Companies to collaborate on carbon credit sales for African off-grid

5 Apr 2023
Companies to collaborate on carbon credit sales for African off-grid

ENGIE and CarbonClear partner to expand off-grid clean energy sector in Africa through voluntary carbon market, deploying innovative digital model to certify carbon offsets generated by ENGIE solar kits; making carbon markets into climate financing sources in Africa

ENGIE has signed a partnership agreement with CarbonClear, a carbon offset certification company, to raise financing for sustainable development and clean energy projects in Africa. ENGIE’s Global Energy Management & Sales (GEMS) and CarbonClear will work together to issue and sell carbon credits that will increase financing for the off-grid clean energy sector.

The new agreement was described in an announcement from ENGIE last week.

“Thanks to increasing traditional and, in this specific case, alternative funding means we will meet our target to impact 20 million people by 2025,” said Gillian-Alexandre Huart, CEO of ENGIE Energy Access.

According to Steven Fleurus, ENGIE’s Head of Finance, “We are… excited that the partnership with CarbonClear will enable us to mobilize additional climate finance and accelerate our growth.”

Under the agreement, CarbonClear will use its innovative digital model to certify carbon offset generated by ENGIE’s solar kits and off-grid projects across Africa. ENGIE GEMS will then sell the credits to organizations looking to offset their carbon footprints. The partnership is targeting the issuance of 500,000 tCO2e of offsets.

CarbonClear will integrate its software with ENGIE’s PAYG monitoring software, MySolGo, to create Micro Carbon Avoidances (MCAs). The MCAs will then be sold to corporate buyers aiming to offset their CO2 footprint.

“By scaling CarbonClear’s proven data-driven model, this partnership will provide measurable carbon finance to impactful solar off-grid deployments throughout the marginalised areas of the world where ENGIE Energy Access operates,” said Karim Jabbar, CarbonClear’s CEO and co-founder.  

Both companies noted in the press release that the carbon calculations used are based on the established UN Clean Development Mechanism (CDM) methodology, and are third-party verified by Det Norske Veritas, DNV.

Expanding offsets in Africa

CarbonClear’s model is suited to capturing offsets from sectors that currently lack access to the carbon market. The company believes that this will help to address the $31bn per year financing gap the IEA says is needed to meet global universal energy access targets by the end of the decade.

Carbon markets are increasingly becoming important climate financing sources in Africa following the launch of the Africa Carbon Markets Initiative (ACMI) at COP27 last year. The initiative reports that African countries are not taking advantage of the voluntary carbon markets to deliver climate finance despite the market growing at a faster pace than global markets. Only five countries (Kenya, Zimbabwe, DRC, Ethiopia, Uganda) account for nearly 65 percent of credits issued over the past 5 years.

There is huge potential for voluntary carbon markets in Africa, especially in countries with sizeable sustainable development projects. For instance, Nigeria could mobilize between $0.6bn to $0.8bn by growing its voluntary carbon credit market to 30-40 MtCO2e by 2030.

Energy & Utilities reported last week that three West African countries closed agreements for utility-scale solar projects up to 70 MW.

Image credit: Engie

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