KCB Bank Kenya Secures $96.9 Million Green Climate Fund Approval to Finance MSMEs and Farmers
KCB Bank Kenya has received approval for a $96.9 million (KShs. 12.5 billion) financing facility from the Green Climate Fund (GCF) to expand access to climate-smart technologies for micro, small and medium enterprises and smallholder farmers across Kenya.
The blended finance package, combining concessional lending, a guarantee, and a grant, will be deployed under the Climate Smart Technology programme. It will target Kenya’s most climate-vulnerable communities through a mix of solar energy, clean cooking technologies, climate-smart agriculture, waste management, and energy efficiency interventions.
Roughly 60 percent of the investments will go toward adaptation measures, including climate-resilient agriculture and water management, while the remaining 40 percent will fund mitigation technologies such as renewable energy and energy efficiency upgrades.
KCB Group CEO Paul Russo said the facility was designed with inclusion at its core. “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.
The approval arrives against a stark backdrop. More than 80 percent of Kenya’s landmass is classified as arid or semi-arid, with climate-related hazards estimated to cost the country 3 percent of GDP annually. Agriculture accounts for 26 percent of GDP and employs 70 percent of the rural workforce, making the sector acutely exposed to erratic rainfall and prolonged drought.
Catherine Koffman, Director of the GCF’s Africa Region Department, said the facility tackled one of the most persistent barriers to climate action in developing economies, access to finance for small businesses and farmers. She added that the structure was designed to crowd in private capital and derisk climate-smart investments at scale.
“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 climatesmart 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.” she said.
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.
The deal builds on KCB Group’s broader green finance push. The bank disbursed KShs. 50 billion in green loans last year, growing its green portfolio from 15 percent in 2023 to 25.84 percent. It also assessed KShs. 578.3 billion in loans for environmental and social risks in the same period, bringing the cumulative total assessed under its Environmental and Social Due Diligence process to over KShs. 1 trillion since 2020.
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