In 2015, the Government of Kenya submitted its nationally determined contribution (NDC) to the Paris Agreement, a landmark agreement to combat climate change. Kenya pledged to reduce its greenhouse gas (GHG) emissions by 30% by 2030 relative to the business-asusual scenario. At the time, the Government of Kenya estimated that KES 4,040 billion (USD 40 billion) would be needed by 2030 to meet its NDC target. In 2018, these numbers were revised upwards in its National Climate Change Action plan (NCCAP) to KES 1,848 billion (USD 18.3 billion) for the 2018-2022 period only, equivalent to nearly KES 465 billion a year (USD 4.6 billion). In December 2020 the Government submitted an updated NDC further increasing the need. The current estimated cost of implementing Kenya\u2019s mitigation and adaptation actions stands at KES 6,775 billion (USD 65 billion) in 2020-2030.<\/p>\n\n\n\n
The Landscape of Climate Finance in Kenya is the first attempt to track the climate finance Kenya is highly vulnerable to climate change and is already feeling the effects with a notable increase in climate-related disasters, such as droughts and floods. These events are estimated to create an economic liability of 2-2.8% of its gross domestic product (GDP) every year. This is largely because the economy is dependent on many climate-sensitive sectors, such as agriculture, water, energy, tourism, wildlife, and health. This vulnerability is then worsened when the country is exposed to multiple crises, such as the locust invasion and COVID-19 pandemic in 2020.<\/p>\n\n\n\n Kenya\u2019s \u2018Vision 2030\u2019 policy aims to transform it to an industrialized, middle-income country by 2030. However, given the vulnerability of its key sectors it is vital that this is \u2018green growth\u2019 to ensure Kenya builds a sustainable, resilient economy. To achieve this, both the public and private sector will need to scale-up and mainstream climate-related investments.<\/p>\n\n\n\n Through the research outlined in this report, there is an opportunity to examine the finance flowing in Kenya in 2018 and evaluate how aligned it is with the climate ambitions and needs. This study explores which sectors are receiving climate finance and whether this is enough to meet the ambitions of Kenya\u2019s NDC. The research examines investments from the public and private sectors, as well as domestic and international investors.<\/p>\n\n\n\n In 2018, KES 243.3 billion (USD 2.4 billion) of public and private capital was invested in climate-related activities. This is approximately one third of the financing that Kenya needs annually to meet the targets set in its NDC<\/strong>. Overall, public investment (from domestic and international providers) totaled KES 144.3 billion (59.4%) while investment from the private sector totaled KES 98.9 billion (40.7%). In order to meet the climate ambitions outlined in the NDC, both public and private climate finance needs to be scaled-up significantly by 2030.<\/p>\n\n\n
flows in the country since the Paris Agreement<\/strong>. The report finds that KES 243.3 billion (USD 2.4 billion) flowed to climate-related investments in 2018, one third of the finance needed annually. Led by the National Treasury of Kenya, the analysis shows that the financing tracked is disproportionally targeting certain sectors and activities that will only partially address climate issues and significant efforts will be needed to align all sectors relevant to achieving Kenya\u2019s NDCs. If finance continues to flow at this same rate, Kenya will fall short of what is needed to achieve its climate goals.<\/p>\n\n\n\nKEY FINDINGS<\/h2>\n\n\n\n