Absa Bank,Eco.Business Fund signs KES1.26Bn Climate-smart Agriculture Financing pact
Eco.BusinessFund has partnernerd with Absa Bank Kenya Plc and signed a Sh1.26 billion climate-smart agriculture financing deal with
The funds will allow the lender to lend to domestic and export businesses participating in the country’s agricultural value chains.
It is expected that the fund will improve resource efficiency, increase food security, and mitigate the effects of climate change in the sector.
“Supporting sustainable and climate-resilient agricultural practices and strengthening local value chains are some of the fund’s top priorities. Our investment will contribute towards equipping various value chain actors in Kenya including agricultural producers, aggregators, processors and exporters,” eco.business Fund Board of Directors chairperson Michael Ever said.
“These clients will use the finance and knowledge to achieve more biodiversity and climate friendly sustainable production and exports while alleviating food insecurity. It is also the first step in a great partnership with the Absa Group across sub-Saharan Africa.”
Kenya’s agriculture sector is a major contributor to the economy, accounting roughly 50 percent of GDP (including linkages), export revenues (60 percent), and workforce (40 percent).
The sector is, however, confronted with macroeconomic and climate-related challenges, resulting in stagnant yields as well as food insecurity.
High financial and technical threshold are needed to implement climate-smart agriculture practices, ensuring natural resource efficiency, biodiversity conservation, and climate change mitigation.
“As a bank, we are fully cognisant of the immense contribution that agriculture makes to Kenya’s economy as the country’s economic mainstay and hence our collaboration with such like-minded partners towards the continuous growth and development of the sector,” Absa Bank’s Business Banking Director Elizabeth Wasunna said.
In the first round, more than 300 value chain actors and the bank’s clients will be trained on post-harvest loss reduction and financial literacy in the cereal, horticulture, and dairy value chains.
The Fund will also host relationship-building and information-sharing roundtable discussions with exporters, aggregators, and processors on prioritizing sustainability in two emerging export crops, namely avocados and macadamias.