Sustainable Finance

Kenya to Establish Its First Carbon Exchange Through Partnership

Published on: 5 July 2022 12:32 PM
by KnowESG
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The Nairobi International Finance Centre and the Nairobi Stock Market have signed a Memorandum of Understanding with the AirCarbon Exchange(ACX) to establish Kenya's first carbon offset exchange.

ACX will sell certified carbon offsets to assist Kenya in financing environmental programmes, such as reforestation and land restoration, so that it may fulfil its climate goals.

The establishment of carbon exchange in conjunction with the Nairobi Securities Exchange's existing green finance capabilities is anticipated to assist corporations and the government in protecting themselves against climate change threats.

Kevin B. Iwanaga, President & COO, AirCarbon Exchange Middle East & Africa, said: "The Carbon Exchange will be an important element in Kenya's sustainable financial ecosystem and will be instrumental in channelling global capital flows into Kenya's high-impact environmental projects such as reforestation, land restoration and new technologies such as DACS and BECCS."

The Centre's anchor client, Prudential PLC, will also be able to increase its earnings by selling carbon credits on the new carbon exchange.

Vincent Rague, chairman of the NIFC, stated that the Centre's choice to prioritise green financing and develop innovative new initiatives such as carbon trading is a clear indication of its confidence in the future.

"Kenya has vast comparative advantages in the carbon offset space - including abundant offset-eligible project potential. Through this exchange, we will be leveraging existing verification models and brokering networks to standardise, regulate, and promote Kenya's existing production of carbon offset activities internationally," said President Uhuru Kenyatta.

According to a recent analysis by McKinsey, the yearly worldwide demand for carbon credits might expand enormously by 2030, reaching between $5 billion and $30 billion.

Source: Market Screener

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