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Paper short abstract:

With a focus on Kenya, this paper will explore how developing economies are coping with the emerging landscape of development financing which is increasingly focused towards climate related action.

Paper long abstract:

This paper will explore how the evolving agenda of international development financiers towards climate and sustainability is affecting developing economies’ ability to address developmental challenges.

Lending agencies play a critical role in financing projects that support poverty alleviation, employment, education, rural development, agriculture, governance, and health in developing economies. However, the climate crisis is reshaping the way international aid, financing, and investments are structured. The changing landscape of development financing is drawing focus on climate and related activities.

There is growing emphasis on projects that address climate and sustainability issues. Several international lending agencies have announced plans to invest primarily in projects that have a climate component to them. For example, the Asian Development Bank has set a target for 2030 to ensure that 75 percent of its operations will support climate change mitigation or adaptation. The World Bank is also prioritizing climate action, with its new vision: "to create a world free of poverty on a livable planet.”

This raises questions around the changing structure of the development financing landscape. Drawing from examples from Kenya, this paper will evaluate how project proposals involving international development financing have evolved over time, how the emphasis on climate is translating onto development projects and how this change interacts with national development goals within Kenya.