Kenya to Set Up East Africa’s First Carbon Offset Exchange

Kenya launched its International Financial Centre in Nairobi on Monday, expanding its financial sector’s presence into the global tech start-up and fintech market.

NIFC aims to raise over $2 billion (Ksh 236 trillion) in targeted incremental cumulative investments by 2030.

During the launch, the Nairobi International Financial Center, AirCarbon Exchange (ACX) and the Nairobi Securities Exchange signed a memorandum of understanding to establish the first carbon exchange in the region.

According to NIFC, integrating Environmental, social, and corporate governance (ESG) into financial services informs the progressive operating environment and regulatory policies critical to supporting the deployment of green and sustainable finance.

Companies operating a carbon market exchange or emission trading system under the NIFC will benefit from 15% corporate tax for the first 10 years of operation. Investor companies certified by the NIFC Authority and have invested a minimum of Ksh 5 billion will benefit from the certainty that the Capital Gains Tax applicable at the time they make their investments will remain unchanged during the lifetime of the investments.  

“The carbon exchange will be an important element in Kenya’s sustainable finance ecosystem,” Kevin Iwanaga, president and chief operating officer – Middle East and Africa for AirCarbon Exchange, said in a statement.

ACX was recognized as the Best Carbon Exchange in Environmental Finance’s prestigious Voluntary Carbon Market Rankings 2021 – the largest and most closely watched survey of the world’s Voluntary Carbon Market. 

The Nairobi International Financial Centre was established in 2021 to attract responsible, ambitious businesses to Nairobi and provide them with the conditions to flourish in Kenya and the region.

Nairobi is East Africa’s leading financial hub, providing an efficient gateway for investors and businesses to access 54 African countries, 1.3 billion people, and a combined GDP of $3.4trillion (Ksh 4 quadrillion).

As the third-largest economy in sub-Saharan Africa, Kenya is already a vibrant commercial hub, with major global companies choosing to locate their regional headquarters in Nairobi.

The capital is also a major continental tech hub earning its well-deserved moniker as ‘Africa’s Silicon Savannah’. – Its tech ecosystem hosts many innovation hubs and hundreds of start-ups.

The Centre aims to create opportunities to mobilise domestic and international savings and investments. It also looks to deepen employment in the financial services sector and related sectors. NIFC will seek to attract local companies that fit the participation criteria and create an environment that encourages proactive collaboration between local and international players.

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