Kenya is set to become a continental hub for climate finance after the Green Climate Fund (GCF) announced it will establish a regional office in Nairobi.
The decision, taken at a GCF Board meeting on March 28, will see Nairobi serve as the hub for East and Southern Africa. A second office in Côte d'Ivoire’s Abidjan will cover West, Central and North Africa.
The move comes as most African countries have long struggled to access climate funding. “Opening a regional presence in Nairobi and Abidjan will strengthen GCF engagement with the Africa Region,” said Catherine Koffman, director of the GCF Africa Region.
Until now, the GCF has operated solely from its headquarters in the Republic of Korea. The new initiative places Nairobi at the centre of decisions on climate finance flowing into some of the world’s most climate-exposed economies.
Globally, the GCF manages about Sh2.5 trillion (USD 20 billion), financing projects in developing countries to cut emissions and adapt to climate impacts. “The Fund manages a USD 20 billion portfolio of 354 projects across 134 countries,” Koffman said.
Africa accounts for the largest regional share – approximately Sh980 billion (USD 7.6 billion) spread across 146 projects. But access to that money has often been slow and uneven. Governments have long complained about complex approval processes, limited technical support, and distance from decision-makers.
Koffman said the GCF’s move to establish a regional presence in Africa is part of a broader reform agenda implemented over the past two years “to make GCF more efficient and its investments more impactful”.
According to the GCF, having teams on the continent should speed up engagement with governments, reduce bureaucratic delays, and make it easier to design projects that reflect local realities. “Being closer means problems can be dealt with as they come up, instead of going back and forth across continents,” Koffman said.
The Fund has already introduced reforms aimed at cutting approval timelines to under nine months, down from years in some cases.
Kenya is no stranger to climate funding. The GCF has committed an estimated Sh63.5 billion (USD 492 million) to support climate action in the country, including four single-country projects and 23 regional or multi-country projects.
The new regional office strengthens Nairobi’s position as a key entry point for climate finance into East Africa, building on its status as a base for international environmental agencies.
However, climate experts caution that hosting an office does not automatically translate into more funding for Kenya itself. “Kenya gains visibility and access, yes,” said Lucas Mwangi, a Kenyan-based climate researcher. “But funding still depends on project quality and national priorities.”
One of the latest Kenya-linked projects is a Sh12.5 billion programme implemented with KCB Bank Kenya Limited.
Despite the shift to a regional model, the GCF maintains that project channels remain country-driven. Governments and institutions working on their behalf must identify priorities and submit proposals for funding.
The GCF’s funding process involves three board cycles per year, during which concept notes move from ideation to final approval. Timelines vary, but there is a firm commitment to a maximum of nine months; some projects are approved much faster.
Countries work through national entities, direct access entities, or accredited international access entities to develop project proposals. “Importantly, the system is not auction-based,” said Koffman. “Instead, countries are responsible for developing project proposals.”
Projects are typically aligned with priority sectors such as energy and renewable energy, provided they reflect the Fund’s mandate. “They can develop a project that they believe is aligned with our mandate,” Koffman said. “This means the proposal must demonstrate a strong climate rationale. Furthermore, the project should be transformative, with some level of transformation within the market and a paradigm shift.”
Once a proposal meets these criteria, it undergoes rigorous internal governance processes before being presented to the Board for final approval.
In principle, this approach ensures alignment with national climate plans, but in practice, it largely depends on institutional capacity. Traditionally, countries with stronger technical teams and established financial partners secure funding more easily, while others rely on external support to prepare proposals.
To address this gap, the GCF says it has expanded its readiness support programme, which helps countries build the systems needed to access funding. The initiative targets small businesses and farmers, using concessional finance to make climate-related investments less risky.
In practice, this could mean cheaper loans for solar equipment, irrigation systems, or climate-resilient farming inputs, areas where commercial lenders have traditionally been cautious.
Much of the GCF’s recent work in Africa has centred on sectors that directly affect livelihoods, including agriculture, energy, and small and medium enterprises (SMEs). According to Koffman, by encouraging private sector participation in affordable clean energy solutions, the initiative is expected to expand electricity access to 25 million people, provide clean cooking solutions to 12 million, and support productive energy use for about 5 million farmers and SMEs.
Esther Njeri, co-founder of Utheri Energy Solutions, told Climate Action that limited access to appropriate financing remains a major barrier for climate innovators. “Many climate startups develop impactful solutions but struggle to access patient capital that understands the realities of building climate infrastructure and new energy markets,” she explained.
Njeri said complex, time-consuming application processes continue to lock out SMEs, leaving a persistent funding gap for early and growth-stage ventures. She described the GCF’s decision to establish a regional office in Nairobi as “a very encouraging and strategic step” that brings financing closer to innovators. However, she cautioned that some funding mechanisms favour larger institutions. “The processes can sometimes be bureaucratic and slow, which delays the deployment of solutions that are urgently needed.”
She hopes the Fund will remain accessible and responsive to entrepreneurs. “In addition to financing, technical assistance, partnerships and capacity building will be critical,” she noted, adding that collaboration could help scale clean energy solutions for industry.
The GCF’s Kenya programme is designed to push financing into rural and underserved areas where climate impacts are already visible but access to credit remains limited. The structure absorbs part of the financial risk, encouraging private lenders to extend credit to groups they might otherwise avoid. “We aim to engage more private sector actors while building farmers’ capacity in smart agriculture to create systems that strengthen food security,” Koffman explained, “and de-risk climate finance, especially for smallholder and underserved communities.”
During the Africa Climate Investment Summit 2025, Environment Cabinet Secretary Deborah Barasa warned that Africa’s climate fight is constrained by a system that prioritises protecting capital over supporting communities. “Access is slow, complex, and often debt-creating,” she said. Despite Africa contributing less than four percent of global emissions, it receives only a fraction of the financing it needs. “The result is a continent innovating faster than it is being funded; – a cruel irony in a world racing against time.”
In response, experts called for a shift toward a more inclusive climate finance model focused on resilience, regeneration and inclusion. Catherine Masolia of SOMO Africa Trust said meaningful transformation must begin at the grassroots level. “Start with grants, move to concessional loans, then to commercial debt. If we keep funding only what is instantly profitable, we will keep excluding the very innovators who hold the keys to Africa’s green future.”
The Kenyan project, implemented with KCB Bank Kenya Limited, is described as an innovative structured financing initiative that addresses different categories of risk. “It uses concessional funding to de-risk areas where the private sector may not have the same appetite,” Koffman said, “while also incorporating longer tenures and lower pricing to make financing more affordable.”
The project focuses on SMEs in rural and underserved areas, supporting both mitigation and adaptation. The structure was developed with strong emphasis on local needs. “It is very much focused on small and medium-sized enterprise. It also focuses on rural areas and underserved areas within Kenya,” Koffman said. “The design was very much kept in mind with what the locals on the ground wanted to solve for.”
Its implementation is supported through partnerships with entities that understand local markets, ensuring alignment between the financing model and community needs.
