UNCDF, Absa Bank and UNDP Unlock Financing to Close Kenya’s $2.1 Billion Cold Storage Gap

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

The partnership will enable Absa Bank Kenya to expand asset-based financing 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 the 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.

Under the arrangement, Absa Bank will provide financing ranging from USD 500,000 to USD 2 million (approximately KES 64 million to KES 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 cold 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 investment, 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 loses approximately 40% of its agricultural produce annually due to inadequate post-harvest handling and storage, highlighting a critical investment gap in cold chain infrastructure.

“The collaboration reflects Absa Bank’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.

He added: “This initiative 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.”

Through the portfolio guarantee, UNCDF plays a central role in de-risking lending and catalysing private capital into Kenya’s cold chain sector, enabling financial institutions to scale investment in sustainable agricultural infrastructure.

Omon Ukpoma-Olaiya, UNCDF Regional Investment Team 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. “Through this portfolio guarantee, 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 agribusinesses.”

Dr. Jean Luc Stalon, UNDP Kenya Resident Representative, added: “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 like 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 cold storage equipment serving as collateral alongside the UNCDF portfolio guarantee. The model also supports Kenya’s transition to clean energy, particularly in rural areas where access to reliable electricity remains limited.

This partnership contributes to the broader rollout of solar-powered cold storage solutions in Kenya, supporting increased private sector participation and advancing the country’s climate commitments under its Nationally Determined Contributions (NDCs).

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