Upon coming to office, President Ruto immediately became a champion of climate action, even successfully lobbying for Kenya to host the first Africa Climate Summit, and also positioning Kenya on the frontline for green investments especially in renewable energy.
Those strategic engagements in climate finance initiatives seems to be bearing fruit, with the Kenyan Treasury amassing over Sh200 billion in the past year, providing a crucial fiscal buffer and easing budgetary pressures.
This achievement is a result of tapping into multiple climate-related funding sources over the last year, which have offered substantial financial support for the nation’s budget.
Significant among these funding sources is the Climate Investment Funds and the International Monetary Fund’s Resilience and Sustainability Fund (RSF), from which Kenya has secured commitments totaling more than Sh99 billion ($621.4 million).
The RSF alone has committed Sh88.5 billion ($551.4 million), with a recent disbursement of Sh9.6 billion ($60.2 million), marking a pivotal contribution to climate financing in Kenya.
The allocation from these funds is intended to offset the costs previously designated for climate-related infrastructural developments, including renewable energy initiatives and tree planting efforts, thereby encouraging private sector engagement and augmenting government revenues.
The IMF outlines that the RSF financing will bolster the 2023/24 fiscal year’s budget for renewable energy advancements, enhancement of early warning systems, and the implementation of the National Forest Action Plan and the National Tree Planting Campaign, alongside the development of other climate-resilient infrastructure.
This move is anticipated to release approximately Sh29.8 billion that had been allocated for these projects.
In a recent development, the Climate Investment Funds (CIF) Trust Fund Committee has approved a Sh11.2 billion ($70 million) strategy to enhance renewable energy use within Kenya’s power grid, with an initial funding of Sh7.4 billion ($46.39 million).
This initiative is part of CIF’s broader aim to help Kenya reduce its greenhouse gas emissions by 32 percent by 2030.
The CIF partnership, working with six multilateral banks, plays a crucial role in channeling concessional finance to support Kenya’s journey towards achieving 100 percent clean energy by 2030 and net-zero emissions by 2050.
Energy PS Alex Wachira highlighted that the program will also focus on promoting gender equity in the renewable energy sector by training professionals and resource persons.
Accessing these climate finance funds comes with specific conditions, compelling the Kenyan government to implement reforms aimed at mitigating climate change.
Actions such as the observance of National Tree Planting Day and the forthcoming implementation of carbon pricing reflect the government’s commitment to these reforms. Additionally, regulations to foster energy efficiency and renewable energy generation are in the pipeline, underscoring Kenya’s proactive stance against climate change.
Kenya’s is increasingly vulnerable to climate shocks, such as drought and flooding, and this has made access to climate financing a critical aspect of its strategy to address the socio-economic impacts of climate variability.
The World Bank’s observation of the ongoing climatic trends, including the expected continuation of enhanced rainfall and warmer temperatures in most parts of the country, underscores the variable impacts of climate change across different regions and the need for tailored responses to these challenges.
