States to reap from Sh40b carbon fund

By John Oyuke

The Common Market for Eastern and Southern Africa (Comesa) has finalised setting up of a multi-million shillings financing facility to enable member-states access carbon markets.

The fund, expected to raise Sh40 billion from international donors and sovereign funds, is designed to support small community development projects with early-stage seed capital and Certified Emission Reductions (CER) payments.

Comesa has called for proposals inviting project developers, businesses, financial institutions, governments, municipalities, communities, and individuals in East African Community, Southern African Development Community, and Comesa member-states to submit projects.

Raise capital

Kurt van Duyn, chief executive officer of Aggelos Investment Holdings, a Mauritius-based consultancy, told reporters the firm had been hired by Comesa to set up the fund and raise capital.

Comesa Climate Change Advisor Dr Mclay Kanyangarara, told e-Comesa Newsletter, the fund would ensure that member states, get value for reduced carbon emissions.

He said the fund has been registered in Mauritius and board members are scheduled to meet soon. The fund will be hosted at the Kenya-based Preferential Trade Area (PTA) Bank, Comesa’s financial arm.

Comesa, with its 19-member states and combined population of over 430 million people, is a major market within the African continent, and during the last two years, has taken a leadership role on behalf of its members (and those of the greater African Union), in addressing Africa’s minimal access to the global carbon finance markets.

It has raised the awareness of the plight of its member States in addressing adaptation and mitigation strategies to address the scourge of climate change.

As a result of various rounds of stakeholder meetings, Comesa launched studies to commence the implementation of the fund.

Extend reach

Comesa is, however, not inward looking and would seek to extend its services beyond the bloc. It will also provide East African Community and South African Development Community, as well the neighbouring regions, with access to international carbon finance markets.

According to the e-Comesa bulletin, the Carbon Fund is self-managed and is structured as a collective investment scheme.

A fund manager, together with an Investment Management Committee would be responsible for the day-to-day operations, and would be responsible for all investment decisions and executions.

It would be accountable to a board of directors consisting of Comesa and private sector representatives under the chairmanship of the Secretary General of Comesa.