Absa Bank Kenya, United Nations Capital Development Fund(UNCDF) and United Nations Development Program(UNDP) have announced a strategic portfolio guarantee arrangement to unlock financing for solar-powered cold storage solutions and help close Kenya’s estimated US$ 2.1 billion cold storage deficit.

The partnership to scale solar-powered cold storage facilities, targets lowering post-harvest losses that see upto half of Kenya’s food production go to waste due to inadequate storage.

Absa Bank Kenya will use its asset-backed financing to lend to businesses investing in cold chain infrastructure, addressing persistent post-harvest losses driven by inadequate storage across key agricultural value chains, including horticulture, dairy, fisheries and meat.

At the core of this arrangement is a portfolio-sharing guarantee provided by UNCDF, which reduces lending risk and enables Absa Bank to extend financing to a sector that has historically faced limited access to capital due to high upfront investment costs and perceived market risks

Absa Bank Kenya will provide financing ranging from US$ 500,000 to US$ 2million (KSh 64 million to KSh 258 million) to aggregators, equipment suppliers, exporters and other large agricultural value- chain players. These businesses will deploy solar-powered cold storage solutions to smallholder farmers and agribusinesses, helping reduce post-harvest losses while improving their ability to access markets at scale.

The announcement comes as Phase II of the cold chain services programme in Kenya gets underway, implemented through a partnership between UNCDF and UNDP with support from the Mitigation Action Facility(MAF).

Phase I of the programme demonstrated strong market demand for solar-powered cols storage, with pilot results showing the potential to benefit over 60,000 farmers and create approximately 1,200 jobs. Within this collaboration, UNCDF provides risk sharing and blended finance instruments to unlock private-sector investments, while UNDP supports policy engagement, technical assistance and ecosystem coordination to accelerate the adoption of climate-smart cold-chain solutions.

According to the Kenya National Bureau of Statistics, agriculture contributes about a quarter of Kenya’s GDP and employs more than 40% of the population. However, estimates show that Kenya losses approximately 40% of its agricultural produce annually due to in adequate post-harvest handling and storage, highlighting a critical investment gap in cold chain infrastructure.

Omon Ukpoma-Olaiya, UNCDF Regional Investment Lead for East and Southern Africa and Arab States Region noted that the collaboration with Absa Bank aligns with UNCDF’s broader mandate of mobilising finance and catalysing investments that support inclusive growth in developing economies.

“Kenya’s cold storage demand is projected to grow significantly by 2030, underscoring the urgent need for scalable financing solutions that support the growth of agricultural infrastructure,” she said.

UNCDF is helping to de-risk lending and unlock private sector financing for solar-powered cold storage solutions.

“By partnering with Absa Bank, we aim to unlock investment from financial institutions and private sector partners to expand cold chain infrastructure, reduce post-harvest losses and improve market access and incomes for farmers and the agribusinesses,” said Ukpoma-Olaiya.

“The collaboration reflects Absa Bank Kenya’s commitment to enabling sustainable economic growth while advancing climate-smart solutions in the agricultural sector. Through this partnership with UNCDF and UNDP, we are unlocking innovative financing that empowers agribusinesses to invest in cold storage infrastructure, strengthening food security and improving livelihoods,” said Renato D Souza, Business Banking Director at Absa Bank Kenya.

Absa Bank Kenya to finance climate-smart agriculture

He added that the partnership positions Absa Bank Kenya at the centre of climate-smart agricultural financing by combining renewable energy solutions with value chain financing to reduce food loss, strengthen supply chains and enhance farmer incomes.

Dr Jean Luc Stalon, UNDP Kenya Resident Representative said, “Addressing post-harvest losses is not only a food security priority, but also a climate and economic opportunity. Through our partnership with UNCDF and financial institutions such as Absa Bank, we are unlocking investment in sustainable cold chain solutions that reduce emissions, strengthen rural livelihoods and build resilience across Kenya’s agricultural value chains.”

The financing will be structured through asset-based lending, with solar-powered storage equipment serving as collateral alongside the UNCDF portfolio guarantee. The model also supports Kenya’s transition to clean energy, particularly in the rural arears where access to reliable electricity remains limited.