Opinion: Banks must lead in financing Africa’s green growth

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African countries missed past industrial revolutions and now risk falling behind in the fourth, which is defined around green economies, writes KCB Group CEO Paul Russo, in today’s opinion article. The continent is rich in mineral resources and human capital, which it could utilise to shift from a raw material supplier to a producer of finished products.

• Mr. Paul Russo, who also serves as Chairman of the Kenya Bankers Association (KBA), affirms that the bank is committed to green growth and has set an ambition to allocate 25% of its loan portfolio to green initiatives by the end of the year. 

• He stresses that Africa’s “fourth revolution,” powered by clean energy and sustainability, offers the continent a chance to rewrite its industrial story, if decisive financing and execution are prioritised.

Opinion article

By Paul Russo

Last week, African leaders and policymakers converged in Addis Ababa, Ethiopia, for the Africa Climate Summit 2.0. This gathering built on the 2023 forum held in Kenya, where, among other things, attendees took stock of the progress of the proclamations that emanated from the Nairobi Declaration.

At the centre of these discussions will be how to prop up the role of the African Green Industrialisation Initiative (AGII) and the Accelerated Partnership for Renewables in Africa (APRA), now considered as the accelerators of the continent’s industrial transformation, after their endorsement by the African Union early this year.

The initiative brings together financiers across the continent to mobilise resources, de-risk projects, and accelerate investments in renewable energy, sustainable industries, and climate-smart solutions.

For decades, Africa’s Industrialisation story has been written in the margins of global growth. The continent, rich in natural resources and human capital, has often been positioned as the world’s supplier of raw materials rather than a manufacturer of finished products. But as the global economy pivots towards low-carbon industrial growth, Africa has an unprecedented opportunity to rewrite this narrative.

At its core, AGII has its premises on multi-sectoral efforts that lean towards designing industries that are competitive in tomorrow’s marketplace. Basically, prioritising energy-intensive but high-value sectors – including green steel, electro-fertilisers, battery and component assembly – and agro-processing can anchor domestic value chains and serve export markets in a climate-conscious world.

Renewable energy

However, green industrialisation cannot thrive without reliable, affordable energy. That is where APRA comes in. With an ambition to double Africa’s renewable energy capacity by 2030, APRA is designed to crowd in investment, lower risks, and unlock large-scale deployment of solar, wind, geothermal, and hydropower projects to position Africa not just as a consumer of clean energy but as a global leader in renewable supply chains.

Africa’s chance of industrialisation in the 21st century depends less on repeating yesterday’s fossil-fuelled model and more on marrying two things that have long been treated separately. AGII and APRA are precisely those two halves complementary, politically backed and, if executed well, will be transformational.

This vision will not be realised by mere talk-shops; it requires massive financial mobilisation estimated at $2 trillion by 2030 for clean energy, infrastructure, and industry. Finance remains the biggest hurdle to scaling renewables.

Enter the African Continental Free Trade Area, the trade pillar that unlocks economies of scale, harmonises regulation, enables cross-border power and goods flows, and, of course, supercharges finance. For financiers, a continental market reduces offtake risk.

For entrepreneurs, it means factories can sell across borders seamlessly and for governments, it means regional value chains can finally flourish. Complemented by the Pan-African Payment and Settlement System, intra-African trade in green goods will become faster, cheaper, and more reliable.

History rarely offers second chances. Africa missed the first industrial revolution, arriving too late to benefit from coal and steam. It was marginalised during the second, when oil and assembly lines transformed Europe and Asia. The third, defined by digital technologies, found Africa still struggling with connectivity and infrastructure gaps. The fourth revolution, defined by sustainability, clean energy, and green industry, is Africa’s top prize to claim.

Resource mobilisation

As a Pan-African banking institution focused on green growth, KCB Group has set a precedent as a critical player in resource mobilisation guided by our ambition to invest 25 per cent of the group's loan portfolio in green initiatives by the end of this year. Additionally, as an accredited entity of the Green Climate Fund (GCF) under category B, this means the bank can access between $50 million and $250 million per project.

Just last week, the bank submitted a funding proposal to GCF for investment in climate-smart technologies for businesses worth $80 million, subject to GCF Board approval in 2026.

There are real opportunities at stake. Africa’s young workforce, abundant critical minerals and rapidly growing domestic markets mean that, with green energy and industrial policy working together.

However, time is not on our side as global markets are already rewarding low-carbon suppliers and moving investment to regions with secure, cheap green power. However, revolutions of such a nature are not won by declarations, they are won by decisive action, bold financing, and relentless execution.

The article is republished with permission. It first appeared in The Daily Nation.