Climate mainstreaming in AECF institutional and operational initiatives in Kenya (006)

Climate Mainstreaming in AECF Institutional and Operational Initiatives

Context:

This technical assistance will build on the existing work already undertaken by AECF, a Kenyan NGO, to develop a more comprehensive, and globally relevant, climate risk management framework and build the capacity of AECF, NDAs and investees in climate risk screening and management, support investees to mainstream climate change in their investments and grow the climate finance portfolio. AECF’s goal is to primarily support SME institutions across Sub-Saharan Africa’s agribusiness, climate adaptation, renewable and clean energy access sectors.

AECF recognizes that SMEs across its sectors of operations are facing increasing levels of disruption due to extreme climate events such as droughts, floods and heatwaves. Other risks include transitional elements such as technology changes and consumer trends; and liability risks arising from failure to mitigate, adapt to, disclose, or comply with changing legal and regulatory expectations. SMEs in Sub-Saharan Africa have limited capabilities and capacity to address these changes due to their size. With this emerging disruptor and dysfunctional markets, SMEs now face a duality of challenges based on the impacts of climate on their investments and their capacity to respond, which can subsequently inhibit their operations and profitability 

Goal: The project seeks to strengthen AECF, NDAs and investees capacity to mainstream climate change at institutional and operational levels including in strategies, programs and activities.  

CAA technical assistance will contribute to:

  1. A revised Climate Risk Management Framework in line with global best practices, e.g., gender-responsiveness and social inclusion. 
  2. Absorbable climate tools to integrate climate change, conduct due diligence, understand the impact of climate change better, including support for SMEs to measure possible positive climate impacts of investments 
  3. Increased capacity of AECF staff and NDAs to identify climate risks, implement gender-responsive climate solutions and support investees to mainstream climate change in their investments.
  4. Better understanding by investees of climate change and how it may affect their businesses as well.  Sample of investees’ gender-responsive climate-smart plans.

Through stakeholder consultations and needs assessment Canadian global consulting firm, Baastel, will develop decision-making and due diligence tools and an overarching climate risk management framework for the Africa Enterprise Challenge Fund (AECF) to support SME institutions across Sub-Saharan Africa’s agribusiness, climate adaptation, renewable and clean energy access sectors. Specifically, the technical assistance will strengthen climate change governance capacity at institutional and operational levels in enhancing the capacity of three stakeholder groups 1) AECF, 2) NDAs of of Zimbabwe, Zambia, Kenya and Malawi, and 3) investees in climate change programming, climate risk screening, adaptation and mitigation activity prioritization and implementation of climate-smart actions.