Kenya’s commitment to climate action continues to be put to doubt, with the recent move by parliament to slash climate change funding by 50 percent to counties risking to erode gains made in combating the adverse effects of climate change in the country.
In the current financial year, Parliament has reduced funding for climate-led actions from Sh9 billion to Sh4.9 billion, a move that exposes the countries to vagaries of nature.
According to Finance Locally–Led Climate Actions (FLLoCA) coordinator Peter Odhengo, the move to slash the budget for climate actions will be detrimental to the country’s mitigation responses. The fund supports counties’ climate-led action plans at the ward level to cushion the most vulnerable groups through local solutions.
Currently, Odhengo said the program has funded 2,145 projects across 1,350 wards in the country within four key sectors of water, smart agriculture, disaster risk management and clean cooking.
Odhengo said that for counties to benefit from the fund, they must allocate 1.5 percent of their development budgets to climate change action programs, adding that this year, 42 counties have contributed Sh8.2 billion to the kitty.
“The plan by Parliament to slash funding for Climate-led Actions, coupled with reduced funding from global players, will adversely impact programs to combat nature vagaries”, said Odhengo.
This comes hot on the heels of the proposals in the 2025 Finance Bill to slap a 16% VAT on solar, wind, and geothermal inputs. Currently, these inputs are VAT exempt, but if this proposal goes through, they will become expensive, putting a damper on investments in green energy. These green energy sources play a crucial role in reducing greenhouse gas emissions, combating global warming, and safeguarding the environment.
The 2025 Finance Bill is further shaking things up by suggesting a reclassification of VAT for electric bicycles, electric buses just when Kenya Power was announcing an ambitious plan to install 45 electric vehicle (EV) charging stations across six counties within the next 12 months to support the country’s shift toward clean and sustainable mobility.
With the Finance Bill 2025 tax proposals, the currently zero-rated electric buses and bicycles are now on the fast track to becoming exempt, with standard VAT looming on the horizon. The move is a step backward in Kenya’s dream of transitioning to electric mobility to catalyze the reduction of carbon emissions, majorly driven by the use of fossil fuels – diesel and petrol, as it will negatively impact investment in the manufacturing of electric buses and bicycles, and also reduce their affordability.
The Bill further puts to question the Government’s commitment to tackle climate change by proposing to move solar and lithium-ion batteries, and bioethanol vapor (BEV) stoves from the zero-rated category to the exempt category. This unexpected twist seems to contradict Kenya’s commitment to reducing greenhouse gas emissions.
