By Benadeta Mwaura - Reporter
Kenya, January 15, 2026 - The World Bank has approved approximately KSh5.55 billion (about $43 million) in funding to help Kenyan small and medium sized enterprises (SMEs) adopt climate friendly and sustainable technologies, officials said. The money will be channelled through the Kenya Development Corporation’s (KDC) Green Investment Fund to support green growth, job creation and resilient business models at a time when the economy faces multiple headwinds.
The commitment was announced as part of Component 3 of the Kenya Jobs and Economic Transformation (KJET) Project, a World Bank backed initiative designed to increase private sector investment, market access and sustainable finance for Kenyan enterprises.
According to KDC officials, the new financing will prioritise investments in sectors that combine economic opportunity with environmental sustainability, including: Electric mobility and transport – promoting cleaner vehicle technologies and climate smart logistics.
Energy efficient and green buildings – retrofitting structures and supporting low carbon construction. Sustainable agriculture – climate smart farming practices that raise productivity while reducing emissions and environmental degradation. Waste management and recycling solutions – supporting businesses that turn waste into value.
The design seeks to combine public funds, technical assistance and private capital to derisk investments and help SMEs adopt sustainable technologies that may otherwise be too expensive or risky to pursue on their own. KDC Director General Norah Ratemo emphasised that the Green Investment Fund is aimed not just at climate goals but also at jobs and 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. The Green Investment Fund is seen as a critical step toward scaling climate smart investments that create jobs, enhance resilience and support sustainable enterprise growth.”
The Supporting Access to Finance and Enterprise Recovery (SAFER) Project, a parallel World Bank initiative, has already supported more than 37,000 enterprises across Kenya with tailored finance solutions, about 38 % of them women owned, and has helped create more than 25,000 jobs.
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Kenya’s SME sector, comprising the vast majority of businesses nationally, is widely seen as a crucial engine of growth, employment and innovation. However, persistent issues like limited access to affordable capital, high interest rates and weak technical capacity have constrained expansion, especially for climate aligned enterprises.
The World Bank’s green funding injection directly addresses those gaps by making it easier for firms to invest in sustainable technologies. The World Bank’s move builds on previous efforts to strengthen SMEs: in 2025 the government and World Bank partnered on a KSh5 billion microgrant programme to support small business owners in every ward, highlighting the continued emphasis on inclusive economic growth.
Climate finance has become a major priority globally and in Kenya, where droughts, floods and shifting weather patterns are increasingly affecting livelihoods and productivity. The Green Investment Fund aligns with Kenya’s broader climate objectives and international commitments on sustainability and emissions reduction.
Beyond the World Bank initiatives, other institutions are also expanding green and sustainable finance in Kenya. For example, KCB Group reported a growing green loan portfolio exceeding KSh53 billion, targeting sectors such as energy transition and climate adaptation.
Development partners have also been active: Kenya’s landscapes and watersheds are being targeted through a $200 million World Banksupported sustainable landscape project that aims to restore natural resource base and create climateresilient jobs. Implementation of the Green Investment Fund will depend on the selection of an independent fund manager to oversee operations, ensure good governance and safeguard financial and development outcomes, according to KDC.
In addition to funding, experts say SMEs will need capacity building, technical support and market linkages to fully benefit from the fund and scale climate SMART products and services. For Kenya, the new money is expected to boost not only green enterprise growth but also financial inclusion, helping diversify the economy while addressing environmental and social goals, a priority as the country pursues resilient, long term economic transformation.
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