Bartmann is the COO of Vlinder in Kenya, an organisation that restores mangroves to combat climate change, enhance biodiversity and empower communities through fair carbon sharing and sustainable livelihoods.
The project is designed to plant 4.2 million mangrove trees, sequestering approximately 911,660 tCO2e over a 30-year crediting period, with potential extensions.
Vlinder (it means butterfly in Dutch) was one of nearly 60 investment-ready start-ups, projects and some multi-million dollar infrastructure developments looking for financial backing at the Investment Pitches at Africa’s Green Economy Summit (AGES) in Cape Town last week.
The platforms connected high-impact projects with global investors, offering a dynamic platform to engage and foster real-world investment in Africa’s green economy.
The Papariko Mangrove Project in Kenya is one of Vlinder’s flagship initiatives aimed at restoring 1,500 hectares of degraded mangrove ecosystems across Kwale, Kilifi, and Tana River counties.
Pricing nature
Bartmann was also part of AGES’s Carbon Markets Masterclass, sharing key experience and insight into what it takes to successfully run a successful carbon credit project.
“I was excited about the opportunity of pricing nature,” he explained, “83% of global carbon is in the ocean, and mangrove eco-systems remove carbon from the atmosphere at a rate 10 times greater and sequester 3–5 times more carbon than other forests.”
Important learnings in the Papariko project include the following: have at least two local partners and understand that land tenure and carbon rights are different things, understand how to get both. “Kenya is doing a great job in developing the legislation around this,” stated Bartmann.
Gender empowerment is very important in this project said Bartmann: “Women are central to the solution; they are taking leadership roles in managing and implementing the project.” They are using blended finance, and 45% of their carbon credits entail carbon forward contracts.
The risks of a mangrove project like Papariko include conflicts over land rights, fluctuating carbon prices, policy changes, extreme weather and pests or diseases.
On Day 2 of the event, the session on sustainable agri practices also featured some fascinating examples of successful, nature-based sustainable agricultural solutions. [Click here for the highlights of AGES Day 2.]
Fundamentally different
“There are real opportunities in this sector. But many clients think they can do spectacularly well. But if you are going to embark in these kinds of opportunities, you need to upskill yourself,” said Olivia Tuchten, Principal Climate Change Advisor at Promethium Carbon and one of the masterclass facilitators.
“Perhaps business models need to be looked at differently. Project developers need to know that the returns are different than from, for example, mines. This is not mining or retail, it is fundamentally different, although there is money to be made and good stuff to be achieved.”
Tuchten took the masterclass attendees through a detailed roadmap of how to apply and qualify for carbon credits: “Many companies often underestimate the audit process. There are many steps needed to assure integrity, and increasingly there is a proliferation of niche carbon standards.”
Particularly, she explained that “additionality” has to be demonstrated. This means that the emission reductions must be additional to what would have happened without the project ad that the project should go beyond business-as-usual activities.
We need to do things differently
“Nothing compares to the private sector or a market-led approach to climate mitigation,” said Olufunso Somorin, Regional Principal Officer at the African Development Bank (AfDB) in a session on leveraging carbon credits.
“However, Africa is still not maximising its potential. We need to do things differently. One of the challenges is that there are many good project developers who have very good ideas, but they don’t have the resources to jumpstart their idea into an investable project.”
He reminded the audience that only 17 project developers are largely responsible for most of the carbon projects on the continent.
Somorin announced: “The AfDB is creating the African Carbon Support Facility (ACSF), and we are hoping to start off with a $100 million capitalisation.” Among the goals are supporting countries towards market-creating policy shifts, and the bulk of the funds will provide resources to project developers and assist in validation costs.
“The AfDB wants to be able to increase the number of African-owned, African-based and African-led project developments on the ground,” he added.
Where is the private sector?
Common themes during AGES were discussions about derisking not only Africa as an investment destination but also climate finance for the continent, particularly for a sceptical and careful private sector.
During the opening keynote session, Barbara Buchner, Global Managing Director of the Climate Policy Initiative noted that current climate finance covered less than a quarter of what is needed on the continent due to high perceived risk and a lack of bankable projects, adding that only 18% of the money comes from the private sector.
However, on a more hopeful note, during the keynote on the following day, finance giant Sanlam Investments’ CEO Carl Roothman reminded attendees that the current economic climate, which sees so many governments and businesses focus on climate change and green finance, presents a once-in-a-lifetime opportunity for Africa. The company is active in 27 countries on the continent.
“I don’t think you will see in another 150 years the opportunity for access to the global capital and enthusiasm from the rest of the world, to invest in Africa” said Roothman. This enthusiasm, though, does create a responsibility for everyone in Africa, he admonished. Read more.
This is a nascent sector
“Africa has a huge opportunity to monetise the eco-system services that are natural capital systems, but it has got to be bankable” is how Standard Bank’s Lawrence Cole-Morgan, Global Markets: Lead, Carbon Credit Trading explained the careful stance of many banks.
He added that eco-system services such as the Congo basin and biodiversity services are services to the planet that can be monetised. “These natural systems are like infrastructure that we rely on as societies to exist, but as commercial banks we have to do it this within our lane. What we are seeking to do is see how we can fund the upstream production of carbon credits that are a monetisable commodity, a monetisable eco-system service, and fund against them; very much looking like project finance.”
“We are staying in our lane,” he continued, “managing our risks, either through blended finance, insurance or other market mechanisms.” Cole-Morgan added: “This is a nascent sector. If you look back 15 years ago, as banks we were all looking at the renewable sector in the same way. [ ] We learned how to derisk.”
Long-term perspective
“When it comes to developing such projects, it takes a lot of engineering effort to really derisk a project,” said project developer Leon Van Wyk, who is the CEO of Lesedi, a leading African EPCM. He continued: “There is a lot of work to be done between the development stream and the investing stream where the bank needs to provide its ultimate approval. In addition, projects tend to be developed in isolation, and when you look at how many renewable projects are being developed, there is not a lot of regard for grid stability, which needs to be dealt with. Our interconnectivity and grid resilience are not the same as in European markets.”
In addition, van Wyk expressed concern about the short-term nature of many projects seeking carbon credits to off-set their carbon footprint: “It is a quick fix for whatever the problem is that they are facing. And that is not necessarily the right approach in terms of how we solve decarbonisation from a long-term perspective.”
Mixed feelings: data lacking
During question time in a panel discussion on “What is new and what’s next in climate finance?” former World Bank sustainability guru Dr John Roome challenged the experts on what he had heard thus far: “I have very mixed feelings. Will this radically change getting private sector into climate finance? Is this the best we can do?” He asked the panel to name the one thing that they think might make the difference. The panel agreed that the lack of big data in the African climate space was a major gap.
“Very little is invested in data, and countries are unable to account for what they have,” said Shingirirai Savious Mutanga, CSIR research group leader, adding: “for me the answer is data. Then we will have the evidence that we need and won’t struggle to build a pipeline.”
Bianca Gichangi, Regional Lead – Africa at Voluntary Carbon Market Integrity Initiative (VCMI) concurred: “Big data has enabled us to make great strides. We need to prioritise it in the $1.3 trillion that is needed.”
Contact Us
VUKA is the trusted media partner to key professionals, policy makers, suppliers and
manufacturers. We provide unparalleled opportunities for industry-wide connection.
