The African continent has taken a significant step forward in climate finance with the launch of the African Carbon Markets Initiative (ACMI), which aims to unlock the region’s carbon credit potential. The initiative seeks to provide climate finance to African nations, promoting access to clean energy and sustainable development. A recent Memorandum of Understanding (MoU) between the Jospong Group of Companies (JGC) and EKI Energy Services signifies a joint effort to accelerate carbon credit development in Ghana, with the goal of securing $1 billion in carbon credit financing. Kenya and Nigeria are also making strides in developing their carbon credit markets.
ACMI, led by a 13-member steering committee comprising African leaders, chief executives, and industry specialists, aims to expand the continent’s participation in voluntary carbon markets. These markets serve as trading platforms that enable individuals, businesses, and governments to finance projects that contribute to emission reduction. The initiative aims to mobilize up to $100 billion in carbon credits per year by 2050. African carbon markets are growing steadily, with nearly 54 million tonnes of credits issued.
Several African countries, including Kenya and Nigeria, have expressed their intention to collaborate with the market. The projects under consideration include reforestation, renewable energy, carbon-removing agricultural practices, and the implementation of direct air capture technologies. Investors supporting these projects receive carbon credits, which allow them to offset or compensate for their carbon emissions. The African Carbon Markets Initiative sets an ambitious target of generating 300 million new carbon credits annually by 2030, equivalent to the total number of credits issued globally in voluntary carbon markets in 2021.
The partnership between Jospong Group of Companies (JGC) and EKI Energy Services in Ghana represents a major development in scaling carbon markets. EKI will provide essential technical assistance for the successful implementation of the project. The collaboration covers a 5-year period. JGC, a diversified holdings company operating across various sectors, expressed confidence in EKI Energy’s expertise in climate change and identified them as the ideal partner for the venture. EKI Energy, an Indian-based carbon credits developer and supplier, brings over 15 years of experience to the collaboration and aims to create 1 billion carbon credits by 2027 and reach net zero by 2030.
Nigeria has been actively positioning itself in the international carbon market. At the COP27 climate summit in 2022, Ghana signed the first-ever voluntary cooperation involving Internationally Transferred Mitigation Outcomes (ITMOs) with Switzerland. ITMOs, also known as Article 6.2 credits, allow countries to buy or sell carbon credits with other countries. The ITMO project in Ghana focuses on sustainable agriculture to reduce methane emissions. Nigeria has also made progress in establishing a carbon market framework and aims to establish a special committee to draft a national carbon market strategy. President Bola Tinubo highlighted the substantial $2.5 billion opportunity for the country within the African Carbon Markets Initiative. Kenya has also amended its Climate Change Act to regulate carbon markets and establish a Designated National Authority responsible for authorizing participants and maintaining a National Carbon Registry.
The efforts of African nations to tackle climate change challenges through innovative financing are commendable. From Ghana’s $1 billion carbon credit deal with EKI Energy to Kenya and Nigeria’s supportive policies, the continent is making significant strides in driving climate action.