Nairobi — The African Development Bank Group (AfDB) has signed a $150 million (Sh19.3 bn) financing package with KCB Bank Kenya to expand green lending and strengthen the lender's trade finance operations amid rising capital needs in climate-aligned sectors.
The facility includes $100 million (Sh12.9bn) in subordinated debt to bolster KCB's Tier II capital and support its plan to channel at least 25 percent of its loan book to green projects by 2031, covering renewable energy, infrastructure, and agriculture.
A further $50 million (Sh6.46bn) will be provided as a transaction guarantee to offer up to 100 percent coverage to confirming banks against non-payment risks on KCB-issued letters of credit and other trade instruments.
"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," said Alex Mubiru, African Development Bank Director General for East Africa.
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"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."
AfDB said the partnership will target small and medium-sized enterprises, women-led businesses, and climate-resilient ventures, with expected gains in access to long-term financing, job creation, and improved resilience to external shocks.
It follows what the Bank described as a rigorous due-diligence process to ensure the facility aligns with its mandate as a counter-cyclical financier.
KCB has in recent years increased its exposure to climate-aligned projects as lenders face tightening global expectations to integrate sustainability into core business.
The bank disbursed $402 million (Sh51.9bn) in green loans last year, raising its green portfolio to 21.32 percent from 15 percent in 2023.
Funding went to initiatives supporting energy transition, the blue economy, e-mobility and climate adaptation.
"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."
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