Absa Bank Kenya, the United Nations Capital Development Fund (UNCDF), and the United Nations Development Programme (UNDP) have announced a portfolio guarantee arrangement to unlock financing for solar-powered cold storage solutions.

The initiative aims to address Kenya’s estimated $2.1 billion cold storage deficit, expanding asset-based financing to businesses investing in vital cold chain infrastructure across key agricultural value chains, including horticulture, dairy, fisheries, and meat.

According to data from the Kenya National Bureau of Statistics, agriculture accounts for nearly a quarter of Kenya’s GDP and employs over 40% of the population. However, an estimated 40% of agricultural produce is lost annually due to inadequate post-harvest handling and storage.

At the heart of the partnership is a portfolio-sharing guarantee provided by UNCDF. This risk-sharing mechanism reduces lending risks, allowing Absa Bank Kenya to provide asset-based loans ranging from USD 500,000 to USD 2 million (approximately Ksh. 64 million to Ksh. 258 million).

The capital will be extended to aggregators, equipment suppliers, exporters, and large agricultural value-chain players. These organizations will deploy off-grid, solar-powered cold storage units to smallholder farmers and agribusinesses, particularly in rural regions where grid electricity is limited or unreliable. Under this structure, the cold storage equipment serves as primary collateral alongside the UNCDF guarantee.

The funding arrangement marks the kickoff of Phase II of the broader cold chain services program in Kenya, jointly implemented by UNCDF and UNDP with backing from the Mitigation Action Facility (MAF). Phase I demonstrated high market demand, directly benefiting over 60,000 farmers and generating around 1,200 jobs.

Within the collaborative framework:

  • UNCDF delivers blended finance instruments and risk-sharing guarantees to draw in commercial capital.
  • UNDP provides technical assistance, policy coordination, and ecosystem engagement to accelerate sustainable adoption.

“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. This initiative positions Absa Bank Kenya at the centre of climate-smart agricultural financing by combining renewable energy solutions with value chain financing.” Renato D’Souza, Business Banking Director, Absa Bank Kenya