KCB Bank Kenya has received approval for a $96.9 million (KSh12.5 billion) financing facility from the Green Climate Fund to accelerate climate-smart investments targeting Micro, Small and Medium Enterprises (MSMEs) and farmers across the country.
The facility, structured as a blended finance package combining concessional loans, a guarantee, and a grant, will be implemented under the Climate Smart Technology (CST) programme. It is designed to expand access to affordable financing for vulnerable communities while catalysing private sector participation in green investments.
Driving climate-smart technologies and inclusion
The funding will support value-chain and gender-inclusive interventions, including the adoption of solar-powered systems, clean cooking technologies, climate-smart agriculture, waste management solutions, circular economy initiatives, and energy efficiency improvements.
Through these investments, beneficiaries are expected to build resilience, improve productivity, and transition to low-carbon, sustainable practices.
Focus on adaptation and mitigation
Approximately 60% of the financing will be directed toward climate adaptation measures such as climate-resilient agriculture and water management technologies. The remaining 40% will fund mitigation efforts, including renewable energy and energy efficiency projects.
KCB will deploy flexible credit products, blended finance structures, and digital lending platforms to scale access to underserved populations, particularly in rural and high-risk areas.
Leadership perspective on climate finance
KCB Group CEO Paul Russo described the initiative as a significant milestone in scaling climate finance.
“This is a bold step to scale climate finance. By targeting MSMEs and smallholder farmers, we are ensuring that no one is left behind in the transition to a climate-resilient future,” he said, emphasising the bank’s commitment to empowering communities with financing and technologies to withstand climate risks.
On her part, Catherine Koffman highlighted the role of the facility in addressing financing barriers.
She noted that the programme will help crowd in private capital and de-risk climate-smart investments, enabling MSMEs and farmers to adopt solutions that enhance resilience, productivity, and long-term economic stability.
Aligning with national climate priorities
The programme aligns with National Climate Change Action Plan III and Kenya’s updated Nationally Determined Contribution (NDC), reinforcing national efforts to transition to a low-carbon and climate-resilient economy.
Addressing Kenya’s climate vulnerability
The approval comes amid increasing climate challenges in Kenya, where over 80% of the land is classified as arid and semi-arid. These regions frequently experience droughts and floods, contributing to annual economic losses estimated at about 3% of GDP.
With nearly half of the population living below the poverty line and agriculture contributing 26% to GDP while employing about 70% of the rural workforce, climate change poses a significant threat to livelihoods and food security. Limited access to climate-smart technologies and financing continues to constrain MSMEs and farmers.
KCB deepens green financing footprint
KCB Group has continued to expand its role in sustainable finance. In the past year, the bank assessed loans worth KSh578.3 billion for environmental and social risks, bringing the cumulative total to over KSh1 trillion since 2020 under its Environmental and Social Due Diligence (ESDD) framework.
The bank also disbursed KSh50 billion in green loans, increasing its green portfolio to 25.84% from 15% in 2023. These investments have supported initiatives in energy transition, blue economy, e-mobility, and climate adaptation, reinforcing KCB’s commitment to driving inclusive and sustainable growth in East Africa.