Manufacturing, transport, and the agricultural sector have been identified as those that offer the most significant opportunities in terms of green projects.
“The manufacturing sector which is a significant contributor to our GDP is also a major contributor to environmental damage if not managed well. We have to ensure that the environmental impact of the manufacturing sector is addressed.” said Dr Habil Olaka, CEO of Kenya Bankers Association (KBA).
He made these remarks during the ongoing four-week engagement that features four regional banking sector association CEOs including KBA, Ms. Tusekelege Joune, Executive Director – of Tanzania Bankers Association; Mr. Tony Francis Ntore, CEO – of Rwanda Bankers Association; Mr. Wilbrod Humphreys Owor, CEO – Uganda Bankers Association.
“The other sector is transport which consumes a lot of dirty fuel that impacts negatively on the environment in terms of its carbon footprint. And finally, we have the agricultural processing sector that can be greened and have a significant impact on the social life of Kenyans living in the rural area,” said Dr Olaka.
Sustainability in the Banking Sector
According to Dr Olaka, sustainability has become a key topic of discussion in the banking industry. He said upfront investment and capital needed for green projects are quite high and this has led banks to come into this space to assist enterprises in sourcing the required capital.
“We have ensured that the goals of banks are aligned to the green agenda. We have guidelines that align banks with certain behaviors. We have sustainable green finance principles and have done capacity building for banks. We have seen banks come up with products that are aligned to green finance,” said Dr Olaka.
The bankers lobby has formed partnerships with other world organizations including the London Stock Exchange, to enable Kenya’s green bonds program to work. He said Kenya has a number of SMEs that are already in the green space where they can be able to access funding for green projects.
He disclosed that Kenya’s green space already has new products, standards, and regulations that are already being developed, including uniform financial reporting standards so that players can have a common financial reporting standard.
According to Dr Olaka, the Association has not set a target for banks concerning the proportion of their loan books that should be green.
“We are not giving any specific prescriptions to the banks on how many green projects they should finance. We are not putting any thresholds but perhaps this is something we will think about when all banks join the bandwagon,” said Dr Olaka.