Uganda secures $100m IFAD financing to expand oil palm project

KAMPALA — Uganda has secured $100 million (about Shs380 billion) from the International Fund for Agricultural Development (IFAD) to finance the expansion of the National Oil Palm Project to new districts in Busoga sub-region, strengthening government efforts to boost rural incomes and agro-industrial growth.

The financing was approved by the IFAD Executive Board in December 2025.

Finance Minister Matia Kasaija, who met IFAD President Alvaro Lario in Rome, Italy, on Friday, February 13, 2026, expressed gratitude to IFAD for what he described as sustained development support through loans and grants, noting that the latest facility will accelerate commercial agriculture and job creation in eastern Uganda.

The oil palm expansion is expected to deepen value addition in edible oils, reduce Uganda’s import bill, and increase household incomes in participating districts. The project targets smallholder farmers, linking them to structured markets and agro-processing chains.

Uganda and IFAD have partnered since 1981, implementing 19 projects with cumulative IFAD financing of $659.3 million. The Rome-based fund focuses on increasing incomes for rural households living in poverty, improving food security, and strengthening resilience to climate and economic shocks.

The latest financing falls under the 2021–2027 Country Strategic Opportunities Programme (COSOP), jointly developed by Uganda and IFAD. The framework aligns with Uganda’s National Development Plans, IFAD’s corporate priorities, and the United Nations Sustainable Development Cooperation Framework.

The oil palm expansion builds on gains registered under the ongoing National Oil Palm Project (2018–2029), which has received $77 million in IFAD support. The project has played a key role in promoting domestic production of crude palm oil, particularly in Kalangala District, and is now being extended to Busoga to widen farmer participation.

Beyond oil palm, Uganda is implementing two other major IFAD-supported agricultural value chain projects.

The National Oilseeds Project (2019–2028), financed with $99.56 million from IFAD, aims to increase the production and productivity of oilseed crops such as sunflower, sesame, and soybean. The project supports farmer aggregation, access to quality inputs, and market linkages.

Meanwhile, the Resilient Livestock Value Chain Project (2024–2033), backed by $99.57 million from IFAD, is designed to enhance livestock productivity, strengthen veterinary services, and build resilience among pastoral and agro-pastoral communities.

Collectively, the three projects represent more than $276 million in active IFAD financing targeting Uganda’s agriculture sector, which employs more than 70 percent of the population and remains central to poverty reduction and export growth.

IFAD President Álvaro Lario reaffirmed the institution’s commitment to supporting Uganda’s rural transformation agenda and urged faster implementation of ongoing projects to maximise impact.

He called on the Ministry of Agriculture, Animal Industry and Fisheries (MAAIF), the lead implementing agency, to expedite project execution to ensure timely delivery of benefits to rural communities.

Analysts say the additional financing comes at a critical time as Uganda pushes to commercialise agriculture under its Parish Development Model and Agro-Industrialisation Programme. Expanding oil palm and oilseed production is expected to reduce dependence on imported edible oils, improve the trade balance, and stimulate agro-processing investments.

With fresh capital injection and renewed implementation focus, the oil palm expansion in Busoga could mark a significant step in Uganda’s strategy to turn subsistence farmers into market-oriented producers while strengthening rural value chains.