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The government is planning to set up a new bank called the Kenya Green Investment Bank (KeGIB).
The proposal is contained in the Draft National Green Fiscal Incentives Policy Framework that was shared on January 31, by National Treasury Cabinet Secretary Prof Njuguna Ndungu for stakeholders to submit their input.
This bank will provide money and other help to both public and private companies who want to make investments that are good for the environment.
"The government will develop a green investment bank that will provide a range of funding instruments and associated incentives to support the public and private sector in overcoming barriers to making green investments at scale," the document reads.
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President William Ruto has given priority to the government's efforts to curb climate change and build sustainable solutions.
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“I think leaning on fossil fuel is not an option in the face of the reality of what we know is happening to our globe. We need to make difficult decisions, and the rest of the world needs to help Africa make the difficult decisions, work with the just transition of our energy, work with ensuring that we go green,” William Ruto said during an interview with CNN in 2022.
According to the Green Economy Strategy and Implementation Plan, Kenya requires at least Sh2.4 trillion to implement green projects by 2030.
The goal of the KeGIB is to make it easier for companies to get the funding they need to make the switch to greener operations and help protect the environment.
The bank will provide a variety of financial options, including credit guarantees, debt and equity, and risk-reduction facilities.
It will also provide support and advice to companies that need financing and will encourage the creation of innovative financial instruments such as green bonds and resilience bonds.
To make sure the bank is successful, the government will work on creating a strong plan for how it will be run. The bank will also consider what industries to focus on.
"The government currently expects that the new institution will be given a clear mandate to support climate change mitigation and adaptation and green growth, but it will be important to ensure coherence with existing and planned funding institutions in Kenya," the proposal further states.
In addition to the new bank, the government is also planning to create a database of green investments called the Green Investment Register. This database will include information about the best green projects in the country and will help connect investors with these projects.
The government is also planning to make it easier for companies to buy environmentally-friendly products by developing guidelines for green procurement. This means that when the government or local governments buy things, they will consider how environmentally friendly the products are.
To help new and innovative green technology companies, the government will create regulatory sandboxes. This means that these companies will be allowed to test their new products or services in a live market environment while still being protected.
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The government will also provide financial and technical support to green innovation and incubation hubs, which will help new companies get started.
President Ruto’s administration is also planning to set up Green Special Economic Zones in all 47 counties. These zones will be a place for companies that are focused on being environmentally friendly to set up shop and grow their businesses.