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How green financing is powering the future of Kenya’s clean energy
Kenya’s strong renewable base, growing pipeline of clean energy projects and access to local and international investors place it in a favourable position to use green bonds and sustainable loans more widely.
Kenya’s energy and capital markets are changing in ways that quietly shape daily life, from how phones stay connected in remote areas to how investors think about risk and return.
As the country deepens its commitment to clean power, green finance is emerging as a practical tool to fund that transition at scale. Kenya stands out in Africa for its heavy reliance on renewables.
Recent statistics show that roughly 80 percent of its electricity mix comes from renewable sources, led by geothermal, hydro and wind.
Electricity demand is rising as more homes, businesses, and industries connect to the grid and seek alternatives to high and volatile power costs.
This combination, strong renewable resources and growing energy needs, makes the question of how to finance new infrastructure particularly urgent.
Green bonds are one answer that is gaining momentum. They are conventional debt instruments whose proceeds are earmarked for projects with clear environmental benefits, such as renewable energy or clean transport.
Issuers commit to using the funds for eligible projects and provide reporting on financial performance and environmental impact. This gives companies access to longer term, purpose linked capital, while investors gain transparency on how their money is used.
Globally, the sustainable bond market has grown from almost nothing 15 years ago to a cumulative total of around $6 trillion in green, social, sustainability and sustainability linked bonds.
A 2025 World Bank market update estimated that labelled sustainable bonds had reached about $6.3 trillion in cumulative issuance, with green bonds accounting for the largest share.
Sustainability linked debt is now a mainstream way of funding long term assets rather than a niche product.
Across Kenya, the link between green finance and real world infrastructure is becoming clearer. Telecom towers, commercial buildings, factories and farms are adopting grid tied and off grid solar systems to reduce dependence on diesel and manage electricity costs.
Industry analyses point to rapid growth in solar capacity, driven by falling panel prices, supportive regulation and rising demand for reliable, clean power. When such projects are financed through green bonds, the cost and tenor of capital can better match the long life of solar and energy efficient equipment, reducing pressure on short term borrowing.
Recent transactions in Kenya’s telecom sector illustrate how this model works in practice. In late 2025, Safaricom issued its debut green bond.
The offer sought Sh15 billion but attracted applications of about Sh41.4 billion, leading the company to exercise a Sh5 billion greenshoe and take up Sh20 billion. Proceeds are earmarked for projects such as solarisation of network sites and energy efficient upgrades.
Kenya’s strong renewable base, growing pipeline of clean energy projects and access to local and international investors place it in a favourable position to use green bonds and sustainable loans more widely.
This bond followed earlier sustainable lending activity. In 2023 and 2024 Safaricom secured sustainability‑linked loan facilities from a consortium of local banks, with the total reaching Sh30 billion.
These loans link pricing to progress against defined. environmental, social and governance targets, including reducing carbon emissions and strengthening inclusion metrics. Together, the bond and the loans offer a case study of how a large issuer can align its financing strategy with wider sustainability objectives while tapping both capital markets and bank funding.
For households and small enterprises, the benefits of such investments appear in more reliable services and a cleaner local environment. Solar and hybrid systems can reduce outages and dependence on fuel deliveries for critical infrastructure such as telecom sites, health facilities and water schemes.
Replacing diesel generators with renewables cuts local air and noise pollution, improving conditions for communities near these installations. Over time, better‑managed energy costs also support more stable pricing and continued investment in coverage and capacity.
For investors, green bonds and sustainability‑linked loans offer familiar features -coupons, maturities, credit risk - combined with additional information on environmental performance.
Transactions are typically guided by published criteria, external reviews and post‑issuance reporting, which help address concerns about “greenwashing” and allow investors to track progress against stated goals. As scrutiny of sustainability claims rises, this transparency is becoming a differentiator for issuers seeking long‑term, patient capital.
When designed and implemented rigorously, these instruments can bridge the gap between the long‑term nature of energy and infrastructure investments and the medium‑term horizons of traditional lending - aligning financial discipline with environmental responsibility.
The Writer is the Group Chief Finance and Innovation Officer, Safaricom PLC
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