The Landscape of Climate Finance in Kenya

In 2018, Kenya received KES 243.3 billion (USD 2.4 billion) in climate finance, which is approximately half of the annual funding required to meet its NDC targets. The report highlights a significant imbalance in fund allocation, with 79.8% of finance directed toward mitigation—primarily large-scale renewable energy—while adaptation received only 11.7%. Public finance accounted for 59.4% of the total, and private finance 40.7%. Major investment gaps exist in the water, forestry, and transport sectors. The document recommends scaling up adaptation finance, implementing private sector incentives for non-energy sectors, and operationalizing 'Segment 8' in the Integrated Financial Management and Information System (IFMIS) to improve climate expenditure tracking.

• In 2018, total climate-related investment in Kenya was KES 243.3 billion (USD 2.4 billion), representing roughly half of the annual financing needed to achieve NDC targets. Public investment totaled KES 144.3 billion (59.4%), while private sector investment was KES 98.9 billion (40.7%).
• Climate finance is heavily skewed toward mitigation, which received 79.8% (KES 194.2 billion) of total funds, largely driven by renewable energy generation (KES 161 billion). In contrast, adaptation received only 11.7% of finance, despite Kenya having an adaptation-focused NDC.
• The water and blue economy sector faces the largest financing gap. In 2017/18, climate-relevant public expenditure in water and wastewater management was KES 14.5 billion, which is only 15% of the KES 100.7 billion need estimated by the National Climate Change Action Plan (NCCAP) for 2018/2019.
• International public finance accounted for KES 75.6 billion (31.1% of total climate finance). Most of this was delivered as debt (79%), primarily supporting mitigation (55%), while grants (19%) were mainly used for adaptation.
• Private sector investment totaled KES 98.9 billion, with 65.6% coming from overseas companies and 34.4% from domestic sources. International private investment was almost exclusively focused on renewable energy (99.7% of their total).
• The transport sector, responsible for 11% of Kenya's emissions in 2016, received almost no tracked climate finance through the IFMIS in 2017/18, despite being a priority in the NCCAP.
• The forestry sector is severely underfunded relative to its mitigation potential. While the national strategy to reach 10% tree cover by 2022 is estimated to cost KES 48 billion, only KES 540 million was spent on the forestry sector in 2018.
• The Kenyan government's climate-related development expenditures for FY 2017/18 were KES 76 billion, consisting of KES 42 billion in external resources (55%) and KES 34 billion in domestic resources (45%).
• Semi-Autonomous Government Agencies (SAGAs) are critical implementers, but their spending is difficult to track because they are not required to use the IFMIS. In 2018, SAGAs spent at least KES 35 billion on climate investments, with KenGen accounting for KES 33.6 billion.
• The COVID-19 pandemic is projected to reduce Kenya's GDP growth from an annual average of 5.7% (2015-2019) to 1.5% in 2020, creating fiscal gaps that may limit the government's ability to implement the NDC.

APA

Odhengo, P., Korir, H., Muthini, D. D., Moturi, D. W., Mazza, F., Van Caenegem, H., Balm, A., Mwangi, C., Mwithiga, L., Njoroge, D. S., & Wambua, M. (2021). The Landscape of Climate Finance in Kenya. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2021/03/The-Landscape-of-Climate-Finance-in-Kenya.pdf

Chicago

Odhengo, Peter, Hillary Korir, Dr. Davis Muthini, Dr. Walter Moturi, Federico Mazza, Helene Van Caenegem, Anna Balm, et al. The Landscape of Climate Finance in Kenya. Climate Policy Initiative, 2021. https://www.climatepolicyinitiative.org/wp-content/uploads/2021/03/The-Landscape-of-Climate-Finance-in-Kenya.pdf.

Wikipedia

{{cite report |last1=Odhengo |first1=Peter |last2=Korir |first2=Hillary |last3=Muthini |first3=Dr. Davis |last4=Moturi |first4=Dr. Walter |last5=Mazza |first5=Federico |last6=Van Caenegem |first6=Helene |last7=Balm |first7=Anna |last8=Mwangi |first8=Christine |last9=Mwithiga |first9=Lydia |display-authors=etal |title=The Landscape of Climate Finance in Kenya |publisher=Climate Policy Initiative |date=March 2021 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2021/03/The-Landscape-of-Climate-Finance-in-Kenya.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{odhengo2021landscape, author = {Odhengo, Peter and Korir, Hillary and Muthini, Dr. Davis and Moturi, Dr. Walter and Mazza, Federico and Van Caenegem, Helene and Balm, Anna and Mwangi, Christine and Mwithiga, Lydia and Njoroge, Dr. Samuel and Wambua, Mwalya}, title = {{The Landscape of Climate Finance in Kenya}}, institution = {Climate Policy Initiative}, year = {2021}, month = mar, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2021/03/The-Landscape-of-Climate-Finance-in-Kenya.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }