KCB Bank Kenya has received approval for a $96.9 million (KShs. 12.5 billion) financing facility from the Green Climate Fund, aimed at accelerating climate-smart projects for Micro, Small, and Medium Enterprises (MSMEs) and farmers across Kenya.
The financing forms part of the Climate Smart Technology (CST) programme and represents a strategic effort to build resilience in Kenya’s most vulnerable communities while promoting economic stability.
The blended finance initiative, which combines concessional lending, guarantees, and grants, will fund interventions that strengthen value chains, promote gender inclusion, and encourage the adoption of solar-powered and clean cooking technologies, climate-smart agriculture, waste management, circular economy initiatives, and energy efficiency improvements.
These measures are designed to boost productivity, reduce carbon emissions, and support communities in adapting to climate shocks.
About 60 percent of the investments will focus on adaptation strategies, including climate-resilient agriculture and water management technologies, while 40 percent will target mitigation efforts such as renewable energy and energy efficiency.
KCB Bank Kenya plans to deliver the funding through flexible credit products, mixed finance structures, and digital lending platforms, ensuring that underserved populations can access resources at scale.
Paul Russo said, “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. Our goal is to equip communities with the tools, technologies, and financing they need to thrive in the face of climate change threats.”
Catherine Koffman highlighted that access to finance remains one of the toughest barriers to climate action for small businesses and farmers. She noted that GCF funding will unlock private sector capital and de-risk climate-smart investments, empowering Kenya’s MSMEs and farmers to adopt solutions that strengthen resilience, improve productivity, and secure long-term economic stability.
The approval comes amid heightened vulnerability to climate change in Kenya, where over 80 percent of the land is arid or semi-arid and subject to frequent droughts and extreme flooding. These climate hazards contribute to economic losses estimated at 3 percent of the country’s GDP annually.
With agriculture employing 70 percent of the rural workforce and contributing 26 percent to GDP, erratic weather patterns severely threaten livelihoods, food security, and economic stability.
KCB Group has actively advanced climate action and financial inclusion, assessing loans worth KShs. 578.3 billion for environmental and social risks last year alone, bringing the cumulative total since 2020 to over KShs. 1 trillion under the Group’s Environmental and Social Due Diligence (ESDD) process.
The bank also disbursed KShs. 50 billion in green loans, expanding its green portfolio from 15 percent in 2023 to 25.84 percent, supporting initiatives in the blue economy, e-mobility, and climate adaptation.
Through this GCF-backed facility, KCB Bank Kenya is set to mobilize private sector investment, enhance climate resilience, and empower farmers and MSMEs to adopt sustainable, low-carbon practices, ensuring that Kenya’s economic development is both inclusive and environmentally sustainable.
