AfDB and KCB Bank sign $150 million deal to accelerate green lending and trade
The African Development Bank Group (AfDB) and KCB Bank Kenya have sealed a major financing agreement worth $150 million (approx. KES 19.5 billion) aimed at bolstering green finance and expanding trade capabilities for Kenyan businesses.
The deal, signed on December 11, 2025, positions KCB to significantly increase its lending to climate-smart projects while supporting the country’s small business and corporate sectors.
The financing package is structured into two distinct components designed to address capital strength and trade risk. The first component is a $100 million subordinated debt facility, which will shore up KCB Kenya’s Tier II capital. This injection is intended to reinforce the bank’s capacity to finance strategic sectors, specifically aligning with its long-term goal to allocate 25 percent of its loan portfolio to green initiatives by 2031. These initiatives cover critical areas such as renewable energy, infrastructure development, and sustainable agriculture.
The second component is a $50 million transaction guarantee. This facility allows the African Development Bank to provide up to 100 percent coverage to confirming banks against non-payment risks associated with letters of credit and similar trade finance instruments issued by KCB. This guarantee is expected to smooth the flow of trade by reducing the risk premium for international transactions.
Alex Mubiru, the African Development Bank Director General for East Africa, emphasized that the facility reflects a mutual dedication to balancing economic progress with environmental responsibility.
“We are proud to partner with KCB as this facility is a testament to our shared commitment to advancing Africa’s green transition and ensuring that economic growth goes hand in hand with environmental stewardship. KCB has demonstrated strong leadership in sustainable finance, and we are confident this collaboration will deliver measurable climate impact and inclusive development for Kenya and the region,” said Mr. Mubiru.
The collaboration is projected to drive significant outcomes for small and medium-sized enterprises (SMEs) and women-led businesses. By expanding access to long-term finance, the deal aims to spur job creation and enhance economic resilience against market shocks.
KCB Bank Kenya Managing Director Annastacia Kimtai highlighted the strategic importance of the deal in meeting the bank’s sustainability targets.
“We are looking to strengthen our capacity in supporting customers focusing on green projects. This partnership marks a significant milestone in our sustainability journey as it reinforces our commitment to scale up green lending and enable us to deepen our impact, catalyse private investment and support Kenya’s goal of achieving net-zero emissions by 2050,” noted Ms. Kimtai.
The agreement follows a strong performance in sustainable lending by the bank. In the previous year alone, KCB disbursed $402 million in green loans, increasing the share of its green portfolio to 21.32 percent, up from 15 percent in 2023. This funding has supported a variety of energy transition products, including ventures in the blue economy, e-mobility, and climate adaptation technologies.
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