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I&M gets Sh2bn loan risk insurance from Swedish fund
I&M Bank Retail and Business Banking Director Shameer Patel makes his remarks during the I&M Bank and B Lab Africa Partnership Capacity-Building Program launch on March 04, 2026 at the Hyatt Regency.
Photo credit: Francis Nderitu | Nation Media Group
I&M Bank Kenya has signed risk-sharing guarantee partnership worth $30 million (Sh3.88 billion) with the Swedish International Development Cooperation Agency (Sida), targeting sustainable and climate-aligned projects across Kenya.
The pair is funding the partnership on a 50:50 basis, where Sida will provide a guarantee of $15 million (Sh1.94 billion), covering eight years. This means that Sida will absorb potential loan defaults of up to Sh1.94 billion and will receive a fee from the bank for this insurance service.
The facility will support lending into sectors such as renewable energy, energy efficiency, clean transportation, green building renovations, circular economy and eco-efficient products.
Others include sustainable water and wastewater management, and sustainable management of natural resources and land use.
“This first Sida green transition guarantee reduces financial risk for the bank, helping to mobilise private capital for projects that contribute to Kenya’s Nationally Determined Contributions (NDCs) under the Paris Agreement,” said Marie Ottosson, head of development cooperation, Embassy of Sweden in Kenya.
Environmental awareness has seen businesses increasingly lean towards projects that are classified as green, such as installation of solar power, renovation of buildings and improved water management, creating opportunities for banks to grow their loan books by targeting such investments.
Corporates are also issuing climate bonds whose proceeds are invested in environmentally sustainable projects. The latest such bond issued in Kenya was the five-year, Sh20 billion Safaricom issuance last year, which was part of a Sh40 billion green bond programme.
“We are not simply making commitments to sustainability, we are backing those commitments with real capital,” said I&M retail and business banking director Shameer Patel after the signing of the partnership with Sida.
Banks have been partnering with international funds to secure tier two capital and risk sharing guarantees to drive their green financing programmes.
In December 2025, KCB Bank Kenya and the African Development Bank Group (AfDB) inked a $150 million (Sh19.4 billion) financing package to support the Kenyan lender’s green loans and trade finance programmes.
Green financing initiatives within the local banking sector are guided by the Kenya Green Finance Taxonomy and the Climate Risk Disclosure Framework, which were published by the Central Bank of Kenya (CBK) in April 2025.
The green finance taxonomy defines the assets or economic activities that qualify as environmentally sustainable, helping banks, regulators and investors identify such projects more easily.
The risk disclosure framework on its part requires banks to assess and report the potential impact of climate risk on their portfolios and operations, thus improving their lending decisions.
