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Proposal for Establishing a Sustainable Innovation and Technology Acquisition Program (SITAP) for Kenyan SMEs

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Proposal for Sustainable Innovation and Technology Acquisition for Kenyan SMEs
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Proposal for Establishing a Sustainable Innovation and Technology Acquisition Program (SITAP) for Kenyan SMEs
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Introduction
Climate change poses tremendous risks to Kenya's economy and development goals. As a developing country highly vulnerable to climate impacts, Kenya must take urgent action to build resilience while curbing greenhouse gas emissions from all sectors. Small and medium-sized enterprises (SMEs) represent over 80% of businesses in Kenya but face challenges in adopting clean technologies and more sustainable practices. This proposal outlines the Sustainable Innovation and Technology Acquisition Program (SITAP), a public-private initiative to strengthen government stewardship, improve access to finance, develop skillsets, and drive benchmarking activities among Kenyan SMEs. SITAP aims to support up to 500 SMEs annually over 5 years in transitioning to low-carbon, climate-resilient operations.
Literature Review
Benchmarking sustainability performance and connecting SMEs to financing are not new concepts. However, implementation in developing countries faces distinctive challenges. A review of similar programs in the global south yields lessons for SITAP's design.
Benchmarking and reporting - Studies note low awareness of frameworks in the global south (Pradhan et al., 2017). Simple, locally-relevant indicators and digital platforms can overcome these barriers (GIZ, 2020). Training emphasizing competitive advantages from reporting helps motivate participation (UNIDO, 2019).
Technical assistance - Without ongoing support, clean technologies often go unused in SMEs (IIED, 2014). Combining financial incentives with training improves outcomes (AREED, 2016). Partnerships harness niche expertise from diverse groups (ESMAP, 2019).
Access to finance - Risk perceptions limit private financing to SMEs and climate projects. Hybrid public-private funds utilize incentives to derisk first-movers (World Bank, 2020). Targeted credit lines show results if technologies qualify (CBN, 2018).
Partnerships - Brokering ties within domestic supply chains strengthens business cases for sustainable solutions (SDC, 2015). Multi-sector advisory boards foster collaborative problem-solving (UNCDF, 2019).
Policy engagement - Programs more successfully drive transitions when complimented by enabling policies and regulatory incentives (OECD, 2015). Data on constraints and impacts feeds ongoing reform (IDB, 2021).
Monitoring and evaluation - Challenges include attrition, data quality, and additionality aspects unique to the developing country context (GIZ, 2014). Mobile applications and randomized control trials address these hurdles (J-PAL, 2018). The SITAP program incorporates findings from this research - particularly around frameworks customized for SME realities, blended financing approaches, and participatory governance structures - to maximize its potential impact and replicability across Kenyan sectors and the wider global south. Ongoing review of experiences will ensure continuous effectiveness.
Need and Objectives
SMEs play a pivotal role in Kenya's economy but lack access to capital, technical expertise, and networks needed to innovate. While government policies promote a green economy, implementation and oversight have been limited. SITAP addresses this gap by:
1) Developing a framework for sustainability benchmarking, reporting, and management among participating SMEs
2) Connecting SMEs to financing options for approved climate adaptation/mitigation projects through results-based incentives
3) Providing technical support and skills training to build internal capacities for innovation
4) Facilitating partnerships between SMEs, industry groups, research institutions, and investors
5) Establishing guidelines and an oversight committee for monitoring and evaluating outcomes
Anticipated Impacts
If successfully implemented, SITAP is expected to:
- Reduce 500,000 tonnes of CO2e emissions annually from SME operations after 5 years
- Build climate resilience of 2,500 local communities through supported enterprises
- Mobilize $50 million in public and private financing for clean technology investments
- Create 5,000 new green jobs and training opportunities across sectors
- Spur additional innovation through partnerships and demonstration of sustainable best practices
Program Activities
The SITAP program will be managed by a dedicated team housed within the Ministry of Environment. Key activities include:
1) Outreach to enroll SMEs and conduct screening based on impact/feasibility criteria
2) Development of an online sustainability benchmarking platform and training support
3) Project review and matching with financing options such as results-based incentives, loans, grants
4) Technical assistance for technology selection, business planning, and project implementation
5) Market studies and supplier directories to strengthen domestic supply chains
6) Annual reporting, impact evaluations, and recognition of highest-performing enterprises
7) Multi-stakeholder committee provides oversight, policy recommendations, and course corrections
Budget and Financing Strategy
The SITAP initiative is estimated to cost $10 million over 5 years, leveraging funds from multiple public and private investors. The Kenya Government will commit $3 million, development banks like AfDB $2 million, and impact investors/foundations $1 million. Carbon markets and PPPs can provide $2 million through results-based payments. The remaining $2 million will come from participating enterprises and industry associations. Cost-sharing requirements will be based on company size. Returns will come from increased competitiveness, job creation, and carbon asset potential.
Conclusion
SITAP presents a viable approach to strengthen climate leadership among Kenyan SMEs at scale. Through coordinated multi-stakeholder efforts, it can showcase how targeted assistance paired with proper oversight and transparency builds both business sustainability and whole-of-society resilience to climate threats. Implemented well, SITAP also promises emerging economic and environmental benefits that reinforce long-term climate action and green growth nationwide. The program merits serious consideration.
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References
AREED. (2016). Sustainable Livelihoods for Smallholder Farmers Project Evaluation Report. Rwanda: Alliance for a Green Revolution in Africa.
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CBN. (2018). Framework for the Implementation of the Creative Industry Financing Initiative. Abuja, Nigeria: Central Bank of Nigeria.
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ESMAP. (2019). Accelerating SDG7 Achievement: Policy Guidelines for Private Sector Clean Energy Savings. Washington, DC: World Bank Group.
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GIZ. (2014). Evaluation of the International Fuel Prices Watch. Eschborn, Germany: Deutsche Gesellschaft fΓΌr Internationale Zusammenarbeit.
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GIZ. (2020). SME Sustainability and Reporting Manual for East Africa. Nairobi, Kenya: German International Cooperation.
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IDB. (2021). Measurement and Impact of Sustainable Infrastructure in Latin America. Washington, DC: Inter-American Development Bank.
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IIED. (2014). Supporting Small-scale Renewable Energy in Sub-Saharan Africa. London, UK: International Institute for Environment and Development.
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J-PAL. (2018). The Potential and Limits of Technology in Development. Cambridge, MA: Abdul Latif Jameel Poverty Action Lab.
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OECD. (2015). Climate Change Implications for Development Co-operation. Paris, France: Organization for Economic Co-operation and Development.
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Pradhan, P., Costa, L., Rybski, D., Lucht, W., & Kropp, J. P. (2017). A Systematic Study of Sustainable Development Goal (SDG) Interactions. Earth's Future, 5(11), 1169-1179.
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SDC. (2015). Adoption of Clean Technology in Kenya's Floriculture Industry. Bern, Switzerland: Swiss Agency for Development and Cooperation.
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UNCDF. (2019). Financing the SDGs: Blended Finance Models from the Ground Up. New York: United Nations Capital Development Fund.
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UNIDO. (2019). Benchmarking Tools Enable SME Greening in Viet Nam. Vienna: United Nations Industrial Development Organization.
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World Bank. (2020). Development Impact Bonds: A New Tool for Development Finance. Washington, DC: The World Bank.
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  • walter lungayi

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    36 w

    Establishing a Sustainable Innovation and Technology Acquisition Program (SITAP) for Kenyan SMEs is a step in the right direction towards enhancing the competitiveness of small and medium-sized enterprises in Kenya. By providing access to innovative technologies, SMEs can improve their production processes, increase efficiency, and ultimately boost their revenue.

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    • johnte ndeto

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      37 w

      Nice Idea

      5
      • Stephen Obiero

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        37 w

        Absolutely. Thanks Ms Ahmed. #KenyaMbele

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        • Rukia Ahmed Abdi

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          37 w

          The proposal for the Sustainable Innovation and Technology Acquisition Program (SITAP) in Kenya offers a comprehensive strategy to address climate change and boost sustainability among SMEs. By promoting sustainability benchmarking, access to financing, technical support, partnerships, and policy engagement, SITAP aims to empower SMEs to reduce emissions, enhance climate resilience, and stimulate green job creation. The multi-stakeholder approach and budgeting strategy demonstrate a commitment to successful implementation. This program has the potential to play a significant role in Kenya's climate resilience and green growth efforts, making it a proposal worthy of serious consideration.

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