Luxembourg-based Althelia Climate Fund has invested $10 million in a Kenyan project that is part of a United Nations scheme to take a market-based approach to curbing destruction of forests in developing nations. The move is the latest sign of growing private sector investment into projects underlying the U.N.’s Reducing Emissions from Deforestation and forest Degradation (REDD) mechanism.
Deforestation accounts for almost a fifth of the world’s greenhouse gas emissions, blamed by scientists for causing dangerous climate change. Deforestation also impairs the planet’s ability to absorb carbon from the atmosphere.
Althelia was set up last June with backing from a number of funding agencies, including the European Investment Bank, Dutch development bank FMO and development finance company Finnfund. The Taita Hills project, developed and managed by California-based Wildlife Works, is the fund’s first investment.