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Strengthening green enterprises in Kenya

  • By Zachary Mikwa
  • January 18, 2019
  • 0 Comment

Kenya’s potential for climate entrepreneurship is high, and the country’s dynamic high-growth entrepreneurs are helping lead the country toward its green growth goals. By scaling innovative business solutions to local climate challenges, their contribution is not only limited to Kenya but spans beyond the national boundaries to other areas in the region.

Kenya boasts of a highly skilled and tech-savvy entrepreneurial force, and plenty of natural assets including solar and expansive cultivatable land. In East Africa, Kenya has a potentially big economic opportunity to play a leading role in climate change adaptation and mitigation both within the country and beyond. Moreover, many Kenyan entrepreneurs (including the youth and women) have already started their businesses with an international mindset.

Despite the high potential for climate entrepreneurship in Kenya, several constraints that thwart the progress towards achieving a green economy still exist. In a previous article, I shared with you some of these challenges that hamper Kenya’s potential to create green jobs and increase overall economic growth. However, these are not insurmountable challenges. The section that follows includes some recommendations for strengthening the capabilities of the green-growth sector in Kenya.

Creating an enabling environment for green enterprises

First, Kenya can enhance climate and green entrepreneurship by developing optimal and stable policy support to facilitate new firm creation, innovation, job creation, and growth. The key stakeholders such as the relevant government agencies, institutions and academia can begin by systematically reviewing existing policies in the areas of innovation and entrepreneurship as well as regulations in the clean-tech space. Concerted effort should also be put in clarifying the role of different government organizations in innovation and entrepreneurship. The policymakers should also make an effort to clarify government funding in this space, particularly at the early stage. In the long-term, a clear overarching policy that supports innovation and entrepreneurship should be established.

Second, deliberate and focused support for strengthening the green-growth ecosystem in Kenya should be of utmost priority. This will be vital in achieving strongly networked ecosystems that provide cohesive support from ideation through growth stages. This can be achieved by increasing stakeholder networking and ecosystem linkages through a focused program to incentivize these linkages.  Over time, robust linkages between different ecosystem players in the forms of collaborations, joint programs, and networking events should be encouraged.  

Third, entities such as the youth enterprise fund and women enterprise fund should increase access to working capital for green small and growing businesses in Kenya. They can begin by piloting innovative funding mechanisms to test the appetite for alternative funding sources to working capital for green-growth enterprises in Kenya. The green and climate enterprise incubation centers, like Kenya Climate Innovation Center, should also ensure that entrepreneurship programs are focused on product markets that are of interest to investors. Efforts should be made to increase linkages with early stage and angel investors in this space (national and international). To achieve a greater impact in this space, joint effort to raise awareness about different mechanisms to increase access or de-risk finance for green, small and growing businesses is a necessity. To augment this, enterprises should also crowd in international sources of green investments such as social impact investors.

Support centers for Kenyan entrepreneurs 

Only strong and stable green enterprises can achieve the desired double impact of climate change adaptation and economic growth. We must, therefore, help build stronger climate enterprises. This can be achieved by increasing the deal flow of inevitable high-growth potential green ventures in Kenya. We should make use of programs such as those with co-founder matchmaking component to entrepreneurship programs. This can be achieved by partnering with existing business schools in Kenya to match technical talent (in the cleantech space) with business skills. In this endeavor, we should not forget to increase opportunities for existing green women entrepreneurs through existing programs, raising awareness, as well as specialized training and mentoring. We should also mainstream female entrepreneurship-focused programs through the educational system.

The number of green growth enterprises in Kenya is still low. To achieve greater impact across various sectors affected by climate change, deliberate decision should be made to increase the number of green-growth oriented firms. This can be achieved by scaling up to a broader level those initiatives that have proven successful in supporting green high-growth ventures in Kenya- for example, support centers, policies, and funding streams. Initiating an international matchmaking program that would aim to bring in existing businesses models and proven technologies to Kenya is also worth consideration. We should also aim to increase support to more mature firms scaling new green solutions.

Establishing green markets in Kenya 

To increase growth opportunities for Kenyan green entrepreneurs, we must consider expanding market information for them. This can commence through focused market awareness and information campaigns for green entrepreneurs in Kenya. We should also encourage broad market information on green sectors and intelligence to be mainstreamed into Kenyan organization’s mandate and disseminated online.

Increasing the number of green enterprises cannot yield much without increasing the potential market size/market pull for Green Kenyan enterprises. This can be achieved by facilitating knowledge and opportunities for Kenyan green entrepreneurs to increase their presence abroad through matchmaking partnerships. We should also stimulate the demand-side in Kenya through increasing the number of demonstration projects for green technologies as well as working with corporates. In the long-term, we should increase information regarding the importance of green SMEs being included in large corporate and government contracts.

I believe that improving the overall green-growth ecosystem in Kenya will require considerable investment in several key areas such as policy, financing, and markets. In particular, a coherent and proactive national sustainable entrepreneurship policy would set the tone for dynamism throughout the sector. Furthermore, this would help lay the official foundation for entrepreneurship, while ideally easing the culture of risk around securing funding for the earliest stages of activity. Executing a well-crafted policy is often a lengthy and difficult cross-governmental process. However, the benefits of achieving this would have a lasting effect across all entrepreneurial sectors, especially with regard to green entrepreneurship.

By Zachary Mikwa