E3 Capital backs digital carbon financing platform
The Carbon Value Exchange (Cavex) has closed its seed funding round, led by E3 Capital with participation from FSD Africa Investments (FSDAi), to bring its digital carbon financing platform to full commercial scalability. The E3 Capital and Cavex partnership will also provide an opportunity for E3 Capital’s existing and future portfolio companies to access the carbon markets through the platform.
E3 Capital’s commitment, through its second fund, the E3 Low Carbon Economy Fund (E3 LCEF I), will support Cavex in launching a platform that utilises digital technologies to increase trust, equity, and transparency in the voluntary carbon markets. Cavex enables access to carbon financing for small-scale projects across Africa, which currently struggle to participate given the high up-front cost and time required for carbon credit validation, issuance, and brokerage.
Nick Hughes, CEO and co-founder of Cavex, said: “This investment will help us prove how digital technology can open-up climate finance for many people, communities and projects that are displacing or removing carbon. Cavex has the potential to scale in the way mobile money scaled 15 years ago when Kenya and M-Pesa spearheaded a global wave of digital finance. More widely, Africa has a huge role to play in the evolution of carbon markets and in this context, it is critical that we find ways to distribute climate finance more equitably and in a way that has real socio-economic impact.”
Paras Patel, managing partner at E3 Capital, said: ”Expanding access to carbon financing for smaller projects is critical to driving inclusivity in the voluntary carbon markets. We are extremely pleased to support Cavex and the work that the team is doing to unlock verification, trading and access to finance for projects in Africa. By leveraging digital technology, Cavex’s platform brings integrity and price transparency to the sector, supporting a much-needed market mechanism to ensure the equitable distribution of climate finance.”