The sustainable loan market is undergoing rapid change, with both challenges and opportunities shaping its future. According to Sustainable Loans Insight 2025 by Environmental Finance, nearly $960 billion in sustainable loans were signed in 2024, but activity slowed in early 2025. Still, the market shows strong signs of resilience and innovation.
In the first half of 2025, sustainable loans totaled $390 billion, an 18% drop compared to the same periods in 2024. However, the second quarter was only 3% lower than the previous year, suggesting momentum is returning. Much of this revival has been driven by sustainability-linked loans (SLLs), which now account for more than 60% of all sustainable loan deals signed this year.
When examining regional trends, Africa’s role deserves particular attention. Between the second half of 2024 and the first half of 2025, African borrowers signed 34 sustainable loans worth $6.05 billion. Though this positions the continent behind Europe, North America, Asia, Oceania, the Middle East, and South America in terms of total value, the diversity of Africa’s deals stands out. From mining and finance in South Africa to logistics and agriculture in Morocco, and from sovereign borrowing in Tanzania to development finance in Togo, the continent’s transactions reveal how sustainable loans are being applied to sectors critical to Africa’s economic and environmental future
Some of the most notable African transactions include Sibanye-Stillwater’s $500 million green loan in South Africa, targeted at the mining and metals sector, and Standard Bank Group’s dual role, with a $500 million sustainability-linked loan and a $250 million green loan. In North Africa, the Tanger Med Port Complex in Morocco raised $400 million through a sustainability-linked loan, while OCP Group, also based in Morocco, secured a $370 million green loan for agriculture and chemicals. Beyond corporates, governments and regional institutions are joining in: Tanzania’s Ministry of Finance signed a $300 million green loan, and the West African Development Bank in Togo raised $390 million through a sustainability loan
These transactions illustrate the breadth of instruments Africa is engaging with. Green loans remain essential for funding renewable energy, sustainable agriculture, and infrastructure. Sustainability-linked loans, while newer to the continent, are particularly promising, as they tie financing to measurable performance outcomes—an important step for sectors like mining, transport, and heavy industry. Finally, sustainability loans that combine environmental and social objectives can support projects such as affordable housing, SME financing, and climate-resilient infrastructure, aligning directly with Africa’s development priorities.
Read also: Africa’s green finance window widens as sustainability-linked loans gain global credibility
When set against the global picture, the contrast is striking. Europe leads the sustainable loans market, with $384 billion raised from nearly 600 loans. North America follows with $298 billion, though its average loan size is far larger than Africa’s, reflecting the maturity of its markets. Asia, meanwhile, signed 346 loans with a combined value of $99 billion, showing the breadth of activity but at lower average deal sizes. Oceania, the Middle East, and South America each recorded higher issuance than Africa but without the same mix of sovereign, development, and corporate borrowers that characterize Africa’s emerging markets.
Still, Africa’s trajectory cannot be underestimated. The continent is among the most climate-vulnerable regions in the world, and sustainable loans are beginning to address this reality directly. Tanzania’s sovereign loan demonstrates that governments may increasingly turn to sustainability finance to plug infrastructure and climate adaptation gaps, while the West African Development Bank’s deal shows how regional lenders can channel funds into projects with both environmental and social impact.
Globally, the market is also undergoing structural shifts. Following 2024’s record issuance, volumes dipped in 2025, but the growing dominance of sustainability-linked loans shows how the market is evolving toward accountability and performance. Regulators are tightening oversight: Japan has issued stricter guidance, and the UK reports that loan quality has improved since raising concerns two years ago. Innovation is also accelerating, with Sustainability-Linked Loan Bonds (SLLBs) and the upcoming Transition Loan Principles expected to reshape the market. These transition loans, in particular, could offer financing pathways for high-emitting sectors that need gradual but credible shifts toward net zero.
For Africa, the lesson is clear. Green loans should remain the cornerstone of financing renewable energy, agriculture, and climate-resilient infrastructure. Sustainability-linked loans need to expand, particularly in sectors where performance targets can reassure global investors and raise credibility. Sustainability loans, with their broader mandates, will be vital for governments and development banks tackling social priorities alongside climate goals.
The story of sustainable loans in 2025 is therefore not one of decline but of evolution. Global issuance may have slowed, yet innovation and accountability are redefining the space. Africa, while smaller in scale, is proving that sustainable finance can be diverse, impact-driven, and closely tied to development realities. In a market that is still finding its shape, Africa’s emerging role offers both lessons and opportunities for the years ahead.
Sources
All data and insights are drawn from Sustainable Loans Insight 2025 by Environmental Finance
