Zimbabwe and a United Arab Emirates company, Global Carbon Investments (GCI), have signed a $1.5bn memorandum of understanding to unlock value in the southern African nation’s emerging carbon market.

Zimbabwean daily The Herald reported on October 2 that the package will be used to finance the development and sale of future carbon credits, in the form of Internationally Transferable Mitigation Outcomes (ITMOs), aligned with Article 6 of the Paris Agreement.

Zimbabwe's President Emmerson Mnangagwa and Sheikh Ahmed Dalmook al Maktoum, a member of the Dubai ruling family and chairman of GCI and Blue Carbon, witnessed the signing of the deal on September 29 in Harare.

The deal, covering about 7.5mn hectares or 20% of Zimbabwe’s landmass, is based on forest protection and rehabilitation.  It will potentially bring $1.5bn in climate finance into the country, al Maktoum said at the signing ceremony, according to Amwal Al Ghad on October 1.

Under the agreement, financing will be directed towards the prefinancing of carbon credit projects in Zimbabwe that will be developed by Blue Carbon, a GCI fully owned subsidiary and project developer.

Al Maktoum said a “large portion” of the revenue will be spent towards community engagement and on the local population.

“The project is anticipated to close the government of Zimbabwe’s financing gap to the tune of $200mn while enabling the country to generate high-quality carbon credits for use on the international carbon market,” Mnangagwa said, according to The Herald on September 30.

The financing initiative, the daily wrote on October 2, is poised to infuse critical funding into forest protection and community development projects, “with preliminary assessments projecting an estimated $13bn in revenue from Zimbabwe’s ITMO-based carbon credits over the coming decades.”