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Harnessing carbon to protect African forests

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WhyAfrica has come across many activities in remote parts of Africa during our annual WhyAfrica Road Trips that raises red flags about the potential environmental and community impacts.

Harnessing carbon to protect African forests  

An innovative carbon financing solution will enable the expansion of clean energy and forest protection across Africa.

In Africa, more than 900 million people cook with polluting fuels like charcoal, resulting in deforestation and deaths from household air pollution.

These activities also emit greenhouse gases that are similar in scale to the global aviation industry. To solve this problem, a continent-wide energy transition to clean and modern fuels is required.

Yesterday, African corporate and investment Bank, Rand Merchant Bank (RMB), announced a strategic partnership with climate technology company KOKO, where it has acted as the lead mandated arranger and financier for a pioneering carbon financing solution, to further propel KOKO’s climate objectives.

Harnessing carbon to transform African lives

KOKO’s aim is to replace demand for charcoal through supplying more than 1.1 million homes with bioethanol cooking fuel distributed through a dense network of high-tech KOKO Fuel ATMs located in thousands of corner stores across urban Kenya.

The resultant carbon revenues are shared with households as a non-government energy subsidy, enabling even the poorest households to make the change.

According to Phil Norton, Carbon Finance Lead at RMB the deal, which will bring more affordable and lower emissions energy to millions of people in Africa, fits well within RMB’s ambition to build a market leading carbon trading and finance business operating across Africa, serving both existing and new clients.

Concerns about environmental impacts

WhyAfrica has come across many developments and activities in remote parts of Africa during our WhyAfrica Road Trips that raise concerns about its potential environmental and community impacts.

These include activities like charcoal production and deforestation, which contribute to habitat degradation and loss of biodiversity. Another huge problem is over-fishing and the use of gill nets, which deplete fish populations, as well as plastic pollution.

WhyAfrica’s Road trips take place in July and August every year. During our overland trips, we visit projects in four to five African countries. The main aim of our Road Trips is to gather information and data about mineral exploration and mining, agricultural development, tourism potential, the state of infrastructure, water and environmental management, the impact of climate change and development on the environment and communities in the countries that we visit.

Aligning with the Nairobi Declaration

Nigel Beck, Head of Sustainable Finance and ESG Advisory at RMB, says that partnering with KOKO will help develop the African carbon market and will align closely with the Nairobi Declaration, Africa’s recently communicated strategy on using carbon as a mechanism to help finance Africa’s Energy transition.”

The Nairobi Declaration was delivered at the close of the Africa Climate Summit in Kenya in September last year and formed a core part of Africa’s negotiating position at the COP28 climate summit towards the end of last year.

According to Greg Murray, CEO & Co-Founder of KOKO, RMB has demonstrated strong conviction on the opportunity to harness carbon in a manner that transforms the lives of Africa’s citizens. “We’ve been looking for an entrepreneurial banking partner that understands Africa, climate markets and technology. We are proud to embark on this long-term partnership with RMB to help accelerate the expansion of KOKO’s platform across Africa.”

Harnessing carbon to protect African forests

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Harnessing carbon to protect African forests 

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