Sustainability Report: Absa splashed Sh60b in financing green buildings in 2023

Absa Bank Kenya advanced close to Sh60 billion in sustainable financing in 2023, highlighting the bank’s ongoing commitment to driving sustainable development.

This figure, which is contained in the lender’s Sustainability Report for the financial year ended December 31, 2023, is made up of Sh22.3 billion advanced as climate and sustainability-linked finance and Sh36.9 billion in inclusive finance.

The report is themed ‘Banking on a Better, Sustainable Future’, shows that under climate finance, Sh14.1 billion was advanced towards renewable and clean energy, Sh2.9 billion to green building and Sh2.2 billion towards climate-smart agriculture financing and other sustainability-linked lending.

The above money spent under environmental stewardship saw 728,095 trees grown through partnerships with customers, communities, and partners.

It also led to reduced operational carbon emissions by eight per cent in line with our ambition to achieve Net Zero status by 2050, 85 sites retrofitted with energy-saving technology, with five certified as green buildings.  

The lender also partnered with SunKing to invest Sh2 billion in the development of solar-powered projects for off-grid communities and participated in financing Safaricom’s Sh20 billion sustainability-linked loan.

In October 2023, Absa announced plans to double its portfolio of credit under climate financing to Sh120 million by 2025 green financing to support the development of certified green buildings in the country.

It said it will collaborate with Acorn Holdings to support green buildings in Kenya through a Sh6.7 financing agreement to construct 10 purpose-built student accommodation developments in Nairobi.

The partnership with Absa Bank Limited to help the bank expand its residential and commercial loans and mortgage finance program for buildings that are environmentally responsible and resource efficient.

On the other hand, Sh21 billion was advanced to individuals and small businesses through Absa’s virtual banking platform Timiza, while Sh11 billion was loaned to Micro Small and Medium Enterprises, with an additional Sh4.9 billion to women entrepreneurs, all classified as inclusive finance.

Absa Bank Kenya chief executive Abdi Mohamed reaffirmed the lender’s commitment to operate in a manner that is not only profitable but also responsible, ethical, and aligned with the broader needs of society.

“In today’s world, our stakeholders – whether they are investors, regulators, or customers – expect more from us. They want to see the bigger picture, understanding not only how we create value for our shareholders but also the broader impact we have on society and the environment,” said Mohamed.

The report also highlights the notable strides that the lender has made in combating climate change. In the year under review, in partnership with various organisations, the bank planted 728,095 trees, accelerating its commitment to plant 10 million trees by 2032.

 “The financial sector plays a pivotal role in shaping the trajectory of our nation’s development. Banks are not merely financial intermediaries; they are the lifeblood of our economy,” said the Principal Secretary, State Department of Environment and Climate Change, Dr Festus Ng’eno, during the event.

“Absa’s dedication to integrating sustainability into its core operations sets a precedent for other financial institutions and indeed, for all sectors of the economy.”

Mohamed said at Absa Bank, their commitment to creating a sustainable future for all is pegged on their brand purpose of empowering Africa’s tomorrow, together one story at a time.

“We remain committed to providing sustainable financial solutions that support businesses, hence facilitating economic growth. Our sustainability journey is a testament to our commitment to making a positive impact on society and the environment.

“We are proud of what we have been able to accomplish, but we are cognizant that there is still much to be done,” he added.