The Co-operative Bank of Kenya has inked a financing deal with a Luxembourg-based impact investment fund that will see the bank fund local businesses working in the agricultural sector. Following the deal, Co-op Bank has received Sh. 1.1 billion loan from the fund for onward lending to agribusinesses.
According to Co-op Bank chief executive officer Dr. Gideon Muriuki the loan that came from eco.business will provide much-needed financing for agricultural businesses in Kenya at a time when the economy is reeling from the effects of the coronavirus pandemic.
“This new partnership with eco.business Fund that makes available $10 million for on-lending to farmers is a winner on many fronts,” Dr. Muriuki said. He added that the new partnership provides financing that is structured to suit the financing cycles of agriculture. “It also comes with the support mechanisms to assist farmers to make a successful pivot towards sustainable, climate-smart agriculture,” he said.
The partnership and the facility marks the first investment in Kenya for eco-business Fund. “We are excited about our first investment in Kenya. Kenya is a country rich in biodiversity and opportunities for sustainable development. This new partnership with Co-op promises to be a fruitful one as the bank is well positioned to act as an enabler of sustainable production practices,” Chairperson of the board of directors at eco.business Fund Jens Mackensen said.
This fund specializes in promoting use of natural resources, and mitigating and adapting to climate change. It also supports sustainable operations in agriculture, fishery, forestry and tourism sectors and targets businesses that hold sustainability certification or seeking loans to make sustainable investments.
Some of the agribusinesses that are set to benefit from this fund include those in the those in the coffee, tea, and horticulture sectors. Over the recent few years, Co-op Bank, which is the third largest bank in Kenya, has taken the lead position as one of the few lenders in Kenya that are growing their focus on sustainability financing that rides on Environmental and Social Governance (ESG) practices.
