The Maldives has inked a memorandum of understanding (MoU) with the International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank (IsDB) Group, to explore the potential of generating ‘blue carbon credits’ from the country’s coastal ecosystem and selling them to carbon markets.

The Blue Carbon Generation Project agreement aims to assist the Maldives in achieving its sustainability goals and mitigating the impacts of climate change. The ITFC has also signed an MoU with the Regional Voluntary Carbon Market Company (RVCMC) to facilitate the project.

The project’s objective is to assess the feasibility of generating Blue Carbon Credits from the Maldives’ coastal ecosystem, including mangrove forests and seagrass meadows, and to facilitate the sale of the generated credits to carbon markets.

Blue Carbon Credits are a direct result of the unique ability of coastal ecosystems like mangroves and seagrass meadows to capture and store significant amounts of carbon. These ecosystems, covering a mere one percent of the ocean floor, can store up to 10 times more carbon per unit area than terrestrial forests.

Hani Salem Sonbol, CEO of ITFC, commented on the agreement, stating, “At ITFC, we prioritise sustainability in all our interventions aimed at supporting our member countries. This new collaboration with RVCMC and the Republic of Maldives is significant as it demonstrates the growing interest of our member countries in carbon credit.”

Riham ElGizy, CEO of RVCMC, added, “The voluntary carbon market scales projects that mitigate the impact of climate change and promote sustainable development, and we see significant potential in developing blue carbon projects in the Maldives.”

The agreement was signed by Finance Minister Mohamed Shafeeq, representing the Maldives, and Sonbol, representing ITFC’s CEO and IsDB Group Governor for the Maldives.

The strategic inclusion of income generation through Blue Carbon Credits in the carbon markets was a key move outlined in the government’s fiscal strategy for 2024-2026, published last year. This initiative, part of a broader effort to bolster national income, is projected to yield substantial returns. The Finance Ministry expects carbon credit sales to generate MVR 863.5 million.