Africa: 10 ways nature-based carbon markets are gaining traction

Africa’s nature-based carbon markets is at an early stage, but programmes are lowering barriers and increasing project readiness

Africa is increasingly turning to nature-based carbon markets to attract climate finance, develop sustainable land use and support community-led conservation projects. 

New initiatives are advancing projects, building market infrastructure and drawing corporate and investor interest across the continent.

Key developments shaping nature-based carbon markets in Africa include:

1. CAPE launched to unlock investment

The Carbon Accelerator Programme for the Environment (CAPE), led by FSD Africa with partners Finance Earth and the African Natural Capital Alliance (ANCA), aims to catalyse investment into nature-based carbon and biodiversity projects across Africa. The programme aims to address gaps in financing and confidence that have limited project development.

2. Four projects selected for first cohort

CAPE has selected its first cohort of nature-based carbon projects in Kenya, Nigeria, Tanzania and Zambia, covering more than a million hectares of land. These initiatives span forest regeneration, rangeland rehabilitation and mangrove restoration, aiming to deliver carbon sequestration as well as social and environmental benefits.

3. Community-based carbon outcomes emphasised

Selected projects seek to combine carbon credit generation with biodiversity protection and community livelihoods – for example, the Papariko Mangroves project in Kenya supports coastal ecosystem restoration and income opportunities for vulnerable communities.

4. Ugandan forestry deal signals corporate demand

A Ugandan smallholder forestry programme has secured a deal to supply two million carbon removal credits to Microsoft over the next decade, linking forest restoration with structured corporate climate commitments and revenue for farmers.

5. Carbon markets seen as continent’s climate finance lever

Africa’s natural carbon sinks – including forests and rangelands – position the region to generate high-integrity credits that can mobilise investment for climate, jobs and sustainable development, although market and regulatory barriers remain.

6. Projects move toward investment readiness

CAPE provides project development and transaction advisory support to help nature-based carbon initiatives become financially viable and attractive to investors, addressing early-stage barriers that have constrained market growth.

7. Focus on biodiversity and carbon links

The programme encourages projects that deliver verified carbon credits and biodiversity benefits, seeking to align climate mitigation with ecosystem conservation and community upliftment.

8. Market tools are emerging

Open-source “living labs” and shared best practice resources are being developed under CAPE to help project developers learn from peers and replicate successful approaches across different landscapes.

9. South Africa builds governance frameworks

South Africa is developing a Draft Carbon Markets Framework to create an enabling environment for credible, transparent and inclusive carbon market activity, including for nature-based credits.

10. Investor partnerships aim to scale projects

Partnerships between governments, development finance entities and private firms are emerging to fund early-stage carbon projects, helping expand the pipeline of investable nature-based initiatives across the continent.

While Africa’s nature-based carbon markets remain at an early stage, it is widely acknowledged that efforts by CAPE and other programmes are lowering barriers and increasing project readiness. 

Also, corporate off-take agreements and evolving governance frameworks suggest growing confidence among investors and buyers, but scaling will depend on robust standards, transparent benefit sharing and sustained capital flows. 

Cover photo:  masitta©123rf