UDB launches shs50bn climate finance facility to promote green economy

Uganda Development Bank(UDB) has launched a shs50 billion climate finance facility, a fund that will make available finance to promote  a green economy.

The shs50 billion committed by UDB towards capitalization of the facility will go towards financing of investments in the sectors of climate smart agriculture, renewable energy, sustainable waste management, climate resilient infrastructure, low carbon industry and eco-tourism.

Speaking during the launch in Kampala, the Ministry of Finance Permanent Secretary, Ramathan Ggoobi said without appropriate funding, the country cannot build the capacity to adapt to the impacts caused by climate change that are disastrous.

“Providing targeted financing for climate adaptation and mitigation is very critical to significantly reduce the impact of climate change in our country.  This could include development of climate resilient practices especially in agriculture, mining and many other extractives which are the bedrock of our economy but also promoting renewable energy development,” Ggoobi said.

The Secretary to the Treasury said climate change impact has been seen through the severe drought that hit the country last year and created a food crisis.

“We have tested the wrath of climate change through one of the longest dry spells ever seen in this country last year. As a result of that, we haven’t had enough food and inflation increased in the country. We have had several impacts as a result of climate change in terms of drought, land slides and mudslides, flooding and epidemics affecting crops and livestock. All these are caused by human practices on environment. We need to reverse this.”

Ggoobi said there is need for a collective effort globally to address the impact of climate change.

“As a country, we must continue to work with private sector players, financial institutions and international partners to mobilize the necessary resources and expertise needed to build a more sustainable future

The UDB Managing Director, Patricia Ojangole said the initiative will help foster climate conscious change in investments with a clear objective of building climate resilience among the businesses supported.

“The vulnerability of Uganda’s population requires the urgent need to adapt and maintain future economic growth opportunities by transitioning to a low carbon economy. This will require massive investment in green technologies,”Ojangole said.

She noted that green financing will be central to providing the flows of capital required to invest in green technologies.

“This is primarily driven by the fact that most green technologies are characterized by high capital intensity and consequently high upfront financing requirements. This initiative is therefore meant to build climate proof businesses as this is a better strategy for building long term viable enterprises that are adaptive to climate impacts and seek a low carbon development pathway,” Ojangole said.

The UDB Managing Director however urged that financial institutions and the private sector get involved in promoting a green economy and to this she said the sh50 billion injected in the facility will support this.