New legislation in green financing a boost for Kenya's agricultural exports

A bio-fertiliser plant at the Del Monte farm in Thika, Kiambu County. [Courtesy]

In the past year, the Kenyan government has championed new legislation in green financing that are set to benefit the country’s agricultural sector and improve the fortunes of both small and large market players.

This comes at a time when the global agricultural market seems set for major upheavals following realignments of trade relations between major players including the European Union, United Kingdom and the US.

The new laws and policies enacted and/or under review, could open up new markets and opportunities for Kenya’s produce, in these countries that are among Kenya’s top destinations for its agricultural exports.

One of the leading policy interventions by the government over the past year is setting up the Kenya Green Investment Fund (GIF).

Backed by the World Bank and other development partners, the Sh5 billion fund is meant to finance green investment and job creation, with a special focus on small and medium-sized enterprises practicing climate-friendly and sustainable agriculture.

The GIF will go a long way in providing start-up and business development financing to small and medium enterprises in the country’s agricultural sector that are looking to make their agri-business ventures more climate-friendly.

This is further important given the depressed level of investments flowing into the agricultural sector in recent times. Data from the Central Bank of Kenya, CBK indicates that the growth in credit to the country’s private agricultural sector has shrunk from 22.3 per cent per year in 2022, to 9.7 per year in 2025.

The CBK noted that the increased frequency of climate-induced shocks including floods and prolonged droughts adversely impacted the performance of climate-vulnerable sectors such as agriculture and tourism.

Currently, many parts of the country are experiencing drier than normal conditions coming on the back of the failed October-December short rains, which will likely see many livelihoods in the country experience high food costs and shortages in the coming months.

Agricultural firm Del Monte Kenya is among those leading the private sector in promoting sustainable business practices throughout its value chain. This includes promoting water sharing and conservation to ensure continuity of farm operations in times like these.

Working with other private and public partners, the company has invested significantly to update infrastructure and irrigation systems in the Thika and Athi Rivers. 

This investment, bolstered by engagements with other water users and land owners to share and conserve these water resources, ensures that farmlands in and around the rivers are properly cushioned from water scarcity or flooding.

Other investments in modern facilities in Thika, Kiambu County, such as a new mango processing plant and a fertiliser factory that converts pineapple waste into biofertiliser, boost production efficiency and elevate the country’s standing in sustainable agriculture. 

Kenya’s Forest Management and Conservation Bill 2025, which went through its first reading in November last year, is another piece of regulation that will bolster initiatives such as the GIF

The proposed law provides for more tangible protections for public and private forests, and introduces new requirements for the sustainable management of dryland forests.

This is a deliberate show of intent on the part of the country to the global economy that it is taking deliberate policy steps to facilitate the adoption of climate-friendly business practices in its agricultural sector.

At the moment the global economy is characterised by renewed trade jitters attributed to tariff disputes, fractured supply chains and geo-political tensions.

As one of the leading global distributors of fruit and vegetable products, as well as tea, coffee and cut flowers, Kenya stands at a vantage point from which to explore and take advantage of opportunities emerging from these realignments.

According to data from the Kenya National Bureau of Statistics, KNBS, the country’s fruit and vegetable exports went up 21 per cent from 587,000 tonnes in 2023 to 712,000 tonnes in 2024, bringing in Sh94 billion in foreign exchange. The volume of fruit exports similarly increased from 188,100 tonnes in 2023 to 225,400 tonnes in 2024.

The country is also among global exporters of crucial agricultural commodities including tea, avocado, bananas, cassava and sweet potatoes. The government has identified these and other crops, known for their versatile uses through value addition, to drive the country’s agricultural sector.

The new legislation that supports sustainable agriculture provides significant potential for the country to earn billions more in export revenues, earnings that will improve the fortunes of both small and large agricultural industry players.