KCB Secures KSh 12.5 Billion Climate Financing to Support Farmers and SMEs in Kenya

Nairobi, Kenya — KCB Bank Kenya has secured approval for a $96.9 million (KSh 12.5 billion) financing facility from the Green Climate Fund, marking a major step toward accelerating climate-smart investments for small businesses and farmers across the country.

The funding, structured as a blended finance package combining concessional loans, grants, and guarantees, will support climate-resilient technologies and low-carbon solutions, particularly for micro, small, and medium enterprises (MSMEs) and smallholder farmers.

The initiative comes at a critical time when Kenya continues to grapple with climate shocks that threaten livelihoods and economic stability.

Targeting farmers and small businesses

KCB said the financing will focus on expanding access to climate-smart technologies, including solar-powered solutions, clean cooking systems, and sustainable agricultural practices.

The program will also support waste management, circular economy initiatives, and energy efficiency improvements aimed at boosting productivity while reducing environmental impact.

“This is a bold step to scale climate finance,” said KCB Group CEO Paul Russo. “By targeting MSMEs and smallholder farmers, we are ensuring that no one is left behind in the transition to a climate-resilient future.”

He added that the bank aims to empower vulnerable communities with tools and financing to withstand climate-related risks and improve long-term economic outcomes.

Balancing adaptation and mitigation

According to the bank, approximately 60 percent of the funds will be directed toward climate adaptation, particularly in agriculture and water management.

The remaining 40 percent will support mitigation efforts, including renewable energy adoption and energy efficiency projects.

The strategy reflects Kenya’s dual need to both respond to immediate climate risks and reduce long-term emissions.

“By crowding in private capital and derisking climate-smart investments, GCF finance will empower Kenya’s MSMEs and farmers,” said Catherine Koffman of the Green Climate Fund.

She noted that access to finance remains one of the biggest barriers to climate action, especially for small enterprises and rural communities.

Why the funding matters now

Kenya is among the countries most vulnerable to climate change, with more than 80 percent of its land classified as arid or semi-arid.

Frequent droughts and floods have caused economic losses estimated at about 3 percent of GDP annually, affecting agriculture, food security, and livelihoods.

At the same time, nearly half of the population lives below the poverty line, while agriculture contributes about 26 percent to the economy and employs the majority of the rural workforce.

These realities make access to climate-smart solutions both urgent and essential.

The new financing is expected to bridge gaps in access to affordable technologies and funding, particularly for underserved populations.

Expanding KCB’s green finance footprint

The deal builds on KCB’s growing role in sustainable finance across East Africa.

The bank has increasingly integrated environmental and social considerations into its lending, assessing loans worth over KSh 578 billion for environmental risks in the past year alone.

Since 2020, the total value of loans assessed under its environmental and social due diligence framework has exceeded KSh 1 trillion.

KCB has also disbursed KSh 50 billion in green loans, expanding its green portfolio significantly in recent years.

The funding aligns with Kenya’s broader climate goals, including the National Climate Change Action Plan and its international commitments under the Paris Agreement.

Driving inclusive climate action

Beyond environmental benefits, the initiative is expected to deliver social and economic gains by improving incomes, enhancing resilience, and creating new opportunities in green sectors.

KCB says it will leverage digital lending platforms and flexible credit solutions to ensure the funds reach communities that have traditionally been excluded from formal financing.

The focus on gender inclusion and value-chain development is also expected to widen the impact of the program.

As Kenya positions itself as a leader in climate action, partnerships like this highlight the growing role of financial institutions in driving sustainable development.