Southern Africa already suffers from the effects of climate change, with business-as-usual (BAU) scenarios projecting a rise of 4°C in regional mean temperatures within the 21st century and a significantly increased prevalence of extreme weather events. In light of insufficient adaptation funds and policy frameworks, however, governments in Southern Africa require support from the private sector to strengthen adaptive capacities among the region’s citizens. Adaptation SMEs – enterprises that provide climate change adaptation products and services – can provide this support.

This study examines the characteristics of adaptation SMEs and investigates adaptation market opportunities and challenges that impact these enterprises in the three Southern African countries Botswana, Malawi, and Zambia. Based on our experience with supporting over 1000 eco-inclusive SMEs in 38 countries that are part of the SEED enterprise database and in-depth interviews with eleven aspiring adaptation entrepreneurs across the energy and climate-smart agriculture sectors, the paper finds substantial opportunities for adaptation SMEs to scale and sustainably grow their operations, but also several considerable challenges that threaten adaptation SMEs’ success in Southern Africa.

The report expands the still-nascent body of case study-based literature on adaptation entrepreneurship, and is thus suited for academia and practitioners active in this field. It is the first one to identify opportunities for successful adaptation entrepreneurship as well as barriers to growth and scale in the region. It aims at current and future Southern African adaptation entrepreneurs, potential investors, national financial institutions, and policymakers seeking to support adaptation SMEs. The study, furthermore, urges international players of climate action to consider adaptation entrepreneurship as an important (cost-effective) and sustainable tool for successful climate change adaptation.