The Carbon Value Exchange (Cavex) has secured Sh905.15 million ($6 million) in seed capital to scale its digital carbon financing platform.
The transaction was led by E3 Capital, a Nairobi-based investor in early-stage businesses and FSD Africa Investment to help Cavex's existing and future portfolio companies access carbon markets.
The platform will connect buyers of carbon credits with projects from the Global South by leveraging digital tech to enable validation of the integrity of project data, introduce visibility and traceability in project activities, and increase pricing transparency.
“This investment will help us prove how digital technology can open up climate finance for many people, communities and projects that are displacing or removing carbon,” said Nick Hughes, the chief executive officer and co-founder of Cavex.
Carbon credit markets have gained some momentum across the world, and now roughly 23 percent of global emissions are covered by some form of carbon credit pricing, with the value of traded carbon dioxide permits at 475 million carbon credits in 2022, according to the World Bank.
The bank has attributed the decline in carbon credits issued by 22 percent from the year before to the relatively adverse macroeconomic environment, which impacted the performance of businesses globally.
“Expanding access to carbon financing for smaller projects is critical to driving inclusivity in the voluntary carbon markets. We are extremely pleased to support Cavex and the work that the team is doing to unlock verification, trading and access to finance for projects in Africa,” said Paras Patel, managing partner at E3 Capital.
“By leveraging digital technology, Cavex’s platform brings integrity and price transparency to the sector, supporting a much-needed market mechanism to ensure the equitable distribution of climate finance.”
