Financial institutions in the Teso sub-region have been equipped with skills to tap into green financing to save and restore the environment.
Green financing is a structured financial product created to ensure a better environmental outcome and a more resilient future. The product provides credit for agribusiness ventures, offers guarantees to agribusiness loans, and promotes Environmental, Social, and good Governance (ESG) practices in the financial services sector.
It was launched in December 2022 with a capital investment of 124 billion Shillings to promote ESG practices in the financial services sector through Agricultural Business Initiative (aBi) Finance in association with the Bank of Uganda, Uganda Bankers’ Association, and Association of Microfinance Institutions of Uganda.
Moses Bwire, the Investments Manager in charge of Green Growth and Business Development Services at aBi Finance Limited says that the money is channeled through financial institutions to the beneficiaries. Bwire explains that each financial institution applies for the money which is given at 12 percent interest.
“We believe that by training staff of financial institutions on green finance for investing in climate change adaptation, mitigation, and biodiversity conservation to attain sustainable development, we are equipping them to disseminate the same green financing information to fellow staff as well as their agribusiness loan clients across various branches country-wide,” said Mr. Bwire.
Victoria Adong, the trainer from Uganda Institute of Banking and Financial Services says that Uganda ranks the 12th most vulnerable and 49th least prepared country out of 195 countries globally on climate change adaptation and its effects.
She adds that the effects of climate change due to environmental degradation are very high in Teso and Bugisu sub-region, which requires urgent attention.
Badru Waiswa, one of the Savings and Credit Society managers in Eastern Uganda says that green financing has the potential in boosting the businesses of financial institutions if clients are sensitized about climate change mitigation measures.
The ongoing training targets loan officers and their clients to enable the development and adoption of ESG policies, green loan products, green finance information, education, and communication materials.
aBi Finance is also supporting the updating of Management Information Systems and banking systems to capture and report on environmental management and inclusion parameters.
Uganda is facing challenges of high population growth, deforestation, lack of alternative fuel sources, wildlife trafficking, and expanded oil exploration in the unique Albertine Rift Valley, among others, now a big threat to the environment and conservation.
Climate change and variability are also impacting the livelihoods of many Ugandans.
