The African continent has hosted many successful Clean Development Mechanism (CDM) projects, otherwise known as green projects, which has stimulated interest for future development. However, African countries face a few hurdles in implementing going green projects, largely due to lack of funding from local and international investors. A green project can range from providing communities with LED lights to large scale sustainable electricity projects.
The Kyoto Protocol states that any green project must be registered under the Clean Development Mechanism (CDM) of the United Nations Framework Convention on Climate Change. Compared to other emerging markets, Africa in general has a low rate of registering green projects and accounts for only 3% of registered CDM projects. Firstly, the cost of registration is high and furthermore, the use of carbon credits for the funding of green projects is not fully understood in Africa.
Securing Investment in Africa is a constant battle and it’s estimated that an annual $27 billion is needed to develop sustainable energy sources in Africa by 2030. The good news is that the initiative is there and there are a few companies currently contributing to green project funding. Standard Bank has facilitated green project funding to various African countries, from donating eco friendly cooking stoves in Burkina Faso, helping set up urban composting in Mozambique, distributing solar heating systems in Mauritius and finally funding the Lake Turkana project- a sustainable energy solution that uses hydro energy and wind energy.
Furthermore, standard Bank and the German government fund the African Carbon Asset Development (ACAD) partnership, led by the UN Environmental Programme, that has completed phase one of green project funding to fourteen individual projects across Africa. ACAD serves to assist companies in gaining funding for their green project ideas, as procedures are complex and require the knowledge of experienced professionals for negotiations and closure.
Besides benefiting the environment, going green projects can provide employment opportunities and up skilling in previously disadvantaged African communities and offer great business opportunities, from installing solar panels to green project management. Therefore the continent can only benefit from green project initiatives.