A company founded and controlled by a former BP Plc executive has won a license to restore and protect mangrove forests in Mozambique, Africa’s biggest such project yet.

The United Arab Emirates-based Blue Forest plans to start planting 200 million mangrove trees in a concession twice the size of Singapore in November. It is helping to finance the project by pre-selling emissions offsets based on the carbon the coastal trees absorb. The company has spent $1 million on preparing for the task, which will cost a further $60 million. 

“This pre-selling mechanism allows me to tap into carbon financing at early stage so I can use the money to plant the trees,” said Vahid Fotuhi, who set up the company in January 2022. “When the trees are big and they’re generating carbon credits, we’ll use that to repay the loans.”

Mangroves, which mainly grow in salty and brackish water along coastlines, absorb as many as 10 times the carbon that most terrestrial trees take up, making them a powerful tool in the fight against global warming. That trapped carbon can be used to generate offsets, known as carbon credits, that emitters can buy to compensate for the climate-warming gases their operations release. 

A single carbon credit is equivalent to a ton of carbon dioxide or its equivalent either removed from the atmosphere or prevented from reaching it in the first place. These offsets have come under scrutiny in recent years after some projects were shown to have exaggerated their avoided-emissions claims. That’s led to a decline in the total sales of the credits to the global companies that are their biggest buyers.

Fotuhi served as BP’s head of government and public affairs in Algeria between 2004 and 2007 and then as director of its solar division for the Middle East and North Africa. Later, he worked in renewable energy and for a company that uses solar power to generate drinking water from the atmosphere. He also ran a firm that implemented social-impact projects in Africa. 

The MozBlue project, which covers 1,500 kilometers (932 miles) of coastline in the Zambezia and Sofala provinces, is expected to generate 5,000 jobs and 60% of the income will go to communities, contractors and the government, Fotuhi said. The first phase will cover 5,116 hectares of degraded forest. 

Over its 60-year lifespan, it’s expected to remove 20.4 million tons of carbon from the atmosphere, with progress assessed by measuring the growth and survival of the mangrove trees, he said. 

It’s Blue Forest’s first commercial-development project, with some of the initial carbon credits pre-sold to a European institutional investor, said Fotuhi, declining to identify the company. Philanthropic money funded earlier projects in Ivory Coast and Kenya, while commercial projects may soon follow in Tanzania and West Africa. In total, the company has projects that could cover 215,000 hectares in Africa and Asia, according to a statement.