Kenya ranks 150th on the ND-GAIN Climate Vulnerability Index, with micro, small and medium-sized enterprises (MSMEs) and farmers particularly exposed to intensifying droughts, floods, heat stress, and erratic rainfall. Their heavy reliance on climate-sensitive production systems, combined with lock-in to fossil-fuel- and biomass-intensive practices, undermines resilience and drives greenhouse gas emissions. Significant financial and non-financial barriers prevent these groups from investing in the climate-resilient solutions they need.

The project aims to establish and demonstrate a scalable, de-risked local currency lending facility enabling Kenya Commercial Bank (KCB), serving as both Accredited Entity and Executing Entity, to sustainably expand climate finance to the country's most climate-vulnerable MSMEs and farmers. Through a blended structure and targeted technical assistance, the programme seeks to overcome structural financial and credit risk barriers that currently prevent lending to high-risk, underserved segments.

Structured around three components, the programme will establish a Climate-Smart Technology lending facility; strengthen KCB's climate impact and risk assessment frameworks and build capacity among loan officers, suppliers, and beneficiaries; and enhance institutional systems and knowledge sharing to scale climate-smart finance beyond the programme. 

It is expected to directly benefit 112,145 people and indirectly reach over 823,547, with activities primarily focused on the 34 most climate‑vulnerable counties in Kenya, where approximately 90 per cent of programme resources will be directed. The programme is aligned with Kenya’s Nationally Determined Contributions (NDCs), National Adaptation Plan (NAP), Vision 2030 and Green Economy Strategy.