Kenyan banks are under pressure to turn climate goals into projects they can actually lend to, The Star reported. The aim is to unlock KSh 7.3 trillion in climate financing over five years. The Kenya Bankers Association (KBA) launched the Banking Industry Sustainable Finance Roadmap 2027-2037 in Nairobi on Tuesday. For ordinary borrowers, the plan could bring more small loans for solar, clean cooking and farm equipment.
Kenya's Nationally Determined Contribution (NDC) 3.0 puts climate financing needs at about $56 billion (KSh 7.28 trillion) between 2031 and 2035. That averages $11.2 billion (KSh 1.46 trillion) a year. Domestic sources are expected to cover 19 per cent, or $2.1 billion (KSh 273 billion) annually. The rest should come from international support and carbon markets.
The roadmap spells out the barriers. They include poor feasibility studies, limited borrower information, too little collateral, unpredictable cash flows and high project preparation costs. Lenders also worry about project performance, technology, weather risks and execution. Standard loan tenors, pricing and collateral rules often do not suit green investments.
To fix this, the roadmap proposes building pipelines of bankable projects. It also calls for guarantees backed by development finance institutions and for blended financing facilities. A project preparation facility would screen priority investments, fund pre-feasibility studies and link projects with investors. Farm lending would expand through cooperatives and anchor buyers, backed by seasonal repayments, agricultural insurance and technical help. Small businesses could get standardised small-ticket loans for solar energy, energy efficiency, clean cooking and productive equipment.
KBA chairman and KCB Group chief executive Paul Russo said the industry must move from commitments to practice. "The challenge before us is not simply to agree that sustainable finance matters. We must determine how to make it work in practice," he said. He added that opportunities in renewable energy, agriculture, transport, infrastructure and small businesses do not automatically become bankable projects.
KBA chief executive Raimond Molenje said banks had reached an 83 per cent compliance rate with climate-related risk disclosure rules. He said that information must now shape lending and portfolio decisions. The roadmap also proposes a shared market intelligence system to collect anonymised data on financing volumes, pricing and portfolio performance.
Environment PS Festus Ngeno said environmental protection should be treated as a core economic priority. His speech was read by National Environment Trust Fund CEO Samson Toniok. KBA developed the roadmap with the International Finance Corporation and WWF-Kenya. Implementation is set to begin in 2027, with a foundation phase running to 2032, followed by scale-up towards 2037.