Kenya Development Corporation (KDC) is positioning itself at the centre of the country’s transition towards a greener and more sustainable economy, unveiling new financing products and a sustainability strategy intended to unlock investment in environmentally friendly projects.
The corporation’s new direction places emphasis on green innovation, sustainable financing, a low-carbon economy and environmental protection.
The strategy comes at an important moment for Kenya, as the country seeks to mobilise capital for clean energy, sustainable manufacturing, climate-smart infrastructure and other investments capable of supporting economic growth while reducing environmental damage.
The Dark Twist
But as KDC prepares to commit more public resources to this emerging area, questions about how it has managed some of its existing investments cannot simply be pushed aside.
According to the Nyakundi Report, scrutiny of KDC’s past management of assets, investments and lending activities raises broader questions about accountability and the protection of public resources.
KSh490.5 Million Tied Up in Unsold Apartments
One of the clearest concerns relates to investment property owned by the corporation. The Auditor General’s report for the financial year ended June 30, 2023, raised concerns about apartments that remained unsold years after their completion.
The audit established that 11 of the 28 apartments at Zamia Heights and 24 of the 36 units at Oceania Apartments had not found buyers.
Together, the unsold units were valued at approximately KSh490.5 million. That represents a substantial amount of public capital tied up in property that was yet to deliver the expected returns. The corporation was also continuing to incur service charges on the unsold units, adding to the cost of holding the properties.
The Auditor General further cautioned that prolonged delays in selling the units could have implications for their value.
For a public development finance institution, this is more than a property sales problem. It raises questions about the original investment assumptions, market assessment, pricing, project management and the measures put in place when properties fail to perform according to expectations.
The Bigger Question: How Is Public Capital Being Managed?
KDC was established to play a strategic role in Kenya’s economic development. Its investments are therefore expected to generate economic value while supporting businesses and sectors considered important to national development.
When hundreds of millions of shillings remain locked in unsold assets, the concern is not simply whether the properties will eventually be sold.
The bigger issue is opportunity cost. Capital tied up in non-performing or slow-moving assets cannot easily be deployed elsewhere. It could otherwise support businesses, finance expansion, strengthen strategic industries or fund new investments.
This makes asset management and timely decision-making critical to the performance of a development finance institution.
Lending Activities Under Scrutiny
KDC’s investment responsibilities extend beyond property. The corporation also provides financing to businesses, with borrowers typically providing property or other assets as security for loans.
Where borrowers fail to meet their repayment obligations, KDC can pursue recovery measures, including the sale of secured assets.
Some of these disputes have reached the courts.
In February 2025, a food-processing company faced the prospect of losing a prime property in connection with a loan of approximately KSh276 million.
In another matter, the High Court granted a borrower additional time to clear arrears before KDC could proceed with the sale of a secured property.
The existence of such cases does not, on its own, establish wrongdoing by KDC. Loan recovery is a normal and necessary function of a lending institution, particularly one entrusted with public funds.
However, the disputes demonstrate the consequences that can arise when development financing does not produce the intended outcome.
For a business, the consequences of default can extend beyond the balance sheet. A company may lose critical assets, investment plans may stall, jobs can be placed at risk and entire supply chains can feel the effects.
Development Finance Is About More Than Lending Money
The effectiveness of a development finance institution should not be judged simply by how much money it disburses.
The more important question is what happens after the money leaves the institution.
Does the financing help businesses expand? Does it create sustainable employment? Does it strengthen local industries? Does it increase productivity and competitiveness? And ultimately, does it generate a return that justifies the use of public capital?
These questions become even more important when KDC moves into green financing, an area that is likely to attract substantial amounts of both public and private capital.
The corporation will need to demonstrate that its financing decisions are based on rigorous due diligence, credible commercial models and strong monitoring mechanisms.
Green Financing Brings New Opportunities and New Risks
KDC’s green financing strategy has received support from the National Treasury and the World Bank.
The strategy proposes governance structures for green finance, new financing instruments such as green bonds and systems for tracking climate-related performance.
If implemented effectively, these measures could help Kenya attract capital into clean energy, sustainable manufacturing, climate-smart businesses and other environmentally responsible investments.
The opportunity is significant.
But green financing also introduces a different layer of accountability. It is not enough for a project to be labelled “green”. There must be measurable evidence that the financing delivered the environmental and economic outcomes promised.
Who Gets the Money and What Happens After Disbursement?
The credibility of KDC’s new programme will ultimately depend on what happens after financing is approved.
If a company receives hundreds of millions of shillings through a green financing programme, there should be a transparent mechanism for determining whether the funds were used for the approved purpose.
There should also be measurable indicators showing whether the project delivered the promised environmental benefits.
Who approved the financing? Who conducted the due diligence? Who monitors the project? What happens when a beneficiary fails to meet the agreed conditions? And what mechanisms are available to recover public funds when a project fails?
These are not peripheral questions. They are central to ensuring that green financing does not become another avenue through which public resources become trapped in poorly performing investments.
Leadership Has an Opportunity to Set a Higher Standard
KDC’s leadership, under Director General Norah Buyaki Ratemo, has an opportunity to make accountability a defining feature of the corporation’s new direction.
The questions surrounding the corporation’s earlier investments should provide an impetus for stronger systems rather than being treated simply as historical issues.
Publishing clear information on beneficiaries, amounts approved and disbursed, repayment performance, project progress and environmental outcomes would go a long way towards strengthening public confidence.
Such transparency would also allow taxpayers and other stakeholders to distinguish between projects that genuinely deliver value and those that merely carry the language of sustainability.
Lessons From the Past Should Shape the Green Future
Kenya urgently needs investment in clean energy, sustainable industries and projects capable of creating jobs while addressing environmental challenges.
There is therefore a strong case for KDC to expand its role in green financing. But ambition must be accompanied by discipline.
The corporation’s previous experience with unsold properties and loan recovery offers an important reminder that even well-intentioned investments can fail to deliver expected results.
The answer is not to abandon new areas of financing. It is to strengthen the systems that determine how public money is allocated, monitored and recovered when things go wrong.
That means stronger due diligence, realistic investment assessments, continuous monitoring, transparent reporting and clearly defined consequences for underperformance.
The Real Test Will Come After the Launch
Green financing is an important part of Kenya’s economic future, but its success cannot be measured by the launch of new products, strategies or programmes.
The real test will come much later. Kenyans will want to know how much money was disbursed, who received it, which projects were financed, whether the projects delivered the promised economic and environmental benefits, how much was repaid and whether every shilling was properly accounted for.
That is where KDC’s credibility will ultimately be tested. The concerns surrounding the KSh490.5 million in unsold properties should therefore be viewed as part of a larger conversation about the management of public capital. They raise legitimate questions about how investments are selected, monitored and evaluated, and what institutions do when expected returns fail to materialise.
As KDC takes on a greater role in financing Kenya’s green transition, it has an opportunity to demonstrate that lessons from previous investments have been absorbed and translated into stronger safeguards.
Green money is still public money. Whether it finances an apartment project, a manufacturing business or a clean-energy venture, the standard should remain the same: sound investment decisions, measurable results and full accountability to the Kenyan public.
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