New cash cow: Treasury gets Sh200 billion in climate finance
The National Treasury Building in Nairobi. The Sh200 billion bagged by the National Treasury in climate initiatives will help offset part of Kenya’s funding needs.
The National Treasury has netted over Sh200 billion through climate finance initiatives, helping to offset part of its budget funding requirements and easing fiscal pressures.
Over the past year, the exchequer has tapped into various climate-related funding projects allowing it access billions of shillings for budget support.
Kenya has seen commitments of over Sh99 billion ($621.4 million) from the Climate Investment Funds- made up of a coalition of multilateral lenders and the International Monetary Fund (IMF) Resilience and Sustainability Fund (RSF).
The RSF has been the most notable source of climate financing so far with the facility approved last year committing a total of Sh88.5 billion ($551.4 million) with Sh9.6 billion ($60.2 million) of the funds being disbursed last month.
Money from the facility is expected to replace previous budgetary allocations on the financing of climate-related infrastructure including development of clean energy and afforestation .
Equally, the financing has been projected to catalyse private sector funds unlocking additional resources for the exchequer.
“RSF resources will help augment the financial year 2023/24 budgetary allocations for investments in ongoing renewable energy projects, improvements in the coverage and dissemination of Kenya early warning systems, restoration efforts implemented through the National Forest Action Plan and the National Tree Planting Campaign and the construction of climate-related infrastructure through the National Irrigation Development Project,” the IMF noted.
The funding is expected to free up an estimated Sh29.8 billion previously set aside for the initiatives.
Earlier this week, the Trust Fund Committee of the Climate Investment Funds (CIF) endorsed a Sh11.2 billion ($70 million) plan with an initial allocation plan of Sh7.4 billion ($46.39 million) to advance the integration and utilisation of renewable energy in the Kenyan grid.
The funding is part of the CIF’s renewable energy integration investment programme, which seeks to support Kenya’s ambition of reducing greenhouse gas emissions by 32 per cent by 2030.
The CIF is a leading multilateral climate finance partnership that channels concessional finance through six multilateral banks for upstream advisory and downstream investment activities to support climate action.
The lenders implementing the CIF’s investments include the World Bank, the International Finance Corporation, the African Development Bank, the Asian Development Bank, the European Development Bank, and the Inter-American Development Bank.
