NAIROBI,Kenya, Sep 4- Kenya’s banking sector is set to play a bigger role in financing climate and biodiversity projects under a new five-year partnership aimed at turning more green businesses into investment-ready ventures.
The Global Green Growth Institute (GGGI) and the Kenya Bankers Association (KBA) on Thursday signed a Memorandum of Understanding (MoU) to strengthen sustainable finance, green investment and inclusive green growth in Kenya.
The partnership seeks to address a persistent financing gap in which businesses struggle to secure funding for green projects while lenders say they lack sufficiently bankable opportunities.
“For too long, entrepreneurs have said banks are not lending, while banks have said there are not enough bankable green projects. This partnership is about closing that gap,” said Nagnouma Kone, GGGI’s Manager for Africa Strategy and Partnerships and Head of Kenya Office.
“We are bringing together SMEs, financial institutions, and public sector actors to move beyond discussion and create real transactions that accelerate Kenya’s green transition.”
The agreement was signed by Kone and KBA Chief Executive Officer Raimond Molenje during the launch of the International Climate Initiative (IKI)-funded SYMBIOTIC Project in Nairobi.
The collaboration comes as Kenya seeks to implement its biodiversity commitments while increasing private-sector participation in financing sustainable development.
GGGI said small and medium-sized enterprises, particularly women-led businesses, continue to face difficulties accessing finance because of perceived risks, while commercial lenders frequently cite a shortage of bankable green projects.
The partnership will therefore focus on helping businesses meet bankability requirements while working with financial institutions to develop financing products suited to green and nature-positive investments.
It will also explore mechanisms to de-risk green lending and expand the use of instruments such as sustainability-linked bonds and green loans to channel more private capital into climate and biodiversity projects.
Molenje said the banking industry has a central role in helping Kenya meet its sustainable development ambitions.
“Kenya’s banking sector has a critical role to play in financing the country’s sustainable development ambitions,” he said.
“This partnership provides an opportunity to strengthen market readiness, build institutional capacity, and support the development of practical financing solutions that can unlock investment into sustainable and green growth opportunities across the economy.”
Under the five-year agreement, GGGI and KBA will work on sustainable finance policies and market practices, promote green investment and strengthen the capacity of financial institutions to assess and finance sustainable projects.
The two organisations will also support the development of bankable investment opportunities and facilitate engagement between banks, businesses, government agencies, investors and development partners.
Joint technical assistance programmes, training, research and knowledge-sharing initiatives will form part of the partnership, alongside efforts to facilitate investment in Kenya’s transition towards a resilient, low-carbon and inclusive economy.
The deal comes amid growing pressure on financial institutions to incorporate environmental, climate and sustainability considerations into lending and investment decisions.
The partnership is expected to bring together financial institutions, government agencies, development partners, investors and private-sector actors to build a stronger pipeline of sustainable projects and mobilise capital towards Kenya’s green growth priorities.
