The Kenyan government has made a significant move to support the growth of green investments in the country. On Tuesday, January 31, the National Treasury unveiled its plans to establish a Green Investments Bank, an institution that will cater to the increasing need for environmentally friendly investments.
Through an official statement, the bank announced its plans to provide a wide range of financial instruments to support both the public and private sectors. These instruments include credit guarantees, risk-reduction facilities, debt, and equity. The statement emphasized the bank’s focus on addressing the perception or reality that the costs and risks associated with green investments are too high, with returns that are too low.
The bank aims to provide support and expertise to financing recipients, while also offering incentives to develop innovative financial instruments such as green bonds, blue bonds, resilience bonds, and transactions using carbon credits. It will have a clear mandate to support climate change mitigation and adaptation and green growth initiatives.
To promote green investments, the government intends to explore various approaches. These include:
- The establishment of a Green Investment Register (GIR), will be a database of green investments, including national priority projects in the green sector, flagship green projects, and green public-private partnerships.
- The promotion of green public procurement at the national and county government levels, through the development of guidelines that consider environmental parameters in procurement.
- The reform and increase of financial support for research and development in green technology innovation and production.
- Collaboration with industry leaders to identify green innovation and technology needs and align research policies and strategies with prioritized green research gaps and needs.
- The development and provision of financial and technical support to green innovations and incubation hubs for innovators and green technologies.
- The establishment and financing of Green Special Economic Zones in all 47 counties through the Kenya Green Investment Bank.
The government has also proposed the exploration and viability of a carbon tax as a means to reduce greenhouse gas emissions. The establishment of the Green Investments Bank is a significant step towards creating a greener future for Kenya and the world.