The International Finance Corporation (IFC) is committed to climate finance in Kenya. The World Bank Group’s private sector financing arm has signed a partnership with the Commercial Bank of Kenya (KBC). Under the recently signed agreement, IFC will provide $150 million in loans to the Nairobi-based bank.
According to the IFC, the commercial bank will use the loan to expand its climate finance portfolio. The Washington, D.C.-based international financial institution intends to further assist the bank in developing a climate finance strategy and building its capacity to assess climate risks. With the USD 150 million financing, KBC is already targeting several key sectors including renewable energy, energy efficiency, green buildings and other climate-smart projects.
Financing for the climate emergency
This commitment to climate finance should support the Kenyan government’s ambition to reduce greenhouse gas (GHG) emissions by 32% by integrating climate change adaptation into national and county development planning by 2030. At the same time, Nairobi needs to put in place concrete and rapid measures to support the adaptation of people and the economy to climate change.
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Located in the Horn of Africa, Kenya is among the countries most affected by climate change, which is exacerbating the drought caused by the La Niña phenomenon. And according to the World Bank, the drought that has been affecting the north of the country for almost five years is affecting the livelihoods of more than 5 million people, who are now at risk of famine. And in response to this situation, KBC will rely on the private sector.
“The private sector can play an important role in mobilising financial resources to help finance the country’s green transition,” says Amena Arif, IFC’s Country Director for Kenya. The international financial institution is making its second climate finance loan to Kenya since the beginning of 2022. In May, the World Bank Group subsidiary joined forces with the Netherlands Development Finance Corporation (FMO) and British International Investment (BII) to provide a $165 million loan to Equity Bank Kenya. The Equity Group Holdings subsidiary will support climate action in Kenya through small and medium-sized enterprises (SMEs).
Jean Marie Takouleu