World Bank unlocks Sh5.5b green fund for local SMEs
Business
By
Esther Dianah
| Jan 16, 2026
Kenya’s push to unlock private capital for climate-friendly businesses is gathering pace.
This is after the World Bank and Kenya Development Corporation (KDC) reviewed progress on a new Green Investment Fund designed to expand financing for small and medium-sized enterprises.
KDC said the global lender has channelled $43 million (Sh5.5 billion) to support the fund, which will target sectors seen as both commercially viable and critical to Kenya’s transition to a greener economy.
The funds are available to entrepreneurs in electric mobility and transport, energy-efficient and green buildings, sustainable agriculture, and waste management solutions.
The high-level meeting, which took place in Nairobi on Tuesday, concentrated on the fund’s “implementation readiness, governance arrangements, and scaling potential” under Component 3 of the Kenya Jobs and Economic Transformation (KJET) Project as well as developments under the Supporting Access to Finance and Enterprise Recovery (SAFER) Project.
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At the heart of the initiative is a blended finance approach meant to reduce risk for private investors while expanding affordable capital for firms investing in climate-aligned technologies.
KDC said the World Bank had reaffirmed its support for the platform, arguing that public resources and technical assistance can be used to crowd in private money at a scale Kenya’s small businesses need.
KJET’s development objective is to increase private sector investment, market access, and sustainable finance to create and improve jobs, aligning with Kenya’s broader climate resilience agenda.
For thousands of SMEs, the stakes are immediate. Climate-driven disruptions, from flooding to prolonged dry spells, can wipe out inventories, disrupt supply chains, and spike operating costs.
In that context, the fund is positioned not merely as an environmental instrument but as a jobs and competitiveness play: helping firms modernise, cut energy waste, and invest in more resilient production.
A key issue in the talks was governance, with the World Bank emphasising the importance of an independent fund manager selected through a competitive process, now said to be at an advanced stage.
The Bank said this milestone is critical to instill commercial discipline, manage conflicts of interest, and keep the fund aligned with both development impact and financial sustainability.