# Climate finance in Kenya

Climate finance in Kenya is vital to meet its climate goals and ensure sustainable economic growth. By leveraging international and domestic funding sources, Kenya can continue its leadership in renewable energy, climate adaptation, and building a resilient economy that can withstand the effects of climate change.

## Nationally determined contributions

Kenya is a party to the United Nations Framework Convention on Climate Change (UNFCCC), the Kyoto Protocol and the Paris Agreement. The country's Nationally Determined Contribution is to avoid greenhouse gas (GHG) emissions by 32% by 2030 relative to the business-as-usual (BAU) scenario at a projected cost of US$62 billion.
According to the updated Nationally Determined Contribution (NDC) submitted to the UNFCCC in 2020, Kenya commits to mobilize resources to meet 13% of the budget, and will require international support for 87% of the budget.

## Policy and legal framework

Considerable efforts have been made to mainstream climate change considerations into the country's plans, policies, strategies, projects and programme. The key policy is Kenya Vision 2030, which is the long-term development blueprint encapsulates flagship programmes and projects with aspects of adaptation and mitigation.
The other key policies include the National Climate Change Response Strategy (NCCRS), 2010; which was the first national policy document on climate change. It aims to advance the integration of climate change into all government planning and budgeting. To operationalize the NCCRS, National Climate Change Action Plan (NCCAP) was prepared, this is a five-year plan that sets out the path towards low carbon climate resilient development. Since 2013, the country has successfully implemented two action plans and is currently developing the third NCCAP that will run until 2027.
To provide a legal framework for climate change, the Climate Change Act was enacted in 2016. The Act established governance structures for climate change management in the country including the National Climate Change Council which is responsible for oversight and coordination and is chaired by His Excellency, the President of the Republic of Kenya. The other supporting policies include the National Policy on Climate Finance; the Green Economy Strategy and Implementation Plan; and the Climate Change Act, 2016.

## Government financing needs

The Government of Kenya estimates that US$62 billion is estimated to implement Kenya's NDC (mitigation and adaptation actions) in 2020 – 2030. The resource requirement for mitigation actions is US$17.7 billion, while the resources required for adaptation actions is US$43.9 billion up to the year 2030.
Kenya is highly vulnerable to climate change and is already feeling the effects with notable increase in climate-related disasters, such as droughts and floods. These events are estimated to create an economic liability of 2-2.8% of its gross domestic product (GDP) every year.
This is largely because the economy is dependent on many climate-sensitive sectors, such as agriculture, water, energy, tourism, wildlife, and health. This vulnerability is then worsened when the country is exposed to multiple crises, such as COVID-19 pandemic, locust invasion in 2020 and flooding in 2024.
Kenya's climate finance needs span energy, agriculture, water, and forestry. In energy, Kenya aims to transition to renewable energy sources, such as wind, solar, and geothermal, to not only reduce its carbon footprint but also to ensure energy security. The shift requires substantial investments in infrastructure technology, and capacity building.
In agriculture, Kenya requires a transformation towards more sustainable and climate-resilient practices. Investments are needed for the adoption of climate-smart agriculture technologies, improved water management systems, and the development of drought-resistant crops to ensure food security.

## Climate finance flows

In 2018, US$2.4 billion of public and private capital was invested in climate-related investments. This is approximately one-third of the financing that Kenya needs annually to meet the targets set in its NDC.
About 78% of the climate finances in Kenya were directed to the implementation of climate mitigation measures, whereas adaptation accounted for only 12%. A large percentage of international public climate finance was delivered through debt and was mostly channelled towards mitigation activities.
Private sector financing is largely from private actors. Over 95 impact investors are managing over 136 impact capital vehicles in Kenya. Over $650 million of private investment capital flowed into Kenya between 2005 and 2015 predominantly funding renewable energy projects.