Africa Advances Carbon Market Strategy to Boost Finance

Africa is rapidly emerging as a leader in the global carbon market, with a bold new initiative designed to scale and de-risk carbon investments while ensuring local communities reap the benefits. The continent’s ambitions took a significant step forward with the official launch of the Africa Carbon Support Facility (ACSF) at the African Development Bank Group’s high-level dialogue on De-risking and Scaling Carbon Market Investments in Africa, held during the Bank’s 2025 Annual Meetings in Abidjan, Côte d’Ivoire.

Dr. Kevin Kariuki, Vice President for Power, Energy, Climate, and Green Growth at the African Development Bank, set the stage for the initiative, declaring the forum as “a space where ideas meet action, principles meet policy, and financing meets Africa’s future.” His words underscored the urgency and depth of commitment behind Africa’s carbon market ambitions.

The ACSF is aligned with the African Union’s broader Carbon Market Strategy and is built upon five foundational pillars: de-risking carbon credit supply, stimulating market demand, building resilient market infrastructure, strengthening the policy ecosystem, and attracting private sector capital. This multifaceted approach is designed not only to catalyze investment but also to foster high-integrity, verifiable carbon markets that unlock billions in climate finance.

A key aspect of the ACSF’s strategy is equity. The initiative emphasizes that carbon finance must serve African communities directly. By ensuring that revenue from carbon markets flows back into local economies, Africa is positioning itself as a continent that leads with both innovation and inclusion. “The goal is to unlock billions in climate finance while ensuring benefits are felt by African communities,” Kariuki reiterated.

The sense of urgency was further highlighted by leaders such as Ibrahima Cheikh Diong, Executive Director of the Fund for Responding to Loss and Damage. He pointed out the human dimension of climate change, especially in vulnerable regions like Madagascar. “When global emissions are reduced, there is less loss and damage,” he said, stressing the need for institutions to work together. “We must promote complementarity; no single institution can do everything.”

Paul Muthaura, CEO of the Africa Carbon Markets Initiative, echoed this call for collective action, emphasizing that Africa’s carbon finance future relies on scalable solutions and robust partnerships. As climate-related risks intensify globally, the continent is choosing a strategic path forward, one that integrates financial resilience with environmental responsibility.

A pivotal panel discussion, moderated by Solomon Quaynor, Vice President at the African Development Bank, brought together voices from leading institutions including the Development Bank of Southern Africa (DBSA), ARM-Harith, the United Nations Economic Commission for Africa (UNECA), and the Children’s Investment Fund Foundation. The panel focused on the critical role financial institutions must play in shaping a credible carbon market ecosystem. Central to their discussions were the creation of clear and supportive regulatory frameworks, development of smarter risk-sharing tools, and the expansion of local capital markets to ensure sustained growth.

Dr. Hanan Morsy, Chief Economist at UNECA, emphasized the importance of transparency and data reliability in ensuring the credibility of carbon markets. “Development partners need to collaborate to ensure the data needed for verifiable, investible, and trustworthy carbon credits is available and reliable,” she said. She also stressed the importance of equitable income distribution, noting that carbon finance should generate income streams that directly benefit local communities.

The session concluded with unified support for the Africa Carbon Support Facility, hailed as a transformative platform that effectively bridges the gap between policy, capital, and community impact. There was widespread consensus that Africa is no longer a passive participant in the global carbon economy; it is asserting itself as a frontrunner with a vision that is both ambitious and equitable.

As the world grapples with the dual challenges of climate change and sustainable development, Africa’s strategic approach offers a blueprint for how emerging markets can lead from the front. With finance, trust, and community empowerment at its core, the continent’s carbon market strategy marks a turning point in global climate finance—placing Africa not at the periphery, but firmly at the center of the transition to a low-carbon future.