Ethiopia is drafting a federal proclamation that would treat carbon credits as intangible collateral for loans, integrating them into the formal banking system. The proposal, led by the Ministry of Planning and Development with the Ministry of Finance and Agriculture, establishes a centralized registry under the National Bank of Ethiopia to record ownership and secure financial interests in carbon assets. Under the draft, carbon credits generated in Ethiopia would be federal property unless ownership is transferred via government-approved contracts. Commercial banks could accept registered credits as security for lending. Project developers must register in the Ethiopia National Carbon Registry and pass review by an intersectoral committee on environmental baselines and compliance. This move aims to unlock climate finance by treating carbon assets like other collateral, potentially boosting investment in local carbon projects.
