Kenya ranks 150th on the ND-GAIN Climate Vulnerability Index, with micro, small and medium-sized enterprises (MSMEs) and farmers particularly exposed to intensifying droughts, floods, heat stress, and erratic rainfall. Their heavy reliance on climate-sensitive production systems, combined with lock-in to fossil-fuel- and biomass-intensive practices, undermines resilience and drives greenhouse gas emissions. Significant financial and non-financial barriers prevent these groups from investing in the climate-resilient solutions they need.

The project aims to establish and demonstrate a scalable, de-risked local currency lending facility enabling Kenya Commercial Bank (KCB), serving as both Accredited Entity and Executing Entity, to sustainably expand climate finance to the country's most climate-vulnerable MSMEs and farmers. Through a blended structure and targeted technical assistance, the programme seeks to overcome structural financial and credit risk barriers that currently prevent lending to high-risk, underserved segments.

Structured around three components, the programme will establish a Climate-Smart Technology lending facility; strengthen KCB's climate impact and risk assessment frameworks and build capacity among loan officers, suppliers, and beneficiaries; and enhance institutional systems and knowledge sharing to scale climate-smart finance beyond the programme. 

It is expected to directly benefit 112,145 people and indirectly reach over 823,547, with activities primarily focused on the 34 most climate‑vulnerable counties in Kenya, where approximately 90 per cent of programme resources will be directed. The programme is aligned with Kenya’s Nationally Determined Contributions (NDCs), National Adaptation Plan (NAP), Vision 2030 and Green Economy Strategy.

Scaling climate-smart solutions for hardest-to-reach MSMEs and farmers in Kenya (CST Facility)

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Gender action plan for FP292: Scaling climate-smart solutions for hardest-to-reach MSMEs and farmers in Kenya (CST Facility)

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Justice is the ethical and political framework that addresses fairness, including issues of responsibility, rights, and structural inequity.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

A loan is a policy instrument where funds are provided to a borrower with the expectation of repaying the principal plus interest.

Financial actors and resources that are primarily directed towards climate change mitigation, adaptation and compensation.

Dedicated pool of financial resources for climate-related projects.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

Conditions that enhance the feasibility of adaptation options. Enabling conditions include finance, technological innovation, strengthening policy instruments, institutional capacity, multi-level governance and changes in human behaviour and lifestyles.

Social inclusion is the process of improving the terms on which individuals and groups take part in society—improving the ability, opportunity, and dignity of those disadvantaged on the basis of their identity.

People whose health, both mental and physical, makes them more vulnerable to the effects of climate change

woman and genders outside of the gender binary

This sector involves activities that impart knowledge and skills to individuals, including formal schooling, vocational training and educational support.

Activities of businesses and institutions that provide financial services and products to individuals and organisations.

the fair distribution of risks and opportunities of climate change and the transition to a regenerative economy, cognisant in particular of disproportionate impacts on vulnerable communities and the working class

Procedural justice means ensuring that decision making is safe, transparent and inclusive, emphasizing the agency and influence of vulnerable groups and those most impacted.

Gender action plan for FP292: Scaling climate-smart solutions for hardest-to-reach MSMEs and farmers in Kenya (CST Facility)

Policy instrument

Impacted group

Just transition

Climate justice

Economic sector

Adaptation/resilience

Finance

Adaptation Fund

Climate Investment Funds

Green Climate Fund

Global Environment Facility