Climate Finance | January 31, 2023

Obvious Ventures backs Senken to finance reforestation through ‘carbon forwards’

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

ImpactAlpha, January 31 – Berlin and Cape Town-based Senken is a blockchain-based carbon credit trading platform. Its next offering is a form of advance-purchase carbon credits to support reforestation and ecosystem restoration projects in development.

The carbon credit “forwards” provide investors with discounted carbon credits in return for financing environmental projects upfront.

Obvious Ventures led the $7.5 million financing round. Offline Ventures, Inflection, Kraken Ventures and Climate Capital participated.

Future carbon

Senken is minting 500 tokens for carbon credits that will be issued in 2025, which can then be claimed as offsets or traded. The financing mechanism assumes a rising price on carbon. Like traditional commodity futures, the carbon forwards allow investors to hedge against fluctuations in carbon values.

Senken’s first project will support the protection and restoration of 3,700 acres of severely degraded mangroves in Kenya. Mangroves are highly efficient carbon sinks, as well as critical coastal barriers against extreme weather events, the company explains.

The project is led by Vlinder Climate and certified by Verra.

Natural capital

Senken’s model, if successful, would provide much-needed “last mile finance” for countries in the global South. Varaha is supporting mangrove restoration in India while generating carbon credits to boost farmers’ livelihoods. Climate Asset Management is looking to invest in carbon credit projects that support smallholder farmers in Africa.