The Kenyan government is planning to raise Ksh100 billion through green and climate bonds by 2027 to help transform Kenya’s agriculture sector and make farming more sustainable.
According to reports, the National Treasury will issue the bonds at lower interest rates of between 4 and 6 per cent, with repayment periods ranging from five to 10 years.
The bonds will be supported by revenue generated from carbon credits.
Kenya targets Ksh100 billion from Green Bonds to transform agriculture sector by 2027. Photo: Courtesy.
The funds will be used to support projects such as solar-powered cold storage facilities and regenerative farming practices, which are aimed at improving food security and helping farmers cope with climate change.
The initiative is part of the National Agriculture Sector Investment Plan (NASIP), which seeks to attract more private investment into agriculture while reducing financial risks for investors.
Under the plan, the government wants at least 45 per cent of agricultural funding to come from private investors by 2030, reducing overreliance on public funding.
To encourage lending to farmers and agribusinesses, the Agricultural Finance Corporation (AFC), together with partners including the African Development Bank and the International Fund for Agricultural Development (IFAD), will provide guarantees covering up to 50 per cent of loan risks.
The programme targets between Ksh100 billion and Ksh150 billion in guaranteed loans over the next five years.
Women and youth are also a major focus of the programme, with at least 40 per cent of loan guarantees reserved for businesses led by young people and women.
In addition, climate financing partners such as the Green Climate Fund (GCF), the European Union (EU), and the Japan International Cooperation Agency (JICA) are expected to provide Ksh50 billion annually in affordable loans with low interest rates.
Counties will also benefit through the County Agricultural Investment Fund (CAIF), which will support agri-tech startups with funding ranging from Ksh10 million to Ksh50 million.
The plan comes as many Kenyan farmers continue to struggle to access affordable loans, limiting investment and affecting food production across the country.
