The foundation of regional coordination is the East African Alliance on Carbon Markets and Climate Finance, which brings together eight countries (Burundi, Ethiopia, Kenya, Rwanda, Somalia, Sudan, Tanzania, and Uganda). The Alliance develops country profiles, analyzes emission reduction technologies, and harmonizes approaches to participation in regulated and voluntary markets. In May 2026, a regional roundtable was held in Nairobi (Kenya) with the participation of donors and investors, where it was emphasized that strengthening coordination among the relevant institutions is an important condition for attracting long‑term private investment.
A significant impetus to this process was provided by the conclusion of a number of bilateral agreements under Article 6 of the Paris Agreement. Thus, in 2025–2026, Singapore signed implementation memoranda with Rwanda, Ethiopia, and Tanzania. Rwanda intends to sell 7.5 million tons of carbon equivalent worth approximately $337 million; Ethiopia has already concluded deals worth $70 million; Tanzania has gained access to a new channel for forest credits..
Regulatory frameworks are being actively developed at the national level. Kenya is developing a National Carbon Registry and transferring market oversight to the Capital Markets Authority; the REDD+ emissions tracking system has been implemented. In May 2025, Uganda launched comprehensive rules on climate change mechanisms, having already achieved a reduction of CO₂ by 8.9 million tons and becoming the first African country to submit REDD+ results to the UN Framework Convention on Climate Change. Rwanda has introduced a standardized fee structure and is piloting an emissions quota system.
According to experts, the carbon market in East Africa could grow from the current $0.9 billion to $6 billion by 2030, provided that governance and verification are strengthened. In Kenya, wildlife conservation projects have brought between $280,000 and $290,000 in credit sales to local communities, and Tanzania has reported paying $17 million in dividends to its citizens.
At the same time, despite clear progress, a significant gap in climate financing remains: current flows cover only 25% of the region’s needs. The main barriers remain the insufficient elaboration of national frameworks, the lack of implementation capacity, and the absence of integrity standards.
Furthermore, numerous studies have documented widespread overestimation of results in deforestation prevention projects. When funding is focused on volume at the expense of actual emission reductions, and local institutions are left out of the process, markets misjudge the potential risks. In Kenya, a number of projects have faced legal disputes due to issues related to community consent. Additionally, studies of eight agricultural projects in the region have revealed a fundamental mismatch in scale: buyers operate within the logic of the global economy and financial speculation, whereas local farmers are focused on securing their livelihoods and ensuring food security.
A critical factor is the issue of land ownership. Tanzania’s projects (in Longido, Monduli, and the Resilient Tarangire Ecosystem initiative) have encountered concerns from nomadic Maasai communities about the disruption of their way of life. For investors, the key question is whether the countries will be able to prepare a system of land rights, monitoring, and benefit distribution that is ready to work with international buyers.
According to experts, to overcome existing barriers, it is necessary to accelerate regulatory readiness, strengthen regional coordination to improve efficiency and eliminate duplication, increase transparency in transactions and benefit distribution to build investor confidence, and implement inclusive financing models that engage local communities and ensure fair income distribution.
As noted at the regional conference on the development of carbon markets and the attraction of climate financing for clean energy projects, which was held in Nairobi (Kenya) in February 2026, the development of carbon markets is not just about attracting money, but about creating a predictable and transparent framework that makes it possible to recognize, monetize, and trade real emission reductions.
East Africa is going through a phase of active institutional development of carbon markets. The region is demonstrating impressive dynamics, but serious obstacles remain: regulatory unpreparedness, a lack of funding, problems with credit integrity, and land conflicts. Overcoming these challenges requires coordinated efforts by governments, international institutions, and the private sector. If these tasks are successfully addressed, East Africa could not only attract multibillion‑dollar flows of climate capital but also become a model for the sustainable development of carbon markets for the entire continent.
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