The Tribune

• Eyeing 'conservative' $300m-$400m from blue carbon credits

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The Bahamas is poised to be the first country to list a “natural asset” on the New York Stock Exchange (NYSE) with "conservative" forecasts that it could generate between $300m-$400m in new revenues from monetising blue carbon credits.

Anthony Ferguson, president of CFAL (the former Colina Financial Advisors), told a panel discussion hosted by the Chartered Financial Analyst (CFA) Society of The Bahamas that this nation is making progress on efforts to verify the size and value of its natural assets prior to developing carbon credits and their trading.

He said: “We are working on a number of financial products that we hope to bring out once we would have had all of the relevant verification,etc. But I think it's going to be a new asset class. Natural assets would be a new asset class. Just how with derivatives you have fixed income equities, I am prepared to bet that within five years on your financial statement or your investment statement, you will have a section called natural assets.

“The Bahamas hopes to be the first country to list a natural asset company on the NYSE. We are well on our way to doing some of the work on that. Hopefully next year we can do that. Again, in the carbon space we, as a country, for the first time, I would say, are leading the world with respect to seagrass blue carbon. We are pretty close to the verification process.”

Mr Ferguson, together with Antoine Bastian, Genesis Fund Services’ chief, were previously named by Prime Minister Philip Davis KC as two principals who will help lead efforts to “financially engineer and structure the carbon credits, and to create a network to effectively market, sell and monetise carbon credits” on The Bahamas' behalf.

Mr Davis last year revealed that Carbon Management Ltd, a Bahamas-domiciled entity, would be charged with raising the $50m-$60m required to map all The Bahamas’ blue carbon assets such as mangroves and seabeds. The size and value of The Bahamas' blue carbon sinks, which remove carbon dioxide from the world's atmosphere, have to be verified by independent bodies before they can be monetised and converted into carbon credits.

The Prime Minister, during the 2023-2024 Budget communication, said the necessary seagrass mapping is underway and indicated that the process may be completed by the 2024 first quarter. Carbon credits are one of the new revenue streams that the Government is seeking to alleviate the fiscal pressures caused by persistent annual deficits and an $11bn-plus national debt.

Mr Ferguson told the CFA Society panel discussion that other countries are looking to The Bahamas and how its carbon credit plans are progressing. He added that CFAL has also been approached by other Caribbean countries to help with developing their respective carbon markets.

The CFAL chief referred to Beneath The Waves, which was founded in 2013 as a non-profit focused on Marine Protected Areas, threatened species, deep sea conservation and blue carbon, and was selected “for several compelling reasons” to map The Bahamas' blue carbon assets including its ten-year history in The Bahamas doing shark research.

"The Bahamas has about 97,000 square kilometres of sequence that we need to map," Mr Ferguson said of the country's seagrass beds. "We have broken it down into 5,000 square kilometres. For any number of reasons we have mapped 15,0000 square kilometers so far.

"We’re planning another mapping of 10,000 [square kilometres] in September, which would bring us up to about 25,000 square kilometres we would have mapped. Each square kilometre is, based on our initial finding, about 500,000 carbon credits.”

The Bahamas is “not interested in selling carbon credits” but, rather, selling “carbon certificates”, which will include carbon credits and biodiversity. Mr Ferguson’s group in conjunction with Hexagon, which is doing all of the mapping, is also using new equipment that can test biodiversity over the seagrass and the ocean.

He added: “We think that once we are fully operational that we will produce anywhere from 14m to 18m tonnes of carbon a year. That's using today's HIS Market price of around $50, so on the low end conservatively we can see anywhere from $300m to $400m of new revenues. On the high end, we could probably see over $2bn."