Climate finance company Solid World has partnered with carbon project developer ALLCOT, voluntary carbon marketplace Vlinder and ecosystem restoration organization Mangrove DAO to create a new liquidity fund for carbon projects, according to a statement by ALLCOT.
This initiative not only democratizes access to financing in the sector by providing developers of mangrove restoration carbon projects with the funds they need, but also generates a structured inventory for distributors seeking to sell high-quality carbon credits.
The liquidity fund is described as “a crowdsourcing counterpart to the marketplace, incentivizing the connection between buyers and sellers”.
It is a win-win solution for both carbon projects and distributors since it ensures improved access to funding, attractive pricing, and real-time liquidity, ALLCOT said.
Furthermore, it facilitates trading and hedging strategies normally attainable in the traditional stock market, but not in the carbon markets, at least until now.
The first beneficiaries of the liquidity fund will be Blue Carbon’s projects in Kenya, Senegal, Indonesia, and Myanmar, generating carbon credits the proceeds from which will directly benefit the local communities of the respective projects.
The liquidity fund lead by Solid World is expected to boost the voluntary carbon market industry by improving transparency and accessibility, ensuring access to more capital, and ultimately generating more impact to address the climate crisis.