KCB-GCF Deal Aligns with Kenya’s Climate Action Plan
KCB Bank Kenya has secured approval for a $96.9 million (KShs. 12.5 billion) financing facility from the Green Climate Fund, in a move aimed at unlocking access to climate finance for Micro, Small and Medium Enterprises (MSMEs) and farmers.
The funding, structured as a blended finance package combining concessional loans, a guarantee and a grant under the Climate Smart Technology (CST) programme, is designed to address one of the biggest barriers to climate action—limited access to affordable financing.
The facility will support value-chain and gender-inclusive interventions across sectors such as solar-powered technologies, clean cooking, climate-smart agriculture, waste management, circular economy and energy efficiency. These investments are expected to help communities build resilience, improve productivity and transition to low-carbon practices.
Of the total investment, about 60 percent will go towards adaptation, particularly in climate-resilient agriculture and water management technologies, while 40 percent will support mitigation through renewable energy and energy efficiency solutions.
Through the programme, KCB plans to roll out flexible credit products, blended finance structures and digital lending platforms to scale access to underserved populations, especially in rural areas where climate vulnerability is highest.
KCB Group Chief Executive Officer Paul Russo said the initiative is designed to ensure that small businesses and farmers are not left behind in the transition to a climate-resilient economy.
“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.
Catherine Koffman noted that the project directly tackles financing constraints that have long hindered climate action among small-scale players.
“The 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 MSMEs and farmers to adopt solutions that strengthen resilience, productivity and long-term economic stability,” she said.
The financing comes at a time when Kenya is grappling with heightened climate risks, with over 80 percent of its landmass classified as arid and semi-arid. Frequent droughts and floods continue to cause economic losses estimated at about 3 percent of GDP annually.
With nearly half of the population living below the poverty line and agriculture employing 70 percent of the rural workforce, access to climate-smart technologies and financing remains critical. Heavy reliance on rain-fed agriculture further exposes farmers to unpredictable weather patterns.
The programme aligns with Kenya’s National Climate Change Action Plan (NCCAP) III 2023 and the updated Nationally Determined Contribution (NDC), positioning the initiative within the country’s broader climate policy framework.
KCB Group said the facility builds on its expanding green financing portfolio. Last year, the bank assessed loans worth KShs. 578.3 billion for environmental and social risks, bringing cumulative assessments since 2020 to over KShs. 1 trillion. It also disbursed KShs. 50 billion in green loans, growing its green portfolio to 25.84 percent from 15 percent in 2023, supporting sectors such as e-mobility, blue economy and climate adaptation.