Malawi “Greens” its Financial System
To safeguard its economy against climate risks and unlock green investment, the Reserve Bank of Malawi (RBM) established a dedicated Climate Change Centre in early 2025 — a move informed by earlier work funded by the Partnership Action Fund (PAF) and led by the UNEP Copenhagen Climate Centre (UNEP CCC). Housed within the RBM and formally integrated into its structure, the centre is staffed by two full-time personnel who are now central to national efforts to green the financial system. Their work is part of a broader push to advance regulatory reforms, investment strategies and planning instruments that will help Malawi mobilize and manage climate finance.
This institutional shift builds on a feasibility study and roadmap developed by UNEP CCC in 2024 with PAF funding. The study assessed Malawi’s readiness to green its financial system and proposed a phased approach for reform. Key recommendations included the creation of the centre, capacity building programs, a green taxonomy and risk disclosure protocols. The roadmap was adopted in full and continues to guide the centre’s strategy and implementation timeline.
Since its launch, the Climate Change Centre has helped ensure RBM policies and operations support national climate goals. Its staff have led training across nearly all RBM departments and are integrating climate topics into broader RBM capacity building programs — including modules on green bonds, sustainable finance, environmental, social and governance (ESG) disclosure, climate stress testing and risk regulation. These programs target not only RBM staff but also personnel from financial institutions and government ministries.
Malawi is also putting systems in place to regulate climate finance and engage in international carbon markets. A new Carbon Market Framework, approved by cabinet in 2025, provides regulatory clarity for future carbon transactions. These developments are reinforced by ongoing Article 6 readiness efforts and the operationalization of the national Climate Change Fund, which coordinates and tracks both domestic and international climate finance.
To complement financial system reforms, Malawi is also strengthening its long-term climate planning. With support from United Nations Development Programme (UNDP), the World Bank, the International Renewable Energy Agency (IRENA) and Climate Analytics — mobilized through the NDC Partnership — Malawi is developing its NDC 3.0 and Long-Term Low Emission Development Strategy (LT-LEDS). These instruments will guide sectoral funding proposals and shape long-term decisions on climate finance. Continued efforts to green the financial system and attract investment will help create the conditions needed to finance and implement these plans.
To support coordination on climate finance, the NDC Partnership has deployed an in-country facilitator and climate finance specialist through PAF. Together, they provide technical assistance to a multi-stakeholder expert group that brings together public institutions, development partners, civil society, academia and the private sector. The group strengthens dialogue and helps guide government decisions on climate finance.
These efforts mark major steps toward climate finance readiness. By building the systems, strategies, and regulations needed to connect climate ambition with investment, Malawi is laying the groundwork for a greener financial system and climate-ready future.