: these are market-based instruments that allow companies to offset their emissions by investing in emission reduction projects elsewhere. NCFS considers Mozambique to be one of the African countries with the greatest capacity to generate credits based on conservation and sustainable use of natural resources.

4.     Implementation, Monitoring and Evaluation

To coordinate the implementation, monitoring and evaluation of the NCFS, a Technical Coordination Council will be set up, which will be led by the Ministry of Planning and Development, through the National Climate Finance Directorate.

Two evaluations are planned: an interim evaluation after five years and a final evaluation in 2034. This periodic review mechanism ensures that the Strategy adapts to the national and international context, especially considering the evolution of global regulatory requirements and the increase in climate risks.

5.     Impact on Businesses, Financial Institutions, and the Public Sector

The entry into force of the NCFS is expected to have a significant impact on the private sector and financial institutions as the country moves towards a new framework of regulatory requirements related to sustainability. Companies exposed to physical and transition risks, particularly in the extractive, agricultural, energy and industrial sectors, should be alert to the opportunities and obligations that may arise.

In the financial sector, the involvement of the Bank of Mozambique and the integration of climate risks into prudential supervision reinforce the need to adopt environmental and social risk management practices in line with international standards.

For the public sector, the NCFS requires greater coordination between institutions and a gradual reform of budgetary processes to ensure that resources are used efficiently, transparently and in line with national climate priorities.

6.     Final Considerations

Resolution No. 37/2025 represents a decisive step in consolidating the foundations for financing climate transition in Mozambique. The National Climate Finance Strategy 2025-2034 puts the country on a path towards greater predictability, transparency and alignment with global requirements, creating a more favorable environment for attracting sustainable investment and strengthening community resilience.

The success of the NCFS will depend on the country's ability to operationalize the planned instruments, strengthen inter-institutional coordination and ensure that the private sector actively participates in the green economic transformation.

7.     Entry into Force

The Resolution approving the NCFS entered into force on the date of its publication.

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