World Bank Pledges Sh5.5 Billion for Kenya’s Green Projects as Climate Finance Momentum Builds

By benadeta mwaura - Reporter

Kenya, January 22, 2026 - The World Bank has unveiled plans to inject Sh5.5 billion (about $43 million) into Kenya’s emerging green economy, further strengthening the country’s push toward sustainable investment and climate-smart enterprise growth. The announcement comes just days after a separate World Bank initiative unlocked Sh55 billion ($430 million) to support Kenyan SMEs and climate-aligned businesses, highlighting growing global support for climate finance in Kenya.

The latest financing, set to be channelled through a proposed Green Investment Fund (GIF) under the Kenya Development Corporation (KDC), will prioritise key sectors with strong potential to scale climate-aligned solutions. These include electric mobility and green transport, energy-efficient and green buildings, sustainable agriculture, and waste management and recycling solutions.

Officials say the funding reflects recognition of Kenya’s potential as a climate innovation hub, particularly in areas where policy direction, market demand, and enabling conditions are improving. “These sectors were recognised as offering strong potential for near- and medium-term deployment, supported by policy direction, market demand, and improving enabling conditions,” said representatives involved in the meeting between World Bank and KDC officials.

The funding discussions also covered Component 3 of the Kenya Jobs and Economic Transformation (KJET) Project, which aims to unlock private capital, expand access to markets and strengthen climate resilience among SMEs, as well as elements of the SAFER Project, which has already supported tens of thousands of enterprises nationwide.

The GIF, envisioned as a blended-finance vehicle, is designed not only to provide direct capital for green projects but also to attract follow-on investment from institutional and private sector players.

Initial government and development finance engagement, alongside World Bank technical support, positions the platform as a critical lever for scaling climate-smart investment across the economy. The GIF’s structure reflects earlier discussions in which Kenyan authorities sought to mobilise institutional capital, including pension funds, to anchor longer-term finance for green sectors such as sustainable transport, recycling, and low-carbon enterprise development.

Norah Ratemo, Director General of the Kenya Development Corporation, noted that progress on the GIF marks a key step toward climate-aligned enterprise growth. “Through KJET and SAFER, KDC is delivering tangible results by crowding in private capital, strengthening financial intermediaries, and expanding access to patient and affordable finance for SMEs,” she said.

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World Bank-backed programmes have already contributed to thousands of jobs and enterprise support, with nearly 38 % of beneficiaries women-owned businesses and over 25,000 jobs supported through climate-aligned initiatives, according to KDC data.

The World Bank’s Sh5.5 billion pledge adds to a growing range of climate finance initiatives in Kenya. Local banks such as Victoria Commercial Bank recently secured green financing facilities to help SMEs transition to low-carbon operations, while major deals between financial institutions and development partners are expanding green lending capacity across the economy.

Meanwhile, other development partners, including the African Development Bank and European institutions, are also unlocking funds and technical assistance to support climate- resilient infrastructure and sustainable urban projects in Kenya and across East Africa.

Together with the earlier Sh55 billion commitment aimed at SMEs, the World Bank’s latest funding announcement signals a significant scaling of climate finance in Kenya, bridging financing gaps for early-stage green enterprises while also linking large-scale sustainable infrastructure and job creation.

Analysts say that fostering deeper private sector participation, alongside well-structured public funds like the GIF, will be critical for unlocking the transformative potential of green finance. By strengthening financial intermediaries and mobilising capital at scale, Kenya stands to accelerate its transition toward a low-carbon, resilient economy that supports both environmental goals and inclusive growth.