AfDB, KCB Bank Seal $150 Million Deal to Boost Green Finance and Trade in Kenya

AfDB Director General for East Africa Alex Mubiru said the partnership reflects a shared commitment to aligning economic growth with environmental stewardship.

The African Development Bank Group (AfDB) and KCB Bank Kenya Limited have signed a $150 million financing package aimed at scaling up green finance, accelerating climate-smart investments, and strengthening trade finance capacity in Kenya’s small business and corporate banking segments. The partnership supports Kenya’s climate ambitions while deepening access to long-term financing for enterprises driving sustainable growth.

The package comprises two complementary instruments. A $100 million subordinated debt facility will strengthen KCB Kenya’s Tier II capital, enhancing its balance sheet resilience and reinforcing its role as a key financial intermediary across priority sectors. This capital support underpins KCB’s strategic target to allocate 25% of its loan portfolio to green initiatives by 2031, with a focus on renewable energy, sustainable infrastructure, climate-smart agriculture, and related value chains.

In addition, a $50 million transaction guarantee will enable AfDB to provide up to 100% coverage to confirming banks against non-payment risks associated with letters of credit and similar trade finance instruments issued by KCB. This risk-sharing mechanism is expected to unlock additional trade flows, lower transaction costs, and expand access to international markets for Kenyan firms—particularly small and medium-sized enterprises (SMEs).

AfDB Director General for East Africa Alex Mubiru said the partnership reflects a shared commitment to aligning economic growth with environmental stewardship. He noted that KCB has demonstrated leadership in sustainable finance and that the collaboration is expected to deliver measurable climate outcomes alongside inclusive development benefits for Kenya and the wider region.

The financing is designed to generate tangible impacts for SMEs, women-led businesses, and climate-resilient projects. Anticipated outcomes include expanded access to long-tenor financing, job creation, improved competitiveness for exporters and importers, and greater resilience to economic and climate-related shocks. The transaction followed a rigorous appraisal and due diligence process, highlighting AfDB’s counter-cyclical role and its position as a trusted development finance partner.

KCB Bank Kenya has steadily advanced its climate action and financial inclusion agenda in recent years, aligning commercial growth with social and environmental impact. The bank’s sustainability strategy emphasizes green lending, community development, and support for sectors critical to Kenya’s transition to a low-carbon economy.

KCB Bank Kenya Managing Director Annastacia Kimtai said the facility would strengthen the bank’s capacity to support customers developing green projects. She described the partnership as a milestone in KCB’s sustainability journey, enabling the bank to scale green lending, catalyze private investment, and contribute to Kenya’s goal of achieving net-zero emissions by 2050.

The momentum in KCB’s green portfolio underscores this trajectory. In the past year, the bank disbursed $402 million in green loans, increasing the share of green assets to 21.32% from 15% in 2023. Financing supported products and projects linked to the energy transition, including renewable power, the blue economy, e-mobility solutions, and climate change adaptation measures. With AfDB’s backing, KCB is positioned to further deepen impact, broaden trade finance reach, and mobilize capital at scale for Kenya’s green and inclusive growth.