KCB Bank Kenya is seeking to tap Sh15.2 billion ($118.25 million) from the Green Climate Fund to support lending to small and medium enterprises (SMEs) offering climate smart solutions.
The bank has received Sh69 million ($554,000) from the fund to help it plan for the absorption of disbursements from the larger facility expected in 2025.
KCB is expected to use the pre-facility known as a Project Preparatory Facility to conduct a programme feasibility study, assess climate risks and vulnerabilities and create an operations manual for the climate smart technology facility.
“This milestone represents a significant step forward. By empowering our MSMEs with climate-smart technologies, we are taking decisive action to tackle environmental jobs while fostering local economic growth and creating sustainable jobs within our communities,” said KCB Group CEO Paul Russo.
“We believe by investing in sustainable practices, we can build a brighter, more resilient future for all.”
The deal was reached during the 29th conference of parties to the United Nations Framework Convention on Climate Change (COP29).
The tapping of the pre-facility presents KCB efforts to blend its financing and contribute to sustainable development and climate resilience.
KCB Bank Kenya became the first financial intermediary in the region to be accredited by the United Nations Green Climate Fund (GCF) for green financing.
The accreditation in 2020 allowed it to develop concept notes for future sustainability linked loan approvals from the GCF.
The UN backed GCF is the largest fund dedicated to help fight climate change. The fund structures its financial support through a flexible combination of grant, concessional debt, guarantees or equity instruments.
The fund also leverages blended finance to crowd-in private investment for climate action in developing countries.