Cape Initiative Aims to Close $598 Billion to $824 Billion Funding Gap in Africa's Carbon Markets

The Carbon Accelerator Programme for the Environment (Cape) is poised to play a pivotal role in addressing the substantial funding deficit that hampers Africa's carbon markets, which stands between $598 billion and $824 billion. Recognizing that 62 percent of the continent's GDP is dependent on natural capital, Cape seeks to build confidence in these markets by prioritizing integrity projects that foster strong biodiversity outcomes and are underpinned by rigorous carbon methodologies.

Reshma Shah, the carbon markets lead at FSD Africa, emphasized that Africa's natural capital is not merely a response to the climate crisis but a powerful catalyst for confronting interconnected global challenges while promoting fair and inclusive growth. The projects under Cape are designed to transcend the mere generation of carbon credits; they serve as blueprints for redefining global investment in and valuation of nature.

One notable initiative is the Gashaka Gumti forest carbon project, spearheaded by the Africa Nature Investors (ANI) Foundation and Africa Carbon Partners. As Nigeria's largest and most biodiverse park, Gashaka Gumti encompasses 600,000 hectares and houses one of West Africa's last remaining montane rainforests.

This project employs assisted natural regeneration techniques to safeguard vital ecosystems and species, including chimpanzees and pangolins, while targeting the removal of 12 million tonnes of carbon emissions. A dedicated endowment fund ensures that community and biodiversity benefits are secured, thus alleviating pressures on the park through collaboration with local communities.

Chosen for its scalability and replicability, the Gashaka Gumti project stands as Nigeria's first endorsed nature-based carbon initiative, setting a benchmark for best practices in the country's burgeoning carbon market. Tunde Morakinyo, executive director of the ANI Foundation, highlighted their collaboration with the Nigerian National Park Service on projects that directly benefit local communities, such as school rehabilitation, scholarships, and financial support for women-led SMEs focused on agricultural processing.

Additional initiatives include assistance for farmers in beekeeping, agroforestry, and sustainable pastoralism. This multifaceted support is critical, yet it has historically relied on philanthropy, which may not be sustainable. The project aims to unlock ongoing financing through the park's ecosystem services, thereby amplifying the benefits to local communities engaged in forest conservation.

Cape has selected the Gashaka Gumti project from over 100 applicants across 28 African nations as one of four projects in its inaugural cohort to receive feasibility and development support. Funded by FSD Africa, Cape mobilizes investments into nature-based carbon projects aimed at reducing emissions, enhancing carbon sequestration, protecting biodiversity, and delivering tangible benefits to local communities.

The initial four projects supported by Cape—including initiatives in Nigeria, Kenya, Tanzania, and Zambia—represent a diverse array of carbon market strategies. They were chosen based on their development stage, social and environmental impact potential, alignment with investor preferences, and replicability.

Launched in November 2024 in partnership with the African Natural Capital Alliance and Finance Earth, Cape's mission is to fill the early-stage funding gap for nature-based carbon projects across the continent. Its partners believe that leveraging Africa's natural resources presents a significant opportunity to enhance local livelihoods, conserve irreplaceable biodiversity, and bolster climate resilience.