Ministry of Natural Resources and Climate Change has signed a carbon market trade agreement with Green Economic Partnership (GEP), a firm that promotes renewable energy and sustainability.
The United Arab Emirates-based firm is expected to undertake a carbon emission reduction project following the signing of the pact in Lilongwe on Tuesday.
During the event, Minister of Natural Resources and Climate Change Owen Chomanika said the firm will conduct its operations at Namizimu Forest Reserve in Mangochi District.
He said that over 21 million trees are expected to be planted before starting operations.
Chomanika said the forest has 37 000 hectares with potential to emit 12 million tonnes of carbon.
He said: “We have been in discussion with this partner for almost two years. We had no framework for this and we lacked a basis for doing such business. Now, with the framework in place, players are coming forward.
“I have to say that besides bringing revenue, Malawi will also be able to improve its forest cover due to afforestation and the livelihoods of the community surrounding the forest will also improve due to the economic activities of the project.”
The ministry’s Principal Secretary Yusuf Nkungula said the coming in of the firm means that Malawi has started making strides in carbon trade.
He said the newly launched carbon market framework has the potential to attract more players in the carbon credit trade.
GEP chief executive officer Arthur Chirkinian said they are planning to implement the project in various forest reserves as Malawi has a conducive environment and abundant resources for trade.
He said the project will also offer job opportunities to many Malawians.
Carbon trade is a sustainable environmental initiative that aims to mitigate carbon emissions through reforestation and foster environmentally friendly practices. It generates revenue for participating countries.
Malawi has the potential of earning $700 million (about K1.2 trillion) per annum from the carbon market if it can positively implement the Malawi carbon market framework that it launched two weeks ago, according to the ministry.
Last year, Malawi earned K150 million from carbon credit trading through projects under the Green Development Mechanism and Reducing Emissions from Deforestation and Degradation programme.
Data from the Ministry of Natural Resources and Climate Change showed that the funds were realised from the sale of about 75 000 carbon credits.
Carbon offset programmes or carbon financing are financial mechanisms and incentives designed to support projects that reduce greenhouse gases (carbon dioxide and methane) or remove carbon dioxide from the atmosphere
