State tightens oversight of climate funds

The government has introduced new guidelines aimed at tightening oversight, improving coordination and ensuring that all climate-related projects funded through the Green Climate Fund align with national priorities.

The National Treasury, in a circular dated February 18, established a formal “no-objection procedure” that all project developers must follow before accessing funding from the global climate financing body.

The move is expected to change how public agencies, private firms and international organisations design and submit climate projects in Kenya.

In the new framework, every proposal must secure a No Objection Letter from the National Treasury, which is the National Designated Authority official interface with the GCF.

Without this approval, projects cannot proceed for consideration at the global level.

The guidelines are intended to address gaps in coordination and oversight, where multiple actors have pursued climate financing with limited central alignment.

By formalising the approval process, the government is seeking to ensure all projects are consistent with Kenya’s development blueprint, climate strategies and legal frameworks.

Under the new rules, project proponents must first submit a concept note to the Treasury, which will then assess whether it aligns with national priorities such as Vision 2030, the Climate Change Act and Kenya’s Nationally Determined Contributions.

Proposals will also be reviewed against Green Climate Fund investment criteria.

The process introduces a multi-layered review system involving an inter-ministerial technical committee composed of representatives from government, the private sector and civil society.

The committee is tasked with evaluating proposals, advising on their suitability and ensuring key stakeholders have been consulted.

If a project is deemed misaligned or incomplete, it will be rejected, with applicants given an opportunity to revise and resubmit within a specified timeframe. Only proposals that meet the required standards will receive the no-objection clearance.

Beyond alignment, the guidelines seek to curb duplication of projects and improve efficiency in the use of climate finance.

Project developers will be required to demonstrate that their proposals complement, rather than replicate, existing initiatives.

This is aimed at avoiding fragmentation and ensuring that limited resources are directed towards high-impact interventions.

Stakeholder participation is another key pillar of the new framework. Developers must show evidence of comprehensive consultations with affected communities, county governments and relevant sector players.

This requirement is intended to ensure that projects are locally grounded and responsive to real needs, rather than being externally driven.

The guidelines also place strong emphasis on sustainability and accountability.

Proposals must include clear plans for long-term viability, including how activities will be maintained after funding ends and whether they impose any financial obligations on the government.

Environmental and social safeguards, as well as risk mitigation measures, are also mandatory components of the evaluation.

In a shift aimed at promoting local ownership, the rules encourage greater involvement of domestic institutions, known as Direct Access Entities, in accessing climate funds.

International organisations seeking to implement projects in Kenya will be required to demonstrate added value and work with local partners.

This is expected to help rebalance the flow of climate finance, which has historically been dominated by multilateral agencies and foreign entities, often sidelining local players and communities.

The framework further introduces transparency measures, including a formal scoring system for evaluating proposals and an appeals mechanism for applicants whose projects are rejected. The Treasury will also maintain a record of all issued approvals and periodically disseminate information to stakeholders.

The introduction of the guidelines comes as Kenya seeks to scale up its access to climate finance amid growing pressure from climate change impacts such as droughts, floods and shifting weather patterns. While the GCF represents a major source of financing for developing countries, accessing its resources has often been complex and highly competitive.