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KCB Secures KSh 12.5 Billion Climate Fund to Boost Green Financing for SMEs and Farmers
KCB Group Plc has secured a $96.9 million (KSh 12.5 billion) facility from the Green Climate Fund to scale climate financing in Kenya.
The funding targets micro, small and medium enterprises (MSMEs) and smallholder farmers. These groups face the highest climate risks. However, they often struggle to access financing.
As a result, the new facility aims to close this gap while supporting Kenya’s transition to a low-carbon economy.
Driving Access to Climate-Smart Solutions
KCB will deploy the funding through a blended finance model. This includes concessional loans, guarantees, and grants.
This structure lowers risk for investors. At the same time, it attracts more private capital into green projects.
The bank will channel funds into solar energy, clean cooking, climate-smart agriculture, and waste management. These solutions will help businesses cut costs and improve productivity.
In addition, they will support a shift toward sustainable practices.
Notably, 60% of the funding will go into climate adaptation. This includes resilient agriculture and water systems. Meanwhile, the remaining 40% will support mitigation efforts such as renewable energy and energy efficiency.
Addressing Kenya’s Climate and Economic Risks
Kenya continues to face significant climate challenges.
More than 80% of the country is arid or semi-arid. Therefore, many communities face frequent droughts and floods. These shocks reduce incomes and disrupt food production.
At the same time, agriculture contributes about 26% of GDP. It also employs nearly 70% of the rural population.
However, most farming depends on rainfall. As weather patterns become unpredictable, risks continue to rise.
In addition, many MSMEs and farmers lack access to climate-smart technologies. They also face limited financing options.
KCB Group CEO Paul Russo said the programme will focus on inclusion.
“This is a bold step to scale climate finance. We want to ensure MSMEs and farmers can adapt and grow,” he said.
KCB Secures KSh 12.5 Billion Climate Fund to Boost Green Financing
Unlocking Investment Through Partnerships
The partnership also addresses a major barrier access to capital.
According to Catherine Koffman of the Green Climate Fund, the initiative will crowd in private investment. It will also reduce risk for climate-focused projects.
As a result, more businesses and farmers can adopt solutions that improve resilience and productivity.
KCB will also use digital lending platforms to reach more customers. This approach will help scale financing faster and more efficiently.
Building on KCB’s Green Finance Growth
The new facility builds on KCB’s growing focus on sustainable finance.
In 2025, the Group assessed loans worth KSh 578.3 billion for environmental and social risks. Since 2020, this figure has crossed KSh 1 trillion.
At the same time, KCB disbursed KSh 50 billion in green loans. Consequently, its green portfolio grew to 25.84%, up from 15% in 2023.
These investments support renewable energy, e-mobility, and climate adaptation.
Aligning with National Climate Goals
The programme aligns with Kenya’s climate strategy.
It supports the National Climate Change Action Plan and the country’s global climate commitments.
More importantly, it reflects a wider shift in banking. Financial institutions are now integrating sustainability into core operations.
For KCB, this move goes beyond financing. Instead, it positions the bank at the centre of East Africa’s green transition.
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