Rethinking climate action as an investment

It’s time to flip the coin and see climate change as a challenge that also presents investment and business opportunities. Peter Odhengo, programme coordinator of Kenya’s Financing Locally-Led Climate Action (FLLoCA), explains why it is worthwhile investing in local capacity to deliver climate solutions.

By Vibeke Quaade

It is the last day of training for the last group of climate officers and the final day of the five training programmes. The low murmur of voices drifts out from inside one of the Kenya School of Government’s white-walled buildings in Mombasa, where groups of participants are discussing nature-based solutions to the challenges posed by climate change. Outside, the sun beats down on the courtyard, but Peter Odhengo is standing in the shade, as energetic and enthusiastic as ever, explaining FLLoCA’s vision.

From challenge to business
For him, climate change has too often been framed exclusively as a problem. “It has traditionally been viewed as a barrier to development and economic growth,” he says. “But now is the time to flip the coin and see it as a challenge that also presents business opportunities. We built FLLoCa around that idea.”

FLLoCA is a large-scale programme that invests in local responses to challenges brought about by the climate change. The programme is anchored in Kenya’s National Treasury, the body responsible for public finance and resource mobilisation. Its goal is to empower local communities and government institutions at county level to respond to the impacts of the climate change by exploring various opportunities for mitigation. Unlike short-term climate projects, FLLoCA treats climate action as a sustained, long-term investment in resilience, ecosystems and local economies.

“Climate impact is mostly felt at the local level,” Odhengo says, his voice carrying over the courtyard, “but the money has struggled to get to where it is truly needed. In Kenya, where nearly 80% of the land is arid or semi-arid and climate change already costs up to 3% of GDP each year, this financial gap has been especially damaging.”

Directing climate finance straight to county level
FLLoCa tackles this by channelling climate finance directly into county and ward-level climate funds. Communities then decide what to prioritise—water, climate-smart agriculture, ecosystem restoration, risk management, or clean energy—and they co-finance the solutions. “The money does not belong to the government,” Odhengo emphasises,“it belongs to the people.” He goes on to list exactly what this means: indigenous communities, women, youth and people with disabilities each have dedicated allocations, ensuring inclusive, locally led decision-making.

Nature-based solutions are central to FLLoCA’s approach. Restoring land, protecting water systems, and strengthening climate-resilient agriculture reduce risk while creating productive assets. These investments support livelihoods, improve water access, and enable new green businesses over time. “Building the capacity of ecosystems and people to adapt takes time,” Odhengo notes, glancing briefly at the participants immersed in their session, “But that is exactly why it is an investment.”

Adaptation projects as business cases
Crucially, FLLoCA has shown that adaptation can be bankable. More than 50 locally prioritised initiatives in water, agriculture and clean energy have been developed into investment-ready opportunities since FLLoCa began operating in 2021. “Adaptation projects have a business case,” he says. This has attracted private sector interest, not to replace communities, but to scale what they have already built. “We are creating small and medium green enterprises and green jobs at the local level,” he adds, his characteristic energy cutting through the hum from inside.

The training provided by Danida Fellowship Centre and its partners has contributed to FLLoCA’s progress, helping county climate units turn community priorities into solutions that address climate impacts while also evolving into investment and revenue-generating plans.

Watch the videos and read the article about the training  Investing in the future: Kenya’s locally-led climate action.

For Odhengo, the lesson is clear. Climate change is reshaping global markets in renewable energy, electric mobility from motorbikes to cars and ferries, climate-smart agriculture and green infrastructure. “Climate change is no longer just a crisis,” he says, “It is a business opportunity.” By grounding that opportunity in community-led and nature-based solutions, Kenya demonstrates that climate action can deliver resilience, inclusion and long-term economic value—while empowering local communities to shape their own future.

The Kenyan Government, with support from the World Bank, Denmark, Sweden, the Netherlands and other partners, set up FLLoCA in 2021 to channel funds directly to counties, empowering local governments and communities to design projects tailored to their specific climate challenges.

In partnership with the Danish Embassy in Kenya, the Kenya School of Government and the Wangari Maathai Institute for Environment and Peace, Danida Fellowship Centre conducted a specialised training programme for about 300 Kenyan county-level climate officers in support of Financing Locally-Led Climate Action (FLLoCA) in 2025.

 

 

 

 

 

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