KENYA – The Central Bank of Kenya (CBK) and the European Investment Bank (EIB) have launched a novel climate finance initiative to bolster engagement by Kenyan financial institutions in financing climate-related investments.
The aim is to enable commercial banks to mobilize climate finance crucial to achieving a net-zero economy and fortifying the climate resilience of Kenya’s financial systems.
This two-year technical assistance scheme in Kenya marks the first of its kind in East Africa under the European Investment Bank’s Greening Financial Systems Program.
The initiative is financed by the German government through the dedicated International Climate Initiative Fund (IKI Fund).
The initiative aims to serve as a blueprint for mobilizing climate finance by addressing barriers that impede the involvement of commercial banks.
It will enable the Central Bank of Kenya to integrate climate risk considerations into the Kenyan regulatory framework.
Additionally, it seeks to augment the impact of climate-related investments by developing a green taxonomy for the financial sector, supporting the expansion of environmentally friendly investments in line with the goals of the 2015 Paris Climate Agreement.
This program under the Greening Financial Systems initiative will assist Kenyan banks and financial institutions in adopting climate finance best practices across their operations.
It aims to stimulate fresh funding for green projects, and enhance the evaluation, monitoring, and reporting of climate-related risks.
The program aligns with the urgent call to action voiced at COP 28 in Dubai, emphasizing the necessity to mobilize climate finance. It contributes to global endeavors to limit global temperature increases and adapt to the repercussions of climate change.
EIB Vice President, Thomas Östros, highlighted ongoing efforts to comprehend the obstacles hindering green financing in Kenya.
He stressed the significance of scaling up climate finance to fuel the green transition and mitigate the effects of climate change.
Östros underscored challenges such as the scarcity of long-term funding aligned with the lifespan of green investments, perceived higher risks in climate investment, and limited experience in originating and overseeing climate finance.
Governor of the Central Bank of Kenya, Dr. Kamau Thugge, emphasized the commitment to greening the Kenyan financial sector.
He outlined efforts by the CBK to facilitate the integration of climate-risk considerations into the governance, strategy, risk management, and disclosure frameworks of commercial banks.
The EIB’s Finance in Africa Report 2023 emphasized the escalating prevalence of climate risks in bank balance sheets, making climate a pivotal aspect of risk assessments for new loans and existing portfolios.
The report revealed an increasing number of African banks adopting climate change strategies and expanding their green finance product offerings.
Over the past decade, the European Investment Bank, a global leader in climate financing, has significantly contributed to enhancing the climate finance expertise of over 40,000 African financial professionals.
Moreover, it has provided over €534 million (KES88 billion) for private sector investments in Kenya in partnership with local businesses, banks, financial institutions, and microfinance entities.
For all the latest packaging and printing industry news from Africa and the World, subscribe to our NEWSLETTER, follow us on Twitter and LinkedIn, like us on Facebook, and subscribe to our YouTube channel.
Be the first to leave a comment