AfDB Eyes Carbon Trading Reform with New Support Facility

Aiming to unlock Africa’s climate finance potential through policy and market infrastructure the African Development Bank (AfDB) is developing a new support facility. This facility is designed to catalyze Africa’s participation in global carbon markets—an underutilized sector with growing investor interest.

The proposed Africa Carbon Support Facility will have two core functions: assisting governments in creating regulatory frameworks for carbon trading, and strengthening the underlying market infrastructure to boost supply and demand for credits. These steps are expected to lay the groundwork for long-term investor confidence and greater private sector involvement in carbon markets across the continent.

“We envision a future where carbon credits can become a tradable commodity on Africa’s stock exchanges,” said Anthony Nyong, AfDB’s Director for Climate Change and Green Growth.

Untapped Value in Africa’s Carbon Economy

Africa accounts for only a fraction of global carbon trading activity, despite its vast potential in forestry, agriculture, and land-use projects that reduce emissions. Many African carbon credits are currently traded in voluntary markets at prices significantly lower than regulated markets in Europe or North America.

By formalizing these markets and integrating them with financial systems—such as stock exchanges—the AfDB hopes to unlock higher valuations and greater liquidity for carbon credit projects.

Creating Incentives for Private Investment

For investors, this facility signals a growing alignment between climate goals and financial innovation. If successful, it could help de-risk private capital flows into clean energy, conservation, and climate-smart agriculture, turning carbon credits into a viable asset class in African capital markets.

The facility builds on momentum from the African Carbon Market Initiative (ACMI), launched at COP27, which aims to scale the continent’s carbon credit output to 300 million credits annually by 2030—and 1.5 billion by 2050.

Financing the Green Transition

Despite contributing the least to global greenhouse gas emissions, African countries remain among the most vulnerable to climate shocks. Yet they receive less than 1% of global annual climate finance. The AfDB’s facility represents an effort to shift that imbalance by creating market-led pathways for financing Africa’s energy and environmental future.