On May 29, 2025, the African Development Bank (AfDB) launched the Africa Carbon Support Facility (ACSF) at its Annual Meetings in Abidjan, Côte d’Ivoire, to scale carbon market investments across Africa. Aligned with the African Union’s Carbon Market Strategy, the ACSF targets 300 million high-integrity carbon credits annually by 2030, unlocking $1.5-$15 billion in climate finance, according to the Africa Carbon Markets Initiative (ACMI). Built on five pillars—de-risking supply, stimulating demand, building infrastructure, strengthening policy, and attracting private capital—it channels 30-50% of revenues to communities. With Africa receiving just 1% of global climate finance despite severe climate impacts, can the ACSF redefine carbon markets, or will pricing and regulatory challenges persist?

ACSF Framework and Objectives

• Strategic Pillars:

• De-risking Supply: Funds reforestation, clean cookstoves, and renewable energy projects with grants and technical aid.

• Stimulating Demand: Prioritizes compliance markets ($20-$50/t credits) over voluntary ($2-$5/t), according to AfDB’s Anthony Nyong.

• Market Infrastructure: Enables trading on African stock exchanges, like Kenya’s planned platform, to boost liquidity.

• Policy Ecosystems: Supports transparent regulations, such as Nigeria’s carbon registry.

• Private Capital: Aims to attract $1 billion by 2030 through risk-sharing mechanisms.

• Community Benefits: Directs 30-50% of revenues to local communities, addressing equity concerns, as emphasized by UNECA’s Hanan Morsy.

• Initial Funding: Backed by AfDB’s $1 million FAPA grant, with $500 million planned through blended finance.

“This is where financing meets Africa’s future,” said AfDB’s Kevin Kariuki. Nyong added, “Africa can lead with high-integrity carbon credits.”

Read more: IFRS S2 Q&A Clarifies GHG Emissions Disclosure Rules

Strategic Context

The ACSF aligns with global climate initiatives:

• Swiss Glacier Collapse: 1.5°C warming amplifies Africa’s climate risks, like Madagascar’s $2 billion cyclone damages in 2024.

• SkyNRG’s SAF Investment: Decarbonizing aviation complements ACSF’s clean energy focus.

• Meta’s Carbon Credits: High-integrity credits mirror ACSF’s standards.

• IFRS S2 Disclosures: Verifiable credits support Scope 3 emissions reporting.

Challenges and Risks

• Low Credit Prices: Voluntary market credits at $2-$5/t limit revenue compared to $20-$50/t in compliance markets, according to Carbon Pulse.

• Regulatory Gaps: Only 10 African countries have carbon market frameworks, risking integrity, according to UNDP.

• Community Concerns: Past projects, like Uganda’s Green Resources, caused land disputes affecting 10,000 people, according to Mongabay.

• Policy Risks: U.S. deregulation, such as $1.5 billion Army Corps cuts, may reduce global climate finance, impacting 20% of ACSF’s funding pipeline.

Explore OneStop ESG Marketplace: Carbon offset services

What’s Next?

The ACSF will launch in Q1 2026, supporting 50 projects by 2027 to generate 50 million credits, valued at $250 million at $5/t. Kenya, Nigeria, and Gabon target 100 million credits by 2030, according to ACMI. A $100 million training fund will prepare 1,000 regulators across 20 countries by 2026. AfDB’s $500 million program could drive $2 billion in climate investments by 2030. Global carbon markets may reach $250 billion by 2050.

“Africa is ready to lead,” said ACMI’s Paul Muthaura.

With 36 Gt CO2 emitted globally in 2024, ACSF’s credits could bridge Africa’s $100 billion climate finance gap. Will it empower communities, or face scalability limits?

Explore ESG Solutions on our marketplace - OneStop ESG Marketplace.

Keep abreast of the top ESG Events on OneStop ESG Events.

OneStop ESG Educate: Your go-to source for top ESG courses and training programs tailored to your needs.