KCB Bank Kenya has received approval for a $96.9M (KSh. 12.5B) financing from the Green Climate Fund (GCF) to accelerate green projects for Micro, Small and Medium Enterprises (MSMEs) and farmers in Kenya.
The blended finance initiative—a mix of concessional lending, a guarantee, and a grant—under the Climate Smart Technology (CST) programme, is meant to support Kenya’s most vulnerable communities.
This facility will be deployed towards supporting value-chain and gender-inclusive interventions through the adoption of solar-powered and clean cooking technologies, climate-smart agriculture, waste management and circular economy as well as energy efficiency improvements.
The KCB initiative will enable them to build resilience, improve productivity, and transition to low-carbon practices.
Approximately 60% of investments will focus on adaptation, particularly climate-resilient agriculture and water management technologies, while 40% will target mitigation technologies such as renewable energy and energy efficiency.
KCB BANK KENYA CLIMATE SMART FINANCIAL PRODUCTS
Through this facility, KCB Bank Kenya will deploy financing solutions, including flexible credit products, mixed finance structures, and digital lending platforms, to reach underserved populations at scale.
KCB Group CEO, Paul Russo said; “This is a bold step to scale climate finance 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. Our goal is to empower these communities with the tools, technologies, and financing they need to thrive in the face of climate change threats,”
The program aligns seamlessly with Kenya’s National Climate Change Action Plan (NCCAP) III 2023 and the updated Nationally Determined Contribution (NDC).
Catherine Koffman, Director of the Green Climate Fund’s Department of the Africa Region said: “The climate-smart technologies for micro, small and medium-sized enterprises and farmers project addresses one of the toughest barriers to climate action: access to finance for small businesses and farmers. By crowding in private capital and derisking climate-smart investments, GCF finance will empower Kenya’s MSMEs and farmers to adopt solutions that strengthen resilience, productivity and long-term economic stability. The investment reflects GCF’s ability to unlock private investment to deliver capital at scale and the Fund’s commitment to be Kenya’s climate partner of choice.”
The approval comes at a time when Kenya continues to face acute vulnerability to climate change, with over 80% of its landmass categorized as arid and semi-arid lands (ASALs). These regions experience frequent climate hazards, including prolonged droughts and extreme flooding, leading to significant economic losses – estimated at 3% of the country’s GDP annually.
With approximately 46% of Kenyans living below the poverty line, and agriculture contributing 26% to GDP while employing 70% of the rural workforce, climate disruptions severely impact livelihoods, food security, and economic stability. On the other hand, reliance on rain-fed agriculture exacerbates exposure to erratic weather patterns. MSMEs, farmers, and rural communities struggle to access climate-smart technologies for food production, financing mechanisms, and adaptation strategies.
KCB Group continues to make significant strides in climate action, financial inclusion, and community development in line with its ambition to create long-term value for stakeholders while supporting East Africa’s transition to a green and inclusive economy.
Last year, KCB Group assessed loans valued at KSh 578.3 billion for environmental and social risks last year, further deepening the Bank’s play in green financing. This brings the cumulative total assessed since 2020 to over KSh 1 trillion under the Group’s Environmental and Social Due Diligence (ESDD) process. KCB also disbursed KSh 50 billion in green loans, growing its green portfolio to 25.84% from 15% in 2023.
The support was extended to green products designed to foster energy transition, including initiatives in the blue economy, e-mobility, and climate change adaptation.
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