Absa, UN agencies launch financing plan to tackle Kenya’s $2.1bn cold storage gap

Absa Bank Kenya has partnered with two United Nations agencies to unlock financing for solar-powered cold storage facilities as Kenya seeks to curb post-harvest losses that cost farmers a significant share of their produce every year.

The bank, United Nations Capital Development Fund (UNCDF) and United Nations Development Programme (UNDP) announced a portfolio guarantee arrangement that will allow businesses in Kenya's agricultural value chains to access financing for cold-chain infrastructure.

The initiative targets an estimated $2.1 billion cold-storage investment gap in Kenya and is expected to support sectors including horticulture, dairy, fisheries and meat.

Under the arrangement, Absa will provide financing of between $500,000 and $2 million — approximately KSh64 million to KSh258 million — to agricultural aggregators, equipment suppliers, exporters and other large players in agricultural value chains.

The businesses will then invest in solar-powered cold-storage infrastructure that can be used by farmers and agribusinesses to preserve produce and improve access to markets.

A portfolio-sharing guarantee provided by UNCDF will absorb part of the lending risk, making it easier for Absa to finance investments that commercial lenders have traditionally considered risky because of their high upfront costs.

The cold-storage equipment will also serve as collateral under the asset-based lending model.

The initiative comes amid continued concern over the amount of food Kenya loses between farms and consumers.

Kenya loses more than 40 per cent of some agricultural production after harvest, according to estimates cited by international development agencies. Inadequate refrigeration, poor storage and weaknesses in transport and other cold-chain infrastructure are among the contributing factors.

The problem has consequences beyond food security. Farmers can be forced to sell highly perishable produce immediately after harvesting, when market supply may be high, while spoiled food represents lost income and contributes to greenhouse-gas emissions.

Solar power at centre of cold-chain expansion

The Absa financing arrangement forms part of a broader UNDP and UNCDF programme to expand solar-powered cold storage in Kenya.

The programme, backed by the Mitigation Action Facility, seeks to establish a commercial market for cold-chain services while reducing dependence on conventional energy sources.

The Mitigation Action Facility says the programme combines concessional loans, commercial loan guarantees and other risk-reduction mechanisms to encourage private investment. Its current implementation period runs to 2030.

In October 2025, UNDP and UNCDF announced plans with the Kenyan government to support the deployment of 1,000 solar-powered cold-storage units across the country.

The programme was projected to reach about 60,000 smallholder farmers while supporting the creation of roughly 1,200 jobs.

Absa Business Banking Director Renato D'Souza said the latest partnership was intended to make it easier for agribusinesses to invest in infrastructure that could simultaneously improve food security and farmer livelihoods.

“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,” D'Souza said.

He said combining renewable-energy technology with agricultural value-chain financing could reduce food losses, strengthen supply chains and improve farmers' incomes.

De-risking private investment

UNCDF Regional Investment Team Lead for East and Southern Africa and the Arab States, Omon Ukpoma-Olaiya, said guarantees could help draw commercial capital into a sector where financing has traditionally been difficult to obtain.

“Through this portfolio guarantee, UNCDF is helping to de-risk lending and unlock private sector financing for solar-powered cold storage solutions,” she said.

UNCDF will primarily provide the risk-sharing and blended-finance mechanisms, while UNDP will support technical assistance, policy engagement and coordination within the wider cold-chain ecosystem.

UNDP Kenya Resident Representative Dr Jean Luc Stalon said tackling post-harvest losses should be viewed as an economic and climate issue as well as a food-security challenge.

“Addressing post-harvest losses is not only a food security priority, but also a climate and economic opportunity,” Stalon said.

Agriculture remains central to Kenya's economy and rural livelihoods, making improvements in storage particularly important for smallholder farmers whose produce can deteriorate rapidly before reaching consumers.

Cold storage can extend the shelf life of products such as vegetables, fruit, milk, fish and meat, giving farmers and traders more time to transport produce and find markets.

Solar-powered facilities could also make refrigeration more viable in rural areas where grid electricity is unreliable or unavailable.

The wider programme is designed to use private capital alongside development financing rather than relying entirely on grants to build the country's cold-chain infrastructure.

If successfully scaled, the model could give farmers and agricultural businesses greater access to refrigeration while reducing food losses and supporting Kenya's transition towards lower-carbon agricultural infrastructure.