Risk-sharing facilities will help unlock financing for climate-smart cold storage infrastructure and strengthen agricultural value chains across Kenya.

The United Nations Capital Development Fund (UNCDF) has deployed portfolio guarantees totaling USD 3.11 million through Absa Bank Kenya and Co-operative Bank of Kenya to expand financing for solar-powered cold storage infrastructure across Kenya.

The arrangement includes a USD 2.02 million portfolio guarantee for Co-operative Bank of Kenya and a USD 1.09 million portfolio guarantee for Absa Bank Kenya. The guarantees will help de-risk lending by both financial institutions, enabling them to extend financing to businesses investing in cold-chain infrastructure. This will help address financing gaps in a sector that plays an important role in Kenya's food systems, agricultural productivity and climate resilience.

The guarantees are being deployed under the Kenya post-harvesting solar cooling initiative, jointly implemented by the United Nations Capital Development Fund (UNCDF) and the United Nations Development Programme (UNDP), with donor support from the Mitigation Action Facility. The initiative aims to reduce greenhouse gas emissions and post-harvest losses in Kenya’s agricultural sector by accelerating the deployment and adoption of solar-powered cold storage solutions through technical assistance, catalytic financing and private sector investment mobilisation.

By providing risk-sharing facilities to local financial institutions, UNCDF is helping reduce barriers to lending in a market where access to finance remains a major constraint for cold chain investments. The guarantees are designed to mobilise additional private sector capital for climate-smart agricultural infrastructure while supporting food security, economic opportunity, and resilience.

“Through these guarantees, UNCDF is helping financial institutions expand lending to a sector with significant development potential. This is how we put our capital deployment mandate to work, using catalytic finance to unlock larger flows of private capital for investments that strengthen agricultural markets, improve resilience and support sustainable growth.”

“Access to finance remains one of the key barriers to scaling climate-smart cold storage solutions in Kenya,” said Omon Ukpoma-Olaiya, Regional Investment Team Lead for East and Southern Africa and Arab States at UNCDF. “Through these guarantees, UNCDF is helping financial institutions expand lending to a sector with significant development potential. This is how we put our capital deployment mandate to work, using catalytic finance to unlock larger flows of private capital for investments that strengthen agricultural markets, improve resilience and support sustainable growth.”

Under the arrangement, Absa Bank Kenya will provide direct loans of up to $2 million to aggregators, equipment suppliers, exporters and other large agricultural value-chain players. The financing will enable these businesses to deploy solar-powered cold storage solutions for smallholder farmers and agribusinesses, helping reduce post-harvest losses and improve market access at scale.

“The initiative demonstrates how collaboration between development partners and financial institutions can reduce investment barriers while supporting more resilient and sustainable agricultural value chains.”

“Through this partnership with UNCDF and UNDP, we are helping unlock financing solutions that enable agribusinesses to invest in the infrastructure needed to grow and compete,” said Renato D'souza, Business Banking Director at Absa Bank Kenya. “The initiative demonstrates how collaboration between development partners and financial institutions can reduce investment barriers while supporting more resilient and sustainable agricultural value chains.”

Under the arrangement, Co-operative Bank of Kenya will provide financing ranging from USD 30,000 to USD 70,000 per eligible borrower. The financing will target micro, small and medium-sized enterprises (MSMEs) investing in the acquisition, installation and operation of solar-powered cold storage and related post-harvest infrastructure, with a focus on smallholder co-operatives and agri-SMEs operating in priority counties, including Nakuru, Meru, Mombasa and Turkana among others.

"This partnership with UNCDF and UNDP enables us to expand access to affordable financing for agri-SMEs and co-operatives investing in solar-powered cold storage solutions."

The Director, Co-operative Banking Division at Co-operative Bank of Kenya, Vincent Marangu said, “At Co-operative Bank, we are committed to supporting sustainable agribusiness growth through innovative financing solutions. This partnership with UNCDF and UNDP enables us to expand access to affordable financing for agri-SMEs and co-operatives investing in solar-powered cold storage solutions. Beyond reducing post-harvest losses, this initiative strengthens farmer incomes, enhances food security, and promotes climate-resilient agricultural value chains across Kenya. As a leading co-operative bank, we remain dedicated to empowering communities and driving inclusive economic growth.”

He added, “The Bank will leverage its extensive network of 223 branches and deep-rooted relationships with farmer co-operatives and agribusinesses to accelerate the adoption of climate-smart cold storage solutions across Kenya.”

The initiative will support investments across agricultural value chains including horticulture, dairy, fisheries and livestock, enabling businesses to deploy sustainable cold storage technologies that reduce food loss, preserve product quality and improve market access.

The broader initiative is expected to improve access to cold storage services for more than 60,000 farmers, support the creation of approximately 1,200 jobs, and mobilize additional private-sector investment into Kenya's cold-chain sector.

“Addressing post-harvest losses is not only a food security priority, but also a climate and economic opportunity,” said Dr. Jean Luc Stalon, UNDP Kenya Resident Representative. “Through our partnership with UNCDF and financial institutions, we are helping unlock investment in sustainable cold-chain solutions that contribute to reducing emissions, strengthen rural livelihoods and build resilience across Kenya's agricultural value chains.”

The deployment of the guarantees marks an important step in expanding access to financing for cold-chain infrastructure in Kenya. It also demonstrates how UNCDF's risk-sharing instruments can help mobilise investment into sectors that are critical to food security, climate resilience and economic growth.