Kenya said on Thursday that it has commenced implementing a raft of reforms that will make the East African nation become a regional green financial hub.
Kamau Thugge, governor of the Central Bank of Kenya (CBK), told a continental forum in the Kenyan capital of Nairobi that the central bank has initiated a green finance classification system that will identify activities, investments, and projects that are considered green.
“We believe these reforms will spur transparency in green finance and attract domestic, regional, and international investors to support Kenya’s transition to become a green, low carbon economy,” Thugge said during the Africa Climate Business Forum.
The two-day meeting brought together government and business leaders as well as multilateral financial institutions from across the continent to review ways to meet Africa’s climate finance gap.
Thugge added that the reforms will be supported by a disclosure framework for banks that will be aligned to international standards, including the recently issued standards by the International Sustainability Standards Board.
He revealed that other reforms include the issuance of guidance on climate-related risk management to commercial banks. “The guidance is intended to facilitate banks in incorporating climate-risk related considerations in their governance, strategy, risk management, and disclosures frameworks.”
Thugge observed that the CBK has also joined the Network of Greening the Financial System, which brings together more than 100 central banks and financial supervisors, with a view to enhancing the role of the financial system in managing risks and mobilizing capital for green and low-carbon investments.