NAIROBI, Kenya — The Global Green Growth Institute (GGGI) and the Kenya Bankers Association (KBA) have signed a five-year Memorandum of Understanding (MoU) aimed at expanding sustainable finance, green investment and inclusive green growth in Kenya.
The partnership establishes a framework for collaboration between the two institutions to accelerate the integration of environmental, climate and sustainability considerations into Kenya’s financial sector while helping mobilise public and private capital for sustainable development.
The agreement was signed by Nagnouma Kone, GGGI Manager for Africa Strategy and Partnerships and Head of the Kenya Office, and Raimond Molenje, Chief Executive Officer of KBA.
The signing took place in Nairobi during the launch of the International Climate Initiative (IKI)-funded SYMBIOTIC Project.
Partnership targets sustainable finance gap
The agreement comes as Kenya works to advance its biodiversity commitments while seeking greater private-sector participation in financing sustainable development.
GGGI said the partnership will help address a persistent disconnect between businesses seeking financing and financial institutions looking for investment-ready projects.
Kone said many entrepreneurs complain that banks are reluctant to lend, while lenders often point to a shortage of bankable green projects.
“For too long, entrepreneurs have said banks are not lending, while banks have said there are not enough bankable green projects,” Kone said.
She said the partnership would bring together small and medium-sized enterprises (SMEs), financial institutions and public-sector actors to develop practical transactions capable of supporting Kenya’s green transition.
Women-led businesses among target beneficiaries
The partnership will also focus on barriers that prevent businesses from accessing sustainable finance.
According to GGGI, many SMEs, particularly women-led businesses, continue to face difficulties accessing finance because of perceived risks associated with lending to them.
At the same time, commercial lenders frequently cite a shortage of projects that meet the requirements for financing.
Through the new partnership, GGGI and KBA will seek to strengthen engagement between financial institutions, businesses and government agencies while developing sustainable finance solutions that reflect market conditions.
The two organisations also intend to help businesses understand and meet the requirements needed to make their projects more attractive to lenders and investors.
Green loans and sustainability-linked bonds
The partnership will explore financing instruments that can channel more capital into environmentally sustainable and biodiversity-positive investments.
These will include green loans, sustainability-linked bonds and other innovative financial products.
GGGI said the collaboration will also support efforts to reduce the risks associated with green lending and improve understanding of nature-positive investments.
The aim is to make it easier for financial institutions to assess and finance projects that contribute to climate resilience, environmental protection and sustainable economic growth.
KBA backs sustainable finance partnership
KBA CEO Raimond Molenje welcomed the agreement, saying the banking sector has an important role to play in financing Kenya’s sustainable development ambitions.
“Kenya’s banking sector has a critical role to play in financing the country’s sustainable development ambitions,” Molenje said.
He said the partnership would help strengthen market readiness and institutional capacity while supporting practical financing solutions capable of unlocking investment in sustainable and green growth opportunities.
The collaboration is expected to bring financial institutions and businesses closer together while improving the pipeline of projects seeking sustainable financing.
Joint training and technical assistance
Under the five-year agreement, GGGI and KBA will work on several areas, including sustainable finance policies, market practices, green investment and capacity building for financial institutions.
The institutions will also support the development of bankable investment opportunities and facilitate dialogue among stakeholders across the financial sector and wider economy.
Planned activities include:
- Joint technical assistance programmes
- Training and capacity-building initiatives
- Research and knowledge sharing
- Development of bankable green investment opportunities
- Investment facilitation
- Stakeholder dialogue on sustainable finance
The programmes are intended to strengthen the ability of financial institutions and businesses to identify, structure and finance sustainable investment opportunities.
Five-year collaboration to mobilise capital
The MoU marks the beginning of a five-year collaboration bringing together financial institutions, government agencies, development partners, investors and private-sector actors.
The partners intend to use the collaboration to advance sustainable finance solutions and mobilise capital towards Kenya’s green growth priorities.
