Kenya’s manufacturing, transport and agriculture sectors have combined green investment and financing opportunities valued at 87 billion shillings ($853 million) over the next five to 10 years of which there is near-term demand for 16 billion shillings ($157 million), a new study released on Wednesday, 19 December 2018, has revealed.
The three sectors through various segments present the most viable business opportunities for climate-smart financing, as Kenya readies for its first sovereign green bond issue next year to assure the country’s sustainable economic development and resilience to climate change in line with the country’s green economy strategy and climate change policies.
The study was commissioned by Green Bond Programme Kenya with support from Kenya Bankers Association and WWF Kenya.
The transport sector, the study indicates, offers the bulk of climate-smart opportunities and finance demand worth 8 billion shillings ($78 million) per year in the short term, which is defined as one to two years, growing to 58 billion shillings ($569 million) in the medium term, which is five to 10 years.
Agriculture follows with 3.5 billion shillings ($30 million) in the near term and18 billion shillings ($176 million) over 10 years, and manufacturing with 4.4 billion shillings ( $40 million) and 10.7 billion shillings ($100 million) in the same periods.
The planned Light Rail and Rapid Bus Transit model in Nairobi and Mombasa, with a finance demand worth 14 billion shillings ($137 million) and 35 billion shillings ($343 million) respectively, takes the bulk of the sustainability investments available under transport sector.
Under the manufacturing sector, the study lists energy efficiency, renewable energy, agro-processing and waste management as potential areas for green investment. Livestock and agricultural inputs cap the opportunities in the agriculture sector.
The report seeks to quantify the investment opportunity for green investments in Kenya, identify barriers to the issuance of green bonds and solutions for creating bankable projects.
Speaking during the launch, Mohammed Awer, WWF Kenya chief executive officer, said the study, a first in the market, bridges the informational vacuum experienced by potential bond issuers and investors in the green financing market.
Overall, the need for an enabling policy environment at local and international level, limited data on green investment opportunities and technical know-how have been cited as among key barriers hampering spread and scaling up of the green financing market in Kenya, noted the report.
– APA
