The African Development Bank (AfDB) has announced plans to establish a continent-wide carbon markets support facility aimed at mobilising climate finance and increasing the value of African carbon credits. The initiative, unveiled during the bank’s annual meetings in Abidjan on Thursday, comes amid intensifying climate impacts across Africa, including prolonged droughts and severe storms.
Named the Africa Carbon Support Facility, the initiative remains in the design phase and will comprise two key components. The first will assist African governments in developing carbon trading policies and regulatory frameworks, while the second will focus on enhancing both the supply and demand for carbon credits and the market infrastructure needed 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 are generated through projects that reduce or remove emissions, such as afforestation or renewable energy installations. These credits are typically sold on voluntary markets, particularly by African countries, which currently generate most of their credits through forestry, agriculture, and land use. However, trading credits through compliance markets—regulated by emissions targets—could significantly boost their value, with prices often 10 times higher than in voluntary markets, Nyong added.
Despite contributing minimally to global emissions, Africa remains disproportionately affected by climate change. The continent has faced increasingly frequent climate disasters, including devastating tropical storms in Madagascar and Southern Africa, and historic droughts in the Horn of Africa. Yet, it receives only around 1% of global annual climate finance.
“Carbon market development is an imperative for the continent,” said Kevin Kariuki, AfDB Vice President for Power, Energy, Climate Change and Green Growth.
The announcement coincided with the election of former Mauritanian Finance Minister Sidi Ould Tah as the new AfDB president.
