Sweden backs Sh349 million programme to green Kenya’s trade

SWEDEN has signed a $2.7 million (Sh349.5 million) agreement with TradeMark Africa for sustainable and inclusive trade in Kenya, a boost to SMEs ahead of the EU Deforestation Regulation set for 2026.

The two-year Kenya Enhanced Trade Environment and Inclusion (KETEI) programme will support the country meet its national ambition within the various signed trade agreement frameworks, such as the African Continental Free Trade Area (AfCFTA).

The programme is designed to promote port efficiency, improve green trade infrastructure and policy landscape in Kenya and enhance the resilience of women- and youth-owned SMEs participating in trade.

The KETEI programme aligns with TradeMark Africa’s broader strategy of supporting sustainable and resilient trade.

Through the programme, it is anticipated that supported MSMEs (60% women-led, 40% youth-led) will realise a $3 million (Sh388.3 million) increase in export value, alongside tailored support on climate-linked export regulations and standards.

Further, at least $5 million (Sh647.2 million) in private investment is expected to be leveraged towards green logistics infrastructure.

Speaking at the signing ceremony on Thursday, Sweden’s Head of Kenya Development Cooperation Section, Marie Ottosson, said: “Globally, we are seeing growing demand from consumers for goods that are produced sustainably. With the EU Deforestation Regulation (EUDR) set to take effect in 2026, we are pleased to support Kenya’s smallholder producers in meeting these requirements and securing continued access to global markets and particularly in the European Union.”

Ottosson affirmed Sweden’s commitment to also support AfCFTA, which it views as a strategic step towards deepening cross-border trade across the continent.

Last year, Kenya’s horticultural exports were valued at Sh203.6 billion with the EU market being a key destination.

Tea exports were valued at Sh189.1 billion while the value of coffee exports was Sh38.4 billion, with the European Union accounting for 55 per cent of this value.

In 2023, the EU Parliament passed the EU Deforestation Regulation, aimed at reducing deforestation and forest degradation.

The regulation mandates that certain commodities, including coffee, linked to deforestation must not be placed on or exported to the EU market after December 30, this year for medium and large companies, and June 30, 2026 for small and micro businesses.

This makes compliance with these regulations essential to the success of Kenya’s coffee subsector, which relies heavily on the EU market.

 “Sweden’s support enables us to address structural inefficiencies in how goods move and how SMEs are supported, both regionally and globally. In addition to expanding and diversifying our markets, we must ensure that growth is inclusive, climate-resilient and future-proof,” TradeMark Africa’s Kenya Country Director, Lillian Mwai–Ndegwa, said.

She said strengthening trade systems and placing women and young people at the centre of the process does not only fulfill the promise of the AfCFTA, but also safeguards Kenya’s competitiveness in an increasingly dynamic global economy.

In 2022, Kenya launched its AfCFTA strategy, which sought to facilitate an expansion of the country’s trade and investment within Africa, support structural transformation and foster economic growth and sustainable development.