A new initiative to unlock climate finance and boost best practice has been launched by the European Investment Bank (EIB) and Kenya.
It aims to strengthen Kenyan financial institutions’ commitment to financing climate-related investment and enable commercial banks to mobilise climate finance to support a net zero economy.
The two-year Kenyan technical assistance scheme is the first of its kind to be implemented in East Africa under the European Investment Bank’s Greening Financial Systems programme, financed by the German Government through the dedicated International Climate Initiative Fund (IKI Fund).
It will help Kenyan banks and financial institutions to better embrace climate finance best practice across all activities, catalyse new funding for green projects and better assess, monitor and report on climate-related risks.
The latest survey from EIB found 59% of banks in Africa have a climate change strategy and a further 22% plan on introducing one.
EIB Vice-President Thomas Östros said: “As highlighted by world leaders at COP28, scaling up climate finance is essential to mobilise new investment to boost the green transition and help reduce the impact of climate change. Barriers remain that hold back the full engagement of banks in climate-dedicated finance. It is hindered by the lack of long-term funding that matches the economic life of green investments, the higher perceived risk of climate investment and limited experience of how to originate and monitor climate finance.
“This new technical best practice partnership with the Central Bank of Kenya builds on the European Investment Bank’s long-standing partnership with Kenyan financial institutions to increase the impact of climate finance and unlock investment that better protects infrastructure and business from climate change.”