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UK announces funding to unlock fifty green projects in Kenya

Thursday 24 April – The UK has announced funding to kick-start the development of fifty green investment projects across Kenya. The funding was guided by the County Green Finance Assessment, which was launched today at an event in Nairobi.

The report, funded by the UK, assesses the ability of ten counties from across Kenya to access green finance. It will empower counties to direct investment towards sectors in most need of support, which could include water, healthcare, or energy infrastructure. These could deliver economic returns whilst meeting the specific needs of local communities.

The uplift in funding from £3.1m to £6.6m will mostly support Kenyan counties to develop these fifty projects and secure financing to make them a reality. These green investments could also create jobs and grow local economies, whilst simultaneously protecting Kenya’s incredible biodiversity and unique landscapes.

It will also support the development of new financial solutions to increase access to affordable, green, quality, housing – including associated infrastructure and services.

The analysis was produced by Financial Sector Deepening Kenya, an independent trust set-up and supported by the UK government to deliver financial solutions to the real-world challenges facing Kenya. They will also provide the support to counties to develop and implement projects.

The County Green Finance Assessment analysed each county based on four criteria including financial performance, credit risk, the availability of green investment opportunities and the counties’ abilities to manage green finance.

The report is an African product for Africa, developed with Africa’s first and only credit-rating agency certified to perform verification of green bonds, projects and assets – Agusto & Co.

They have partnered on the project along with the Capital Markets Authority, the ADA Consortium, and the Nairobi Securities Exchange. The assessment was completed with the approval of The National Treasury and Economic Planning.

Leigh Stubblefield, Development Director at the British High Commission Nairobi, said:

As flooding causes disruption across Kenya, we can see clearly how the countries that are least responsible for climate change are the worst affected. We admire Kenya’s impressive climate credentials and are proud of our climate partnerships.

This report and funding are long-term commitments to find quality, long-term solutions. I encourage countries to use the report to continue along the path of green growth, so together we can protect our people, planet, and prosperity. We go far when we go together.

Tamara Cook, CEO at FSD Kenya, said:

The assessment of the green opportunity in counties illuminates the immense natural asset base that needs to be managed, protected and preserved. It is also clear that core government services such as water, energy, waste management and transport provide valuable avenues for green investment possibilities where there is growing demand. The next step will be to prepare green projects with counties so that green funding can be directed towards local development priorities in a manner that creates lasting impact.

The 10 counties included are Embu, Kirinyaga, Kisumu, Laikipia, Nairobi, Makueni, Nandi, Taita-Taveta, Vihiga, and Wahir.

FSD Kenya has previous experience of supporting Kenyan counties. They worked together on the County Climate Change Fund (CCCF) mechanism which has already helped counties to allocate more than KES 636 million towards green projects in local communities.

The uplift in funding will also support the development of new financial solutions to increase access to affordable, green, quality, housing – including associated infrastructure and services.

This report supports the UK-Kenya Strategic partnership – an ambitious five-year agreement delivering mutual benefits for the UK and Kenya, including job creation and economic growth.

Notes to Editors

Assessment Criteria

The assessment focused on the following:

  • Economic and fiscal assessment to gauge a county’s fiscal performance, strengths, challenges, and ability to take on (additional) debt.

  • Credit risk assessment to estimate the county government’s relative likelihood of defaulting on its obligations from the listing.

  • Green asset and activity assessment to evaluate availability of green investment opportunities and assets in the selected counties.

  • Green finance capability assessment to analyse a county government’s ability to manage green financial instruments and related projects.

The UK-Kenya Strategic Partnership

The UK-Kenya strategic partnership joint statement can be found here.

About FSD Kenya

Financial Sector Deepening Kenya (FSD Kenya) is an independent trust dedicated to the achievement of a financial system that delivers value for a green and inclusive digital economy while improving financial health and capability for women and micro and small enterprises (MSEs). We work closely with the public sector, the financial services industry, and other partners to develop financial solutions that better address the real-world challenges that low-income households, micro and small enterprises, and underserved groups such as women and youth face. More:

About Augusto & Co

Agusto & Co. is registered as a credit rating agency by the Kenyan and Rwandan Capital Markets Authorities and the Securities Exchange Commission in Nigeria. Agusto & Co. is also Certified as an Approved Verifier by the Climate Bond Standards Board as the first company of African origin to have the capabilities to perform verification of green bonds, projects, and assets in Africa.

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