The National Treasury on Tuesday, January 31, unveiled its intention of establishing a Green Investments Bank to cater to the growing need of tracking environment-friendly investments.
Through a statement, the bank announced that it will provide a range of financial instruments which could potentially include credit guarantees, risk-reduction facilities, debt and equity.
“The government will develop a green investment bank that will provide a range of funding instruments and associated incentives to support the public and private sectors in overcoming barriers to making green investments at scale.
“The institution will particularly focus on addressing the perception and/or reality that the capital costs and risks of green investments are too high, and the returns too low,” read part of the statement.
Additionally, the bank would also offer support and expertise to financing recipients and provide incentives to develop innovative financial instruments such as green bonds, blue bonds, resilience bonds and transactions using carbon credits.
The new institution is equally expected to be given a clear mandate to support climate change mitigation and adaptation and green growth.
In its plan, the government intends to explore the promotion of green investments by;
a) Directing investment to products and projects that have a positive environmental impact. Here, the government will set up the Green Investment Register (GIR).
The GIR will be the database of green investments comprising national priority projects in the green sector, flagship green projects, and green public-private partnerships.
b) Promoting green public procurement at the national and county government levels by developing guidelines to include environmental parameters in procurement.
c) Reforming and increasing financial support for research and development in the innovation and production of green technologies.
d) Working with industry leaders to identify green innovation and technology needs and review the research policies and strategies in order to align them with prioritised green research gaps and needs.
Through this, the government's objective would be to link companies and research institutions and deepen existing linkages and cooperation on projects.
e) Developing and providing financial and technical support to green innovations and incubation hubs for innovators and budding green technologies.
f) Establishing and financing Green Special Economic Zone in all 47 counties through Kenya Green Investment Bank (KeGIB).
Interestingly, the government has also proposed the exploration and viability of a carbon tax to reduce Greenhouse Gas (GHG) emissions.