Abu Dhabi-based asset management firm Offset8 Capital plans to raise at least USD 250 mn for a “first of its kind” carbon investment fund in MENA, according to a statement. It said it targets to secure the initial capital raise for the close-ended fund in 3Q 2023, subject to regulatory approval.

The details: The fund will finance climate mitigation and adaptation projects, with a focus on mangrove restoration, reforestation, and biochar, according to the statement. It will seek projects particularly in Africa and Southeast Asia “to contribute to both environmental conservation and sustainable economic development,” the statement said. Over 50 projects in 29 countries have been identified to form the fund’s investment pipeline, it added, without providing further details.

Carbon credits in the pipeline: Offset8 will adhere to the Core Carbon Principles set by the Integrity Council for the Voluntary Carbon Market for producing high-quality carbon credits from the projects it invests in, the statement notes.

And they’re already courting offtakers: The firm has held talks with potential counterparts in Japan and other unnamed countries where main credit buyers are based, it said, expecting them to “act as off-takers of the carbon credit that the fund is expected to receive.”

Who is Offset8 Capital? Offset8 is an asset management company focused on decarbonization projects in the Middle East, Africa and Southeast Asia, according to its website. Its projects portfolio include carbon removal projects and Market Liquidity and

Technology Infrastructure.

The UAE is on board with carbon credit trading: The UAE plans to launch regulating carbon credit trading exchanges and clearing houses ahead of COP28. In June, the UAE Independent Climate Change Accelerators launched the UAE Carbon Alliance in partnership with Singapore-based carbon trading exchange AirCarbon Exchange (ACX) in a bid to establish a framework for carbon markets. The alliance was launched a year after the Abu Dhabi Global Market said it was working with ACX on launching the world’s first fully regulated carbon trading exchange.

And it’s part of a regional trend: Saudi Arabia’s Regional Voluntary Carbon Market Company (RVCMC) — established by the Saudi sovereign wealth fund and the Saudi Tadawul Group — plans to launch a carbon trading exchange early next year. The announcement came as the RVCMC sold 2 mn tons of carbon credits in June in what the company described as the largest-ever voluntary carbon credit auction. A carbon market in Egypt is also in the works, with the Financial Regulatory Authority forming in April a committee to supervise and regulate the country’s soon-to-be launched voluntary carbon market.