The African Development Bank (AfDB) has announced plans to establish a major new facility aimed at boosting access to climate finance across Africa through the carbon credit market.
The Africa Carbon Support Facility, unveiled during the bank’s annual meeting in Abidjan, is currently under design and is expected to address long-standing gaps in policy, infrastructure, and participation in global carbon markets.
According to senior AfDB officials, the initiative will operate through two primary components.
The first will assist African governments in crafting effective policies and regulations to govern carbon trading.
The second component will work to expand both the supply and demand of carbon credits, while also strengthening the market infrastructure required to scale their use.
“Through this, we envision a future where carbon credits can become a tradable commodity on Africa’s stock exchanges,” said Anthony Nyong, AfDB’s Director for Climate Change and Green Growth.
Carbon credits have grown into a multibillion-dollar global industry, largely driven by wealthier countries seeking to offset their carbon emissions.
These offsets typically involve funding clean energy initiatives or compensating developing nations for protecting natural ecosystems.
For every metric ton of carbon reduced or removed from the atmosphere, a project can earn one credit.
Countries and companies can then purchase these credits to meet their climate goals.
Despite having vast potential, Africa remains underrepresented in the global carbon credit market.
Most credits generated on the continent, mainly from forestry, land use, and agriculture, are sold in voluntary markets, where prices tend to be significantly lower than in regions with more robust regulations.
According to Nyong, integrating carbon credits into Africa’s stock exchanges could enhance their visibility and value.
“Tapping into Africa’s underused climate assets could transform our role in the global carbon economy,” he said.
Although the continent contributes only a small portion of global greenhouse gas emissions, Africa’s 54 nations are among the most vulnerable to the impacts of climate change.
Yet, the region receives just 1% of annual global climate finance, according to officials from across the continent. Efforts to change this imbalance are gaining momentum.
At the United Nations COP27 climate summit, the African Carbon Market Initiative (ACMI) was launched by a coalition of countries including Kenya, Malawi, Gabon, Nigeria, and Togo.
The initiative set ambitious targets to increase the volume of carbon credits generated in Africa to 300 million annually by 2030, and 1.5 billion by 2050.
