April 15th, 2026

Kenya is rapidly urbanising and the risks of climate change have become a daily reality. The UK Government’s Foreign, Commonwealth & Development Office (FCDO) funded Sustainable Urban Economic Development (SUED) Programme aims to build urban resilience in intermediary cities/municipalities in Kenya by creating the right conditions for inclusive and sustainable growth. FSD Kenya started managing the SUED programme mid 2025.

SUED’s approach included an urban economic planning (UEP) phase where municipalities were supported to undertake economic diagnostics, sector prioritisation, and feasibility analysis. This was followed by project screening and selection, pre-feasibility studies, market sounding and identification of investors leading to investment closes. This process was based on detailed financial modelling, risk analysis, and application of environmental and social safeguards. The programme uses seed funding to leverage private and public financing to accelerate investment into these projects.

To date, £50,899,842 in total investments has been mobilised by investors towards 19 investments owing to £9,088,426 in seed funding that has been committed by the programme. These investments target to create 85,909 new jobs in 8 target municipalities, with 14,536 jobs created to date. In addition to managing the existing portfolio, FSD Kenya played a key role in on boarding three of these investments worth £4.1 million through £1 million in seed funding.

The pathway from urban economic planning to real investments and jobs requires sustained coordination between county authorities, investors, and national agencies. Multiple challenges including complex land processes, inadequate infrastructure, and layered regulatory approvals demand active programme support to ensure success. A key lesson has been the importance of sequencing to ensure that feasibility work, stakeholder buy-in, and communications are aligned to maintain investor confidence and political ownership. There is also a need to develop local capacity to sustain the investments including small holder support and supply aggregation, quality assurance, access to markets and investment attraction for growth.

Looking ahead, SUED will build on its experience to accelerate and scale new investments. Emerging opportunities lie in climate-smart agro-processing, green infrastructure, and circular economy solutions—areas increasingly aligned with both investor appetite and Kenya’s climate commitments. FSD Kenya plans to hold investor-investee forums to showcase the investment opportunities surfaced by the SUED programme to potential financiers and peer-to-peer forums to catalyse cross-learning between the various county governments and investors.

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