Kenya is stepping up efforts to mobilise financing for green businesses and climate-friendly investments as the government and development finance institutions seek to bridge a widening funding gap for sustainable economic development.
The push is led by the Kenya Development Corporation (KDC), which has unveiled its first sustainability and green financing strategy with USD 42 million already mobilized for green investments while seeking additional capital through partnerships and international climate-financing institutions.
KDC Director General Norah Ratemo said the corporation is seeking accreditation with the Green Climate Fund (GCF) to boost its capacity to mobilize resources and its new green fund would provide both debt and equity financing to businesses seeking to adopt environmentally friendly procedures.
Principal Secretary for Environment, Climate Change and Forestry, Festus Ng’eno, said the move is part of a broader change in how climate action is perceived, with sustainability increasingly being seen as an economic priority and not just an environmental issue.
“Sustainability strategy is not just an environmental agenda. We are looking at it from the economic perspective,” Ng’eno said.
Ratemo said KDC’s initial USD42 million mobilisation would form the starting point for a broader fundraising drive targeting both businesses that are already green and those seeking to transition to greener operations.
“We are looking to mobilize more capital and, as the PS has mentioned, there are various institutions that we can partner with in terms of raising this capital,” she said.
She said the green fund would go beyond conventional lending by providing equity to businesses that may be too highly leveraged to take on additional debt.
“We’re just not doing that; we’re also going to do equity because businesses are really struggling, I know, highly leveraged,” Ratemo said.
This approach comes as Kenya faces a significant climate-financing shortfall, with estimates putting the country’s annual requirement at about USD62 billion, compared to the roughly 13 per cent that can currently be mobilised through the National Treasury.
Ng’eno welcomed KDC’s strategy, saying greater participation by State corporations and the private sector would help expand the resources available for climate action while supporting economic transformation.
He said KDC could also pursue financing through the Green Climate Fund, the Adaptation Fund and the Global Environment Facility, adding that stronger sustainability frameworks would help position Kenya to access these resources.
