Ethiopia is reviewing a draft Carbon Market Proclamation that would let local commercial banks buy, sell, and aggregate carbon credits. The bill also allows banks to issue green bonds, provide loans for emission reduction projects, and act as clearing agents under the National Bank of Ethiopia's oversight. The goal is to unify fragmented carbon trading into a single regulated framework. If passed, the law could unlock financing for small-scale projects like reforestation or clean cookstoves by bundling them into portfolios. Banks can also offer credit enhancements and equity investments for projects that reduce or remove greenhouse gases. A public consultation is planned before final enactment.
