May 27th, 2024

2023 was an important year for FSD Kenya’s green finance work in a landmark ‘green’ year for Kenya.

FSD Kenya’s green finance work focuses on contributing to the development of a greener real economy that is low carbon; resilient to climatic and other environmental shocks; resource efficient and generates green investment; employment, and income generation opportunities for low-income Kenyans; grounded in partnerships with Kenyan and African players.

Work on green market development in 2023 was centred on the county green finance assessment activity. Noting that climate change and natural disasters have disrupted the socio-economic development of counties, assessment of the potential for 10 counties to access and apply to green finance markets was conducted.

The ten counties are: Embu, Kirinyaga, Kisumu, Laikipia, Nairobi, Makueni, Nandi, Taita-Taveta, Vihiga, and Wajir.

FSD Kenya’s assessment focused on the following factors:

• Economic and fiscal assessment: County fiscal performance, strengths, challenges, and ability to take on (additional) debt including the consideration of potential revenue generation sources.
• Credit risk assessment: Estimate a county government’s relative likelihood of defaulting on its obligations from the listing.
• Green asset and activity assessment: Availability of green investment opportunities and assets in the selected counties.
• Green finance capability assessment: County government skills and ability to manage green financial instruments (with a focus on green bonds) and related projects.

This work gained significant support and traction from the market and The National Treasury and Economic Planning and was the point of focus of the side-events FSD Kenya co-hosted with The National Treasury and Economic Planning  at both the Africa Climate Summit and CoP 28.

In 2024 and beyond, FSD Kenya will continue to be a key resource on green finance policy development and implementation at both national and county level, while advancing its green market development and transaction focused activities.

This blog is one of the articles in FSD Kenya’s 2023 annual report. To read the full report, click here. 

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