Our refugee response must embrace green economy

For decades, refugee response systems across Africa were built around emergency relief. Food aid, fuel deliveries, and donor-funded operations formed the backbone of humanitarian assistance. But shrinking global aid budgets, rising displacement, and worsening climate pressures are now forcing governments and humanitarian agencies to rethink the future of refugee management.

According to UNHCR, as of April 30, 2026, Kenya hosts 847,780 refugees and asylum-seekers, making it one of Africa’s largest refugee-hosting countries. Dadaab alone hosts more than 414,000 refugees and asylum-seekers, while Kakuma and Kalobeyei continue to shelter hundreds of thousands more.

As humanitarian needs rise, traditional aid systems are increasingly strained and financially unsustainable. Recent aid cuts and food ration reductions have further exposed the vulnerability of systems heavily dependent on external humanitarian financing. At the same time, rising fuel prices and supply chain disruptions have exposed fragility of fossil fuel-dependent humanitarian operations. Across refugee-hosting areas, renewable energy is emerging not only as an environmental solution, but also as an economic and operational necessity. In Kakuma and Kalobeyei, solar mini-grids, solar home systems, and clean-energy enterprises are steadily transforming access to affordable and sustainable power for households, businesses, schools and community.

Humanitarian organisations such as the Danish Refugee Council Kenya are increasingly investing in solar-powered offices, boreholes, schools, and community service facilities as part of broader sustainability efforts. Beyond reducing operational costs, green energy investments are also opening new livelihood opportunities in solar installation, recycling, repair services, waste management, and other emerging green enterprises for both refugees and host communities.

Kenya now has a unique opportunity to position refugee-hosting areas as hubs of green growth, climate resilience, and circular economy innovation rather than viewing refugees solely as aid recipients. Across Kakuma and Dadaab, refugees and host communities are increasingly engaging in recycling, climate-smart agriculture, clean energy businesses, and small-scale enterprises that contribute to local economies and environmental sustainability. What was once considered waste is becoming an economic resource.

This shift aligns closely with Kenya’s Shirika Plan and broader efforts to move beyond traditional encampment models, towards integrated settlements that benefit refugees and host communities. Increasingly, evidence shows that refugees could contribute significantly to local economies when given access to markets, livelihoods, and financial systems. Humanitarian organisations have consistently emphasized that refugees are bankable and could significantly contribute to local economies through entrepreneurship, labour, innovation, and small businesses that support economic growth and social cohesion.

Financial inclusion should also remain central to this transition. Across refugee-hosting regions, many refugee and host community entrepreneurs continue to face access barriers to banking, credit, insurance, and formal financial systems despite operating viable businesses. Recent financial inclusion and market systems initiatives bringing together financial institutions, government agencies, refugee-led businesses, and private sector actors demonstrate the growing recognition that inclusive financial systems are essential for local economic growth. Expanding access to affordable and culturally responsive financial products and services can unlock entrepreneurship, strengthen local markets, and support more sustainable livelihoods.

However, several challenges exist. Many refugee and host community households in Dadaab and Kakuma still rely heavily on firewood and other traditional fuels for cooking, contributing to environmental degradation while exposing women and children to protection risks during firewood collection. Circular economy initiatives remain critical in creating cleaner communities, new jobs, and resilient local economies.

Kenya has an opportunity of becoming a continental model for refugee inclusion by anchoring refugee responses in renewable energy, circular economy solutions, inclusive financial systems, and resilient local markets.

-The writer is country director, Danish Refugee Council in Kenya