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

The Green Climate Fund (GCF) and KCB Bank Kenya Limited propose a 10-year, USD 96.9 million blended finance programme to increase climate resilience and reduce GHG emissions in Kenya. The programme targets 'hardest-to-reach' MSMEs and farmers, particularly in Arid and Semi-Arid Lands (ASALs), through a tiered vulnerability cluster framework. Key interventions include a USD 65 million CST facility consisting of concessional loans and a USD 20.3 million GCF guarantee to de-risk lending. The project aims to reduce 3.93 million tCO2e and reach 935,692 beneficiaries, with a strong focus on women-led enterprises and the integration of digital lending and climate risk assessment tools.

• The programme targets 935,692 total beneficiaries, including 112,145 direct and 823,547 indirect beneficiaries, of whom 293,807 are women.
• The total financing for the programme is USD 96,906,200, comprising USD 43,643,200 from the GCF (including a $15M loan, $20.3112M guarantee, and $8.332M grant) and USD 53,263,000 in co-financing from KCB.
• A vulnerability cluster framework is used to allocate resources: Cluster 1 (High Vulnerability/ASALs) receives 50% of funds, Cluster 2 (Medium Vulnerability) receives 40%, and Cluster 3 (Low Vulnerability) receives 10%.
• The CST Facility will provide USD 65 million in blended finance, with 52% of funding allocated to adaptation and 48% to mitigation.
• The programme prioritizes women-led enterprises, aiming to allocate at least 31% of CST financing to them and offering a 0.25% lower interest cost.
• Eligible Climate-Smart Technologies (CSTs) include climate-resilient seeds, solar-powered irrigation, clean cooking systems (biogas, solar), and energy efficiency upgrades for cooperatives.
• The programme will enhance KCB's Climate Impact and Risk Assessment Framework (CIRAF) and the Climate Assessment for Financial Institutions (CAFI) tool to better track GHG reductions and resilience gains.
• The project addresses significant financial barriers, noting that only 3.9% of loan portfolios in Kenya were previously allocated to the agricultural sector due to perceived risks.
• The programme's exit strategy relies on a revolving fund model where loan repayments starting in Year 6 are reinvested to sustain the facility beyond the GCF funding period.

APA

Green Climate Fund (2026). Scaling climate-smart solutions for hardest-to-reach MSMEs and farmers in Kenya (CST Facility) Kenya. https://www.greenclimate.fund/sites/default/files/document/fp292.pdf

Chicago

Green Climate Fund. Scaling climate-smart solutions for hardest-to-reach MSMEs and farmers in Kenya (CST Facility) Kenya. 2026. https://www.greenclimate.fund/sites/default/files/document/fp292.pdf.

Wikipedia

{{cite report |author=Green Climate Fund |title=Scaling climate-smart solutions for hardest-to-reach MSMEs and farmers in Kenya (CST Facility) Kenya |date=17 April 2026 |url=https://www.greenclimate.fund/sites/default/files/document/fp292.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{greenclimatefund2026scaling, author = {{Green Climate Fund}}, title = {{Scaling climate-smart solutions for hardest-to-reach MSMEs and farmers in Kenya (CST Facility) Kenya}}, institution = {Green Climate Fund}, year = {2026}, month = apr, url = {https://www.greenclimate.fund/sites/default/files/document/fp292.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }