Enabling a Thriving Africa Through Regenerative Finance

This week I had the privilege to showcase Kijani Pamoja: The Kilimanjaro Project during the FSDAfrica Annual Summit in Nairobi. As a project developer, I delved into the conditions and solutions necessary for a healthy, thriving planet—and more specifically, a healthy, thriving Africa.

Unlocking Essential Finance for Land Stewards

My burning question: how do we unlock the much-needed finance for the land stewards, organizations, and local communities on the ground? These are the individuals and groups ensuring we harness nature for Africa’s regenerative and transformative journey.

At Kijani Pamoja, our mission is to accelerate and scale biodiversity and ecosystem restoration in partnership with smallholder farmers and local communities. We work at the intersection of #regenerativeagriculture and #biodiversity enhancement, leveraging carbon markets to attract the vital finance needed to help farmers transition from monoculture farms towards regenerative systems.

From Dreams to Reality

When we started seven years ago, I often joked, “how do we make money grow on trees?” Today, we are quite literally being asked to do just that!? With strategic partners like The Nature Conservancy in Africa , The International Small Group and Tree Planting Program (TIST) BIRA , and Axum we've developed a positive economic model that increases smallholder farmers' revenues that do not solely rely on carbon revenues. By helping farmers transition to regenerative agricultural systems, they can diversify their income streams, increase yields by 20%, and see a 4x income multiplier per acre—all while participating in land restoration and global carbon and biodiversity markets.

Our project will roll out in three phases across the Pangani Water Basin bioregion, starting at the foothills of Kilimanjaro. Our ambitious targets include planting 61 million trees, engaging 380,000 smallholder farmers, and sequestering an estimated 20 million tons of CO2 over the project's lifetime. We aim to demonstrate our ability to scale and accelerate this model to transform smallholder farmer?livelihoods and restore the ecosystems they depend on.

Revisiting Financial Models for Nature Projects

Current global financial systems and models don't align with nature's timelines. The growth rate of a tree does not fit the obscene expectations of so many investors who want a 15%-20% IRR and money back in 10 years, with a money Multiplier of 8x.? Nor do these financial models account for the cultural and social complexities often associated with nature based project implementation. This complexity of nature’s timelines just don’t fit into a neat spreadsheets.? (no offence to the beautiful spreadsheets - we DO need them).???

Leading financial institutions and African investors have the opportunity to transform investment models and benefit from these amazing opportunities by adopting a long-term mindset and helping de-risk projects with early stage investment. We need partnerships with nature, land stewards, local communities, and indigenous peoples - no more exploitation, no more extraction..?

As Samantha Power from Finance for Gaia aptly put it, “We need finance in service of life.”

Addressing Underlying Challenges

Several challenges hinder the unlocking of finance in Africa:

• Insufficient knowledge and know-how on setting up, operating, and financing NbS projects.
• Lack of domestic risk capital to finance and de-risk projects, leading to non-African actors dominating the African market.

We need to debunk the myth that Africa is a high-risk continent, which makes finance expensive. Also, investors must recognise that the major risk does not just lie with the entities providing the finance, but rather communities also take significant risks with their land and livelihoods. Extractive investment terms can actually cause some of the biggest risks to project success.? Communities will come to learn that they only got a fraction of the value for their efforts, and over time if the income provided by the project is insufficient to truly transform their lives, they will cut their trees or may fall back into unsustainable farming practices, - and the project will fail. ? Value must be shared proportionally, with communities seen as business partners, not just beneficiaries.??

Catalytic Funding: The Need of the Hour

Catalytic funding is essential to making projects bankable, ripe for full financial investment.? To ensure we are clear on the definition, catalytic funding is finance to support operations and the team on the ground with project design and pilot implementation. This pilot phase would inform the project design document and provide sufficient finance to hire the relevant consultants, while conducting? baselines and setting up high quality MRV.? And most importantly, aligning communities and building capacity with these communities. ?

Have you heard of the story of the little red hen?? The Little Red Hen finds a grain of wheat on the farmyard and decides to plant it. She asks for help from the other farm animals— a cat, a dog, and a pig—but they all refuse. The hen plants the wheat, waters it, harvests it, and mills it into flour, all by herself. Finally, she bakes the flour into bread. When the bread is ready, she asks, who will help me eat the bread.”? All the farm yard animals say, Me! Me! Me!

The goal? of catalytic funding is to help that little red hen grow her wheat, produce her flour so that she will not only be able to bake her bread but also sell her bread at a premium price!

James Mwangi of Equity Bank Limited gave a talk last year during African Climate week in Nairobi about adding value locally to the natural resources and commodities needed for global decarbonisation, basically by doing so, you exponentially increase the value of these commodities, before bringing them to global markets.

?A Call to African Investors

Last week week my co-founder, Celia Francis of the The Art of Forests Alliance made headlines, partnering with Rubicon Carbon Carbon Streaming Corporation 微软 delivering on millions of credits and supporting local communities in Panama.? Also in the news, Meta, Salesforce , 谷歌 and Microsoft have created a buyers club.

Let this be a challenge for Africa with African companies forming alliances and partnerships to invest in nature in Africa, and deliver on nature based solutions.

Why do we need African investors? Because they understand Africa best—the challenges, risks, and immense potential. It's not Africa that's the greatest risk to project success but outdated, extractive investment mindsets. We need new models that emerge from Africa, for Africa.

Imagine the headline: "Kijani Pamoja partners with Equity Bank, ANCA African Development Bank Group , The Nature Restoration Company, and private sector partner Dangote Industries Limited Aliko Dangote to pioneer early-stage finance, keeping the value of nature in the hands of the land stewards while offering attractive returns to investors."

Conclusion

The world wants Africa's carbon, biodiversity, natural resources, and food; with investment terms no different from the extractive mining, oil and gas industries of the 20th century.? We have the opportunity to do it differently this time - to shift the power and keep the value in our hands.? Let’s invest in early stage project development and once we have our credits, nature certificates and regenerative commodities in hand, we can sell them to the highest bidder!

To close with a West African proverb: “When the music changes, so does the dance.” Let’s dance together to a new beat and create new opportunities for Africa. If you’re interested in joining this transformative journey, please connect with me.? Let’s choreograph new dance moves together and explore the capital opportunities here in Africa. Karibuni wote.

it's been so great dancing with Dorothy Maseke ,CFIRM Hosborn Wamukoya Syakaa William Devang Vussonji Paula Kensington FCCA Bastiaan Witvliet members of the Africa Natural Capital Alliance, commercials opportunities working group (excited for what is to come). Joy DiBenedetto CrossBoundary Advisory Loujeine Boutar

Great meeting in person Dr. Olufunso Somorin Everlyne Nairesiae Julius Court Loujeine Boutar Wanjira Mathai Beatrice Mubia Stephen K. Macharia

Ross Bernet Mark Napier Fiona Napier