Africa’s ambition to turn carbon credits into a major source of climate finance faces a fundamental obstacle: investors want projects that are ready for financing, but developers often lack the money needed to prepare them.
Teddy Mugabo, Chief Executive Officer of the Rwanda Green Fund, raised the concern during the Carbon Markets Africa Summit in Kigali, where she joined a panel discussion titled “What Are Investors Actually Funding and Why?”
“If we want more investable African carbon projects, someone must invest in making them investable,” Mugabo said.
Her argument highlights a financing gap affecting African climate projects. Before a project can attract commercial investment, developers must often finance feasibility studies, establish emissions baselines, prepare technical documentation and demonstrate that the expected carbon reductions can be independently verified.
These preliminary activities require capital, yet investors frequently prefer to commit funding only after such requirements have been met.
Mugabo called for patient capital and shared financial risks involving governments, development partners, project developers and private investors.
The challenge is particularly significant given Africa’s ambitions in the global carbon market. The Africa Carbon Markets Initiative has outlined an ambition to generate 300 million carbon credits annually by 2030, potentially unlocking $6 billion in revenue and supporting 30 million jobs. These figures represent targets and projections, not realised market outcomes.
The summit, held at the Kigali Convention Centre from October 13 to 15, brought together more than 500 participants, including investors, project developers, government representatives and carbon credit buyers. Organisers showcased more than 40 projects and programmes, including at least 8 opportunities presented as investment-ready.
Rwanda has already established a National Carbon Market Framework under Article 6 of the Paris Agreement, providing procedures for developing, approving and trading carbon credits.
In March 2025, Rwanda also launched an $854,859 programme with the Global Green Growth Institute to strengthen its readiness for international carbon markets.
The country has experience in carbon credit generation. Government figures show that more than 2.25 million credits had been issued by December 2020, with improved cookstove projects accounting for 87% of certified emission reductions reported in its historical portfolio.
However, expanding the market beyond established activities into larger forestry, agriculture, energy and industrial projects requires credible project pipelines and financing mechanisms that can absorb early-stage risks.
For Mugabo, the immediate priority is therefore not simply attracting more investors, but ensuring that promising African projects receive the preparation funding needed to meet investment standards.
Without that support, Africa risks having substantial carbon market potential on paper while too few projects reach the stage where investors are willing to finance them.
