Nemr: Now is good time to explore innovative ways to finance carbon projects

01 / 07 / 2024

By Marwa Nassar - -

Omar El Nemr, Lead – Project Management and Structuring, MENA at VNV Advisory Services, said now is a good time to start to explore novel and innovative ways to finance carbon projects.

He made the remarks during the 6th Forum on Strategies for Transition to Green Economy that kicked off earlier Monday.

“Most of our projects are community projects. When I say community projects, they’re usually smallholder farmer projects,” Nemr said.

“So a community of farmers in Africa would like, for example, a solar pumping program in Tanzania. And what we would do is we would make sure that the finances are there through carbon finance, and then we’d sell the credits afterwards, and we’d make sure that the operation expenditures of the projects are satisfied, as of now, this model has been working, but we do see there are limitations currently in the finance space,” Nemr expounded.

“More and more people, as the carbon markets come under scrutiny, are starting to talk about lack of transparency, are starting to talk of lack of integrity, and this has really limited the funding that goes into our projects. And people get cold feet,” he said.

“People start to be more careful, which is good, of course, but being too cautious has caused a bottleneck in finances, and I think that now is a good time to start to explore novel and innovative ways to finance carbon projects,” Nemr accentuated.

“We’ve been relying heavily on equity investments, and I think that the conversation now is tending towards more novel instruments, like debt, asset-backed securities, and concessional finance,” he concluded.