KCB Bank Kenya has received approval for a $96.9 million (KSh 12.5 billion) financing facility from the Green Climate Fund to expand access to climate-smart technologies for small businesses and smallholder farmers across the country.
The facility combines concessional lending, a guarantee, and a grant. It will be deployed under the Climate Smart Technology programme, targeting Kenya’s most climate-vulnerable communities through solar energy, clean cooking technologies, climate-smart agriculture, waste management, and energy efficiency.
Sixty percent of the investments will fund adaptation measures, including climate-resilient agriculture and water management. The remaining 40 percent will go toward mitigation technologies such as renewable energy and energy efficiency upgrades.
Why this matters for Kenya
The approval comes against a difficult backdrop. More than 80 percent of Kenya’s landmass falls under arid or semi-arid classification, and climate-related hazards cost the country an estimated 3 percent of GDP every year. Agriculture contributes 26 percent of GDP and employs 70 percent of the rural workforce, leaving millions of people directly exposed to erratic rainfall and prolonged drought.
KCB Group CEO Paul Russo said inclusion sat at the centre of the facility’s design. “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.
Removing the finance barrier
Catherine Koffman, Director of the GCF’s Africa Region Department, said the facility took aim at one of the most persistent obstacles to climate action in developing economies: access to finance for small businesses and farmers.
She said the structure was built to draw in private capital and reduce the risk attached to climate-smart investments at scale. “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,” she added.
KCB will channel the funds through flexible credit products, blended finance structures, and digital lending platforms to reach underserved populations. The programme aligns with Kenya’s National Climate Change Action Plan III and its updated Nationally Determined Contribution.
KCB’s green finance record
The deal extends KCB Group’s existing push into green finance. The bank disbursed KSh 50 billion in green loans last year, growing its green loan portfolio from 15 percent in 2023 to 25.84 percent. It also assessed KSh 578.3 billion in loans for environmental and social risks during the same period, bringing the cumulative total assessed under its Environmental and Social Due Diligence process to over KSh 1 trillion since 2020.
