- Imperative Global (Imperative) and CrossBoundary Group’s Fund for Nature have launched a new facility for the financing of early-stage carbon project development activities (the Facility).
The Facility is designed to catalyze investable, large-scale nature-based carbon projects in critical ecosystems across emerging markets including in Sub-Saharan Africa and the Amazon.
The first project funded under the Facility is a large-scale reforestation and re-vegetation project in Sub-Saharan Africa covering up to 100,000 hectares of badly degraded land. The parties expect to fund further early-stage projects under the Facility this year, and it is anticipated that the Facility will help to catalyze projects in Imperative’s pipeline with sequestration potential excess of 50 million tones of CO2 equivalent, creating thousands of local in-country jobs and flowing millions of dollars to communities in the Global South.
The voluntary carbon market suffers from a lack of available capital for early-stage feasibility, planning, and design work.
“Without financing for critical early-stage activities, many projects never make it to market. This is particularly true in underserved markets, where early-stage project risk is compounded by real or perceived country risk considerations,” said Kate Wharton, Managing Director of the Fund for Nature at CrossBoundary. “Early-stage funding is critical for scaling the pipeline of institutional-grade nature-based carbon projects.”
The new Facility makes financing available to Imperative to conduct early-stage work on projects in its pipeline in order to progress through the feasibly and planning phase before reaching final investment decision on full-scale project funding. It complements Imperative’s Project Funding Agreement with Rubicon Carbon and Freepoint Commodities announced last year.
“This is an excellent example of financial innovation applied to unlock scale and quality in the carbon markets,” said Scobie Mackay, CEO of Imperative. “We are delighted to be collaborating with CrossBoundary to develop creative ways to unlock institutional-scale investment in high-quality carbon projects in the Global South.”
This facility marks the inaugural investment by the Fund for Nature, CrossBoundary’s third investment platform focused on climate impact in emerging markets. Last year, the Fund for Nature was awarded a design funding grant from the SDG Impact Finance Initiative supported by Convergence Blended Finance.
Author: Bryan Groenendaal
