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Kenya on Monday opened the Nairobi International Financial Centre (NIFC), with a goal of attracting investment of more than $2 billion by 2030, and of setting up East Africa’s first carbon exchange.
Singapore’s AirCarbon Exchange (ACX), which will develop the carbon exchange, said it will trade certified carbon offsets to help Kenya to finance environmental projects, including reforestation and land restoration, as it seeks to meet its climate commitments.
“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 ACX, said in a statement.
He did not give a date for when carbon trading would start.
ACX, the second investor in the NIFC after Prudential Plc , will offer firms access to all global carbon registries, it said.
Oscar Njuguna, the acting CEO of the NIFC, said the carbon exchange would allow clean energy producers like KenGen to trade emissions locally.
He said it would seek to attract small companies by allowing trade of kilograms rather than tonnes of carbon dioxide, which is the international norm.
But Njuguna said there was much to do to convince prospective investors.
He said the government needed to sign more double taxation agreements to prevent companies from paying the same taxes in two countries.
In addition, he said the NIFC has proposed the creation of a special court dedicated to financial and technological disputes to try to get round the issue of slow dispute resolution.
In most cases, the Kenyan judiciary takes a minimum of five years to reach a resolution, which Njuguna said deterred international investors.