KCB Bank Kenya has received approval for a $96.9 million (KShs. 12.5 billion) financing facility from the Green Climate Fund to accelerate climate-smart investments targeting Micro, Small and Medium Enterprises (MSMEs) and farmers across Kenya.
The blended finance initiative—comprising concessional lending, a guarantee and a grant—under the Climate Smart Technology (CST) programme is aimed at supporting vulnerable communities while scaling climate resilience and green growth.
The facility will fund value-chain and gender-inclusive interventions, including the adoption of solar-powered and clean cooking technologies, climate-smart agriculture, waste management, circular economy initiatives and energy efficiency improvements.
These investments are expected to help communities build resilience, improve productivity and transition to low-carbon practices.
Approximately 60 percent of the financing will be directed towards adaptation, particularly climate-resilient agriculture and water management technologies, while 40 percent will support mitigation efforts such as renewable energy and energy efficiency.
Through the facility, KCB will deploy a range of financing solutions, including flexible credit products, blended finance structures and digital lending platforms, to reach underserved populations at scale.
KCB Group Chief Executive Officer Paul Russo described the approval as a major step in scaling climate finance, noting that the initiative targets those most affected by climate change.
“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 empower these communities with the tools, technologies, and financing they need to thrive in the face of climate change threats,” he said.
The programme aligns with Kenya’s National Climate Change Action Plan (NCCAP) III 2023 and the updated Nationally Determined Contribution (NDC), reinforcing the country’s climate action commitments.
Catherine Koffman said the initiative addresses one of the biggest barriers to climate action—access to finance for small businesses and farmers.
“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 climate-smart investments, GCF finance will empower Kenya’s MSMEs and farmers to adopt solutions that strengthen resilience, productivity and long-term economic stability,” she said.
The approval comes at a time when Kenya continues to face acute climate vulnerability, with over 80 percent of its landmass classified as arid and semi-arid.
These regions frequently experience prolonged droughts and extreme flooding, resulting in economic losses estimated at about 3 percent of the country’s GDP annually.
With approximately 46 percent of Kenyans living below the poverty line, and agriculture contributing 26 percent to GDP while employing 70 percent of the rural workforce, climate disruptions continue to pose a major threat to livelihoods, food security and economic stability. Reliance on rain-fed agriculture further exposes communities to erratic weather patterns, while MSMEs and farmers often struggle to access climate-smart technologies, financing and adaptation solutions.
KCB Group said the new facility builds on its ongoing efforts in climate action, financial inclusion and sustainable development, as it seeks to create long-term value while supporting East Africa’s transition to a green and inclusive economy.
Last year, the bank assessed loans worth KShs. 578.3 billion for environmental and social risks, bringing the cumulative total since 2020 to over KShs. 1 trillion under its Environmental and Social Due Diligence (ESDD) framework. It also disbursed KShs. 50 billion in green loans, growing its green portfolio to 25.84 percent from 15 percent in 2023, supporting initiatives in energy transition, the blue economy, e-mobility and climate adaptation.