KCB Kenya has secured a fresh Sh19.5 billion financing package from the African Development Bank Group, giving the lender more room to support women-led enterprises and expand credit to businesses developing green and renewable energy projects.
The funding is expected to strengthen the bank’s capital position and raise its ability to fund large clean-energy and infrastructure ventures across the country.
Of the total amount, Sh12.9 billion will be taken in as subordinated debt. This type of debt counts as tier two capital and boosts a bank’s overall capital strength, which determines the level of loans it can issue.
KCB already met all regulatory capital requirements by the end of September, but the additional capital will allow it to grow its loan book further, especially for customers taking up major green investments.
The bank said the financing will go directly into renewable energy, infrastructure, and agriculture projects. It added that more businesses are now shifting towards environmentally friendly options such as solar installation and building upgrades, creating a wider space for lenders to support green initiatives.
“We are looking to strengthen our capacity in supporting customers focusing on green projects,” KCB Bank Kenya MD Annastacia Kimtai said. “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,” she added.
KCB has been growing its pool of funds for loans targeting environmental sustainability and high social impact sectors, including energy, infrastructure, agriculture, health, and education.
In February, it received Sh12.9 billion from British International Investment for climate-related lending. This followed Sh27.5 billion from various global financiers last year.
In the same year, the bank disbursed Sh51.8 billion in green loans, raising its green loan share to 21.32 percent from 15 percent in 2023. These loans went to projects supporting energy transition, the blue economy, e-mobility, and climate adaptation.
KCB was also among the lenders that financed Safaricom’s Sh30 billion sustainability-linked loan, working with Absa, Standard Chartered Kenya, and Stanbic to offer the funding in two Sh15 billion tranches issued in 2023 and 2024.
The bank is targeting to push 25 percent of its total loan portfolio towards green projects by 2031. AfDB Director General for East Africa Alex Mubiru said KCB’s drive aligns with regional efforts to support climate-friendly development.
“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,” he said.
KCB will also use Sh6.45 billion from the facility to strengthen its trade finance operations. Under this arrangement, AfDB will offer guarantees to banks receiving letters of credit and other trade instruments from KCB.
Trade finance allows the bank to grow its income through commissions earned from off-balance-sheet transactions. KCB has been an active player in this area, including its involvement in the government-to-government oil deal.
