Co-designing blended finance mechanisms for farmer-led irrigation in Kenya

Agyekumhene, Christopher; Mbai, J.; Ires, Idil; Jacobs-Mata, Inga; Tilahun, Seifu A.

Co-designing blended finance mechanisms for farmer-led irrigation in Kenya

Autores

Agyekumhene, Christopher

Editor

International Water Management Institute
CGIAR Scaling for Impact Program

Descripción

This report presents the outcomes of a multi-stakeholder workshop held on November 4, 2025, in Nairobi, convened by the International Water Management Institute (IWMI), the State Department for Irrigation (SDI), and the World Bank to co-design blended finance mechanisms for farmer-led irrigation in Kenya. Convened by the Ministry of Water, Sanitation, and Irrigation (MoWSI), the workshop brought together 60 participants from government agencies, development partners, commercial banks, research institutions, and private irrigation service providers. Kenya faces a significant irrigation gap, with smallholder farmers highly exposed to climate shocks and rainfall variability. Despite policy momentum through the National Irrigation Sector Investment Plan (NISIP), Farmer-Led Irrigation Development (FLID) initiatives, and climate-smart agriculture strategies, irrigation finance remains fragmented. Key constraints include limited farmer affordability, high perceived lending risk, short-term bank funding structures, weak value-chain coordination, and persistent policy and data gaps. During the workshop, the World Bank presented two proposed financing structures to operationalize NISIP: a results-based financing facility to reward verified installation and performance of irrigation systems, and a risk-sharing and credit/investment facility to de-risk lending through guarantees, concessional capital, and technical assistance. Participants broadly endorsed these mechanisms and emphasized the importance of affordability, risk mitigation, operational quality, climate resilience, and aggregator capacity. The workshop concluded with a consensus on establishing a coordinated blended finance platform involving SDI, international financial institutions, and local commercial banks.