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Zimbabwe formalise a USD 1.5bn deal with UAE’s Blue Carbon to create carbon credits from offsetting projects in the African country involving almost a fifth of its total landmass. The two parties signed a memorandum of understanding (MoU) worth $1.5 billion to fund forest protection and rehabilitation projects. The carbon sequestered of the forests will generate the corresponding amount of carbon credits.
Zimbabwe formalise a USD 1.5bn deal with UAE’s Blue Carbon to create carbon credits from offsetting projects in the African country involving almost a fifth of its total landmass. The two parties signed a memorandum of understanding (MoU) worth $1.5 billion to fund forest protection and rehabilitation projects. The carbon sequestered of the forests will generate the corresponding amount of carbon credits.
Carbon credits are a tradable instrument that allows companies and other entities to compensate for their carbon emissions by financing projects that reduce or remove CO2 from the atmosphere. A credit represents a ton of CO2 removed. Zimbabwe is Blue Carbon’s 4th foray into the African region this 2023. Launched only last year, the nature-based carbon offsets company also has a similar deal with Liberia in March. Their agreement will offset emissions generated from 10% of the West African nation.
Back in February, the Dubai firm also partnered with Zambia and Tanzania to conserve 8 million hectares of forests in each of the African countries. Both agreements are for generating carbon credits that the company will sell on the global carbon markets. Industry projections show that demand for carbon credits for offsetting purposes will grow exponentially. The carbon credit deal with Zimbabwe covers the country’s 150,000 sq. miles of landmass. They believe that the partnership will bring the African nation $1.5 billion in climate finance. With these deals, Blue Carbon earned the right to develop carbon offset projects across 24.5mln hectares of land in Africa. A huge portion of the sale from carbon credits will be for community engagement and the local people.
The Zimbabwean President Emmerson Mnangagwa said that Blue Carbon will engage in reforestation and forest conservation projects. The project is anticipated to close the Government of Zimbabwe’s financing gap to the tune of $200 million while enabling the country to generate high-quality carbon credits for use on the international carbon market.
This agreement with UAE’s firm is a boost for Zimbabwe’s controversial decision in May when it scrapped existing carbon projects. Then it would get 50% of all the revenue from these projects, scaring away investors and worrying developers. But last month, the Zimbabwean government amended its carbon laws, indicating that project developers can keep their total profit share (70%). It will instead keep its 30% share which will go to various stakeholders.
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Zimbabwe has close ties with the UAE, the largest destination for the African country’s exports. On the carbon front, the UAE Carbon Alliance has pledged to buy USD 450 million in carbon credits from the African Carbon Markets Initiative (ACMI) by 2030.
The partnership between companies like Blue Carbon and nations like Zimbabwe contributes significantly to reducing global carbon emissions. It also provides essential funding for climate finance and nature conservation efforts and support for local communities. As demand for carbon credits continues to skyrocket, such collaborations are crucial in the collective efforts to combat climate change.
