Support with climate opportunities, climate risks management and adaptation finance for a Financial Institution in Kenya

adelphi was awarded by Proparco with a framework contract to mainstream climate considerations into the decision-making frameworks and practices of partner FIs. adelphi accompanies participating banks in incorporating climate considerations into their strategies and operations.

As part of this Framework contract, adelphi  provided climate technical assistance to KCB Bank Kenya (KCB), supporting them in streamlining their climate strategy, increasing their product offering in climate finance, including the use of blended finance and de-risking mechanisms, improving their due diligence processes and reporting in alignment with international and national standards. The first phase that ran from October 2024 to April 2025 focused on assessing and managing climate-related risks and supporting KCB with its first climate stress-testing exercise. Phase 2 ran from May 2025 to February 2026 with adelphi supporting KCB with the following key activities: 

1) providing guidance on IFRS S2 and Central Bank of Kenya reporting requirements. This included capacity building for KCB group (including teams located in Rwanda, South Sudan, Tanzania, Uganda) about various climate-related reporting frameworks, data collection need, as well as deep-dive about IFRS S1 and S2; review and provision of recommendation for KCB first IFRS S2 report; recommendation about additional data needs for the next reporting. 

2) refining the due diligence process to facilitate the identification of climate-related risks and potential opportunities: this included an assessment of KCB’s core banking system to integrate data points relevant for climate-risk assessment, as well as supporting information relevant for DFI reporting; testing and feedback with the coding team in charge of the core banking system. 

3) supporting the design of a new climate product and developing a roll-out plan to support pipeline building: analysis of the local financial system, stakeholders and existing de-risking instruments that could be used for the new product, including Proparco guarantee schemes; co-creaton workshop with various departments of the bank to design green products relevant for the bank; drafting of product fiches taking into account KCB priorities, local and international incentives that the bank could use do either de-risk its portfolio and/or offer more favourable conditions to final beneficiaries; Co- development of a roll-out plan with the selected products. The results of this workstream were gathered in a comprehensive final report and were used to develop KCB’s climate strategy and objectives in term of green product development and positioning in the Kenya. 

4) development of an adaptation catalogue that list relevant adaptation measures based on relevant climate-related risks. The catalogue includes relevant measures for a specific sector, risk and region, and also identifies E&S and maladaptation risks that the bank should take into account before financing such measure. 

5) support with reporting towards various green taxonomies such as IFC, Proparco, GCF and local taxonomies such as the Green Kenyan Taxonomy: this includes providing trainings on these taxonomies and key criteria to be taken into account, as well as integration of these criteria within the due diligence tool,  to ease the collection of necessary documents on an ex-ante basis (compared to a collection of key documents done after signature of the loan).

All activities have been accompanied by capacity building sessions for bank staff and management, including for subsidiaries of the group located in Rwanda, Uganda, South Sudan and Tanzania.