The African Development Bank Group (AfDB) has signed a $150 million financing package with KCB Bank Kenya Limited, in a move aimed at strengthening green lending and expanding trade finance capacity across the country’s small business and corporate sectors. The agreement is expected to advance climate-smart investment and contribute to Kenya’s broader transition toward a low-carbon economy.
The package includes a $100 million subordinated debt facility designed to reinforce KCB Kenya’s Tier II capital. This will support the bank’s long-term plan to allocate 25% of its loan book to green initiatives by 2031, targeting renewable energy, sustainable infrastructure, and agriculture projects. A further $50 million transaction guarantee will allow AfDB to provide up to 100% coverage to confirming banks against potential non-payment risks linked to letters of credit and similar trade finance instruments issued by KCB.
Alex Mubiru, the African Development Bank Director General for East Africa, said the partnership reflects the institutions’ joint ambition to drive environmentally responsible growth. “We are proud to partner with KCB as this facility is a testament to our shared commitment to advancing Africa’s green transition and ensuring that economic growth goes hand in hand with environmental stewardship,” he said. “KCB has demonstrated strong leadership in sustainable finance, and we are confident this collaboration will deliver measurable climate impact and inclusive development for Kenya and the region.”
According to AfDB, the collaboration will support climate-resilient ventures, women-led enterprises, and small and medium-sized businesses, helping expand access to longer-term funding while boosting job creation. The agreement follows a comprehensive due diligence process, further cementing AfDB’s position as a counter-cyclical financier and reliable development partner in the region.
KCB says the financing will help deepen its environmental commitments while strengthening its capacity to fund green projects. “We are looking to strengthen our capacity in supporting customers focusing on green projects,” KCB Bank Kenya Managing Director, Annastacia Kimtai noted. “This partnership marks a significant milestone in our sustainability journey as it reinforces our commitment to scale up green lending and enable us to deepen our impact, catalyse private investment and support Kenya’s goal of achieving net-zero emissions by 2050.”
KCB disbursed $402 million in green loans last year, increasing its green portfolio to 21.32%, up from 15% in 2023. Funding went toward products supporting energy transition and projects in the blue economy, e-mobility, and climate change adaptation.
