FSD Africa, the UK government’s flagship financial sector programme in Africa, is investing £400,000 ($550,000) in a company that is building a digital solution to connect carbon credits from small-scale green projects across the global south to international buyers.
The investment will support the test phase of the solution being developed by 4R Digital Ltd, co-founded by fintech entrepreneur Nick Hughes.
Hughes had previously led the development of African mobile money service M-Pesa.
4R Digital is a fintech startup that is developing financial solutions for a range of business partners committed to climate-positive projects in Africa spanning distributed solar energy, electric mobility and nature-based schemes. The company says its solution would connect these projects to investors looking to offset greenhouse gas emissions.
According to FSD Africa, individuals, organisations or governments can currently offset their greenhouse gas emissions by buying credits from projects that prevent, reduce, or remove an equivalent level of carbon. However, the markets are dominated by large-scale projects such as wind farms and waste-to-energy plants. Smaller players struggle to complete the complex and costly process of verifying the emissions they have helped avoid or absorb.
4R Digital’s Carbon Value Exchange (CaVEx) platform uses Internet of Things and machine-to-machine connectivity to remotely monitor tiny levels of activity by connected devices such as solar pumps and e-vehicles and to calculate their impact on carbon emissions.
By pooling these data, the platform centralises verification of emission reductions, cutting the cost for these projects to issue carbon credits. The exchange also enables micro-payments from the sale of carbon credits to be digitally transferred direct to the individuals involved in the projects.
FSD Africa said it has been working with 4R Digital over the past year to test the feasibility of using digital technology to open up access to climate finance, committing £250,000 in grant funding. It has now approved another £400,000 in the form of a convertible grant to enable 4R Digital to build a functioning version of the platform.
“There are many projects that simply cannot access climate finance because of the overhead costs associated with the processes involved and concerns on the ‘buy side’ about the accuracy of credit sources,” Hughes said.
“Advances in digital technology and connectivity let us remove barriers on both sides and ultimately enable more finance to flow to worthwhile initiatives in the global south,” he added.
Cairo-based e-sports and tournaments platform GBarena has raised a six-figure (under $1 million) sum in its pre-Series A round led by angel investors Ahmed Aboudoma, Kushal Shah, and HIM Angels VC network.
GBarena was founded in 2016 and is also backed by Cairo’s AUC Vlab. It has created an online gaming community connecting gamers with tournament organisers.
The company intends to use the funds to develop and produce new services such as the creation of digital store integrated with a GBarena coin currency that will allow gamers to buy in-game items directly from the platform.
The company has also brought in Eng. Ahmed Aboudoma as the new executive chairman of the company.