Domestic sources are expected to provide 19 per cent, equivalent to $2.1 billion (Sh273 billion) annually, with the balance coming from international support. Kenya Bankers Association chairman and KCB Group CEO Paul Russo, NETFUND chief executive Samson Toniok and KBA chief executive Raimond Malonje during the KBA Sustainable Finance Summit and launch of the Banking Industry Roadmap to accelerate sustainable finance/ HANDOUT BANKS in Kenya are under pressure to identify bankable projects while addressing high investment risks and unsuitable lending to unlock Sh7.3 trillion in climate financing over five years.
According to an industry study, banks must develop innovative financing products, strengthen project preparation and mobilise partnerships to unlock sustainable investments. This, as Kenya launches the Banking Industry Sustainable Finance Roadmap 2027–2037. The roadmap identifies inadequate feasibility studies, limited borrower information, insufficient collateral, unpredictable cash flows and high project preparation costs as key barriers preventing sustainable investments from attracting financing.
Kenya’s Nationally Determined Contribution (NDC) 3.0 estimates climate financing needs at approximately $56 billion (Sh7.28 trillion) between 2031 and 2035, translating to an average of $11.2 billion (Sh1.46 trillion) annually. Domestic sources are expected to provide 19 per cent, equivalent to $2.1 billion (Sh273 billion) annually, with the balance coming from international support and carbon markets.
The Kenya Bankers Association (KBA) says banks, which hold more than 90 per cent of financial sector assets, will play a critical role in mobilising capital towards the country’s sustainable development priorities. However, uncertainty over project performance, technology, weather-related risks and execution continues to discourage lenders, while conventional loan tenors, pricing and collateral requirements often fail to accommodate green investments.
The roadmap proposes developing bankable project pipelines, introducing development finance institution-backed guarantees and blended financing facilities, and expanding innovative lending products for agriculture and micro, small and medium-sized enterprises (MSMEs).
A project preparation facility is also proposed to screen priority investments, fund pre-feasibility studies and connect projects with investors.