Background
Kenya faces significant climate challenges, with rising temperatures, erratic rainfall, and increasing frequency of extreme weather events such as droughts and floods. These changes threaten critical sectors like agriculture, water, energy, and health, which form the backbone of the country's economy and livelihood. Global and regional crises, including the COVID-19 pandemic, locust invasions, and global food supply disruptions exacerbate the vulnerability. These challenges highlight the urgent need for climate-resilient strategies to mitigate economic losses, which are projected to reach up to 2.8% of GDP annually.
To address these vulnerabilities, Kenya is advancing its climate goals under its Nationally Determined Contributions (NDCs), focusing on sustainable energy, agricultural resilience, and efficient waste management. However, financing the required USD 64.9 billion by 2030 remains a daunting task. MSMEs, which are vital to Kenya’s economy, face barriers such as limited access to financing and climate technologies. The proposed programme, led by the Kenya Commercial Bank and partners, aims to bridge this gap by providing tailored financial solutions, promoting Climate and Environmental Sound Technologies (CSTs), and prioritizing adaptation projects and gender equality. These initiatives are designed to foster sustainable growth while building resilience to Kenya's evolving climate risks.
CTCN support
The Climate Technology Centre and Network (CTCN) will provide critical support to Kenya's MSMEs by identifying and promoting suitable Climate and Environmental Sound Technologies (CSTs) for credit line financing. Leveraging its global network of technology experts and institutions, the CTCN will offer tailored technology solutions, capacity building, and policy guidance. This support aims to address the unique challenges faced by MSMEs, enabling them to adopt CSTs effectively while enhancing their resilience to climate change impacts.
Local partners – KCB and CTCN will collaborate with a wide range of local partners for the implementation of activities under components 2 and 3:
- International and local technology providers – these will provide the requisite climate smart technologies
- Financiers – these are commercial lenders comprising SME-focused banks and venture funds that are expected to provide non-grant financing via debt instruments.
- Kenya Climate Innovation Centre (KCIC) – KCIC has a strong presence in the fields of climate change and energy through the provision of holistic, country-driven support to accelerate the development, deployment and transfer of locally relevant climate and clean energy technologies.
- Ministry of Industrialization Trade and Enterprise Development – with the mandate to lead increasing the competitiveness, productivity and resilience of Kenya’s enterprises.
- National Environment Management Authority (NEMA) – the principal instrument of government in the implementation of all policies relating to the environment.
- Kenya Industrial Property Institute (KIPI) – promote and protect industrial property rights to foster innovation for sustainable development in Kenya.
- Kenya Association of Manufacturers (KAM) – Among its mandates includes supporting its members towards green manufacturing including a focus industrial Resources efficiency and carrying out energy audits for its members.
Expected outcome:
The programme is expected to achieve significant reductions in greenhouse gas emissions and enhance climate resilience among MSMEs through the adoption of Climate and Environmental Sound Technologies (CSTs) enabled by transformative financing solutions. By integrating innovative climate risk assessment tools, capacity-building efforts, and direct connections between MSMEs and CST providers, the programme will ensure impactful mitigation and adaptation outcomes. Additionally, the establishment of a Circular Economy Data Hub will foster knowledge sharing and promote sustainable development pathways, integrating circular economy principles with CST solutions to drive long-term environmental and economic benefits.