In a bid to tackle the pressing challenges posed by climate change, Uganda’s Climate Finance Unit (CFU) has embarked on a comprehensive strategy aimed at mobilizing resources to bridge the significant climate finance gap. Through a series of stakeholder engagements and strategic planning, Uganda is positioning itself to become a regional leader in climate finance within East Africa.
The CFU, in collaboration with key stakeholders such as the Private Sector, Civil Society, Academia, and Development Partners, has initiated the development of the National Climate Finance Strategy (2023/24-2029/30). This strategy, envisioned as a blueprint, aims to guide Uganda’s efforts in mobilizing resources to address climate-related issues effectively.
One significant step in this endeavor was the recent breakfast roundtable stakeholder meeting held at the Four Points by Sheraton in Kololo, Kampala, where the CFU engaged with Development Partners. This meeting provided a platform for fruitful discussions and collaboration on strategies to mobilize climate finance resources.
Uganda’s climate vulnerabilities, including droughts, floods, landslides, and storms, underscore the urgency of bolstering financial and technological adaptive capacities, particularly for least developed countries like Uganda. With a current climate finance gap estimated at USD 28.1 billion, concerted efforts are essential to bridge this divide and mitigate the adverse impacts of climate change.
A core component of Uganda’s strategy involves specific interventions over a seven-year period to attract private finance. These interventions include:
- Legislation for green bonds: Introducing legislation to facilitate the issuance of green bonds and other climate finance instruments, thereby creating an enabling environment for Uganda to emerge as a regional leader in East Africa.
- Alignment with international standards: Aligning with international climate finance disclosure agreements (TCFD, TNFD) to ensure compliance among all private financial institutions in Uganda, fostering transparency and accountability in climate finance activities.
- Collaboration with development financial institutions (DFIs): Working closely with DFIs to access long-term concessionary finance, which can be on-lent to private financial institutions, thereby making climate-smart investments more financially viable.
These initiatives aim to stimulate increased flows of funds, both directly to financial institutions and indirectly through intermediaries, facilitating direct investment into climate finance projects.
The anticipated outcomes include a surge in green bond transactions listed on the Uganda Stock Exchange, driving local investment opportunities, as well as enhanced compliance among private financial institutions with climate finance disclosure standards.
Development partners have signaled their readiness to support Uganda’s efforts by providing concessionary finance for climate-smart projects. Such collaboration is pivotal in accelerating progress towards achieving Uganda’s climate finance objectives.