Kenyan banks unveil roadmap to unlock KSh 7.3 trillion in climate financing
The Kenya Bankers Association launched a 2027-2037 sustainable finance roadmap in Nairobi on Tuesday. It targets weak project preparation, scarce data and rigid loan terms that keep banks away from green investments.
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…
Read more 3 min read