Carbon credit financing can potentially be a game-changer for Africa’s growing cleantech sector. Vladimir Dugin, a senior partner at E3 Capital, a pan-African venture firm, highlighted the importance of clear regulations from African policymakers to facilitate the adoption of carbon credit financing at the Moonshot by TechCabal event in Lagos.
The Moonshot event revealed that the absence of laws and data is hindering the growth of carbon credit financing in Africa. While there has been a surge in carbon credit financing, it is crucial to address existing gaps to facilitate more widespread adoption and growth.
Carbon credits help businesses subsidise capex in the long run, providing an opportunity for marginal gains.
Michael Olaitan, co-founder of Powernow.
Currently, the global carbon credit market has a valuation of approximately $909 billion. In Africa, the market is projected to reach $82 billion. Organizations like the Africa Carbon Markets Initiative (ACMI) aim to produce 300 million carbon credits annually, potentially generating $6 billion in revenue and creating 30 million jobs by 2030.
While carbon credit initiatives offer potential funding opportunities, Chidalu Onyenso, CEO of Earthbond, advised startups to avoid overreliance on them as their sole source of funding.
Blended financing is key in ensuring that startups do not put their eggs in one basket.
Chidalu Onyenso, CEO of Earthbond
As Africa seeks to capitalize on the carbon credit financing market, fund managers and founders emphasize the need for a regulatory framework and accessible data to attract investors.
