The United Nations Environment Programme (UNEP) and Standard Bank have launched the Africa Carbon Asset Development (ACAD) facility, a public-private partnership between UNEP and African banks that aims to stimulate the growth of Africa’s carbon market through investor outreach and seed capital.
Standard Bank believes that it has a duty and an interest to build the carbon market in Africa. We are committed to growing carbon literacy amongst bank managers and credit officers not only in our own organisation, but in other banks across the continent. The ACAD facility with UNEP is an example of how Standard Bank is pioneering green financing in Africa through the deployment of local, market specific solutions and partnerships.
While the number of successful African transactions is still small, the potential is enormous.
Africa has a wealth of projects that can access carbon financing yielding real commercial and social returns, according to the UNEP. Africa’s share of the UN regulated carbon credit market has held steady at around 3%. Major factors that stand in the way of narrowing the carbon gap include project developers’ unfamiliarity with carbon projects and lack of expertise. The ACAD facility will play a critical role in providing ‘jump-start’ finance for good projects.
A focus on replicable and sustainable demonstration projects is a cornerstone of ACAD’s strategy. Financial institutions and the investment community look toward concrete success stories of the benefits that carbon finance can bring. By supporting a pool of projects that are innovative and easy to replicate elsewhere, ACAD aims to mobilise greater investment and stimulate similar ventures in Africa, thereby decreasing project development costs.