Localizing climate finance in Kenyan Counties: Unlocking Opportunities for Climate-Smart Agriculture Investments

Kenya’s heavy reliance on climate-sensitive natural resources makes the agricultural sector highly vulnerable to the negative effects of climate change. Therefore, the Kenyan government is highlighting the importance of local-level financing for climate-smart agriculture projects (CSA), supporting the growth of a more sustainable agriculture sector. The government’s prioritization of building farmers’ resilience through the allocation of financial resources for climate change adaptation and mitigation marks a new start for Kenyan agriculture.

Recognizing the need for localized action, the Kenyan treasury has allocated money directly to County Governments (CGs). Establishing the County Climate Change Funds (CCCFs) has been essential in mainstreaming climate change adaptation in local-level planning and budgeting. These new funds have not only increased farmers’ resilience to unpredictable changes in climate but have also attracted additional blended climate finance from international development banks, the private sector, and development agencies. The ‘Financing Locally Led Climate Action’ (under the Ministry of Finance and National Treasury) has complemented these efforts by providing finance1 for climate change mitigation and adaptation efforts and strengthening CGs’ climate risk management capacities.  Key performance areas that CGs need to address to access FLLoCA funds include i) enactment of policies and regulations that enable finance flows, ii) establishment of CCCFs and Climate Change Units (CCUs), iii) community participation, and iv) establishment of County Climate Resilient Investment (CCRI) plans. The national treasury has complemented these efforts by providing finance2 for climate change mitigation and adaptation actions and strengthening CGs’ climate risk management capacities.