Kenya targets $150 billion biodiversity financing in UN-backed plan

Kenya is aiming to mobilize as much as $150 billion in biodiversity-related financing over the next decade as it looks to narrow funding gap and attract investment into conservation and the sustainable use of natural resources. The effort is anchored on a United Nations-backed initiative known as the Biodiversity Finance Initiative (BIOFIN), which will act as a national platform to channel capital into nature-based projects and related economic activity.

At the same time, Nairobi is preparing to issue its first $500 million green sovereign bond before the end of the fiscal year in June, with support from the World Bank. The Central Bank of Kenya said the planned issuance is part of a broader external borrowing schedule aimed at strengthening funding options while easing pressure on public finances. Officials say the bond is intended to draw in climate-focused investors as global financing conditions remain uneven.

CBK seeks faster funding relief

The financing push comes as global oil prices have risen following geopolitical tensions involving Iran, adding pressure on fuel-importing economies such as Kenya. Higher energy costs have begun feeding into transport and food prices. Central Bank of Kenya Governor Kamau Thugge said the country has requested faster support from the World Bank to cushion fuel supply and inflation impacts, without disclosing the amount under discussion.

Across emerging markets, the pressure is becoming more visible. Kristalina Georgieva, managing director of the International Monetary Fund, said at least a dozen countries have approached multilateral lenders for assistance as higher energy costs and tighter financial conditions weigh on budgets and exchange rates. She noted that the requests reflect strain on public finances rather than isolated fiscal challenges.

Investor response to Kenya’s financing signals has been steady. The country’s Eurobonds recorded modest gains, with the 2034 and 2048 maturities rising by about one cent each. They traded at 89.21 cents and 99.25 cents on the dollar, respectively, suggesting cautious market confidence that external financing efforts could help stabilize near-term funding needs.

Central bank buffer supports economic stability

Kenya’s external position continues to be supported by foreign exchange reserves of more than $13 billion, equivalent to about 5.8 months of import cover. Policymakers say the buffer gives the central bank room to manage short-term shocks, even as they acknowledge that prolonged high oil prices could place pressure on the shilling and increase import costs.

To soften the impact on households, President William Ruto recently signed a measure reducing value-added tax on petroleum products to 8 percent from 13 percent for three months. The government said the move is intended to lower transport and food distribution costs as households continue to adjust to higher living expenses.