Green finance is structured financial product created to ensure a better environmental outcome and a more resilient future. The product provides credit for agribusiness ventures, offers guarantee to the agribusiness loans and promotes Environmental, Social and good Governance (ESG) practices in the financial services sector.
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.
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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.
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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.
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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.
