Bank of Uganda, European bank partner to mobilise climate finance

KAMPALA. The Bank of Uganda (BoU) has partnered with the European Investment Bank (EIB) to strengthen climate-risk management in the financial sector and help mobilise investment needed to finance the country’s green transition.

Under the cooperation agreement signed at Kampala Serena Hotel on Wednesday, EIB Global, the bank’s international development arm, will provide technical assistance to the central bank to develop a roadmap for greening the financial sector, improve climate-risk disclosure and strengthen reporting by supervised financial institutions.

The partnership comes as Uganda seeks about $28.1 billion (Shs118.22 trillion) in climate-action financing by 2030, requiring stronger financial institutions to manage climate-related risks and attract private and international capital.

Bank of Uganda Deputy Governor Augustus Nuwagaba said the country must build resilience against climate risks without unnecessarily restricting access to finance.

“We must strengthen resilience without unnecessarily constraining access to finance,” Prof Nuwagaba said.

“Our objective is a financial system that understands emerging risks, allocates capital effectively and continues to finance productive activity. Achieving this will require collaboration across sectors, technical expertise, reliable information and sustained implementation.”

The technical assistance will support the central bank in translating Uganda’s climate-finance ambitions into practical measures for banks and other financial institutions, including better assessment and disclosure of risks associated with climate change.

The programme will also support the implementation of Uganda’s National Green Taxonomy, launched in September 2025, which provides a common definition of environmentally sustainable economic activities across sectors such as agriculture, energy, transport, construction, forestry, water and sanitation, and waste management.

Uganda has already issued Guidelines for the Management of Climate-related Financial Risks, which took effect at the end of 2025. The new partnership is expected to strengthen the central bank’s supervisory capacity to assess how climate-related risks could affect financial institutions and the wider economy.

EIB Vice-President Marko Primorac said financial institutions that understand climate risks were better positioned to protect economic stability and direct investment towards resilient, low-carbon growth.

“A financial system that understands climate risk is better equipped to protect economic stability and direct investment towards resilient, low-carbon growth,” Mr Primorac said.

He said the partnership would help turn climate ambitions into practical tools, strengthen market confidence and support Uganda in mobilising private capital for its climate-action priorities.

The support will extend beyond the central bank to selected commercial lenders, with assistance aimed at improving climate-risk management, disclosure practices and green-lending policies.

Housing Finance Bank has been identified as the first Ugandan commercial bank to benefit from the programme.

Pablo Vieira, the global director of the NDC Partnership, said mobilising climate finance at the required scale depended on institutions and financial systems capable of understanding and managing climate-related risks.

“Strengthening how financial institutions understand and manage climate risks is essential to building a financial system that can mobilise investment at the scale Uganda’s climate and development priorities demand,” Mr Vieira said.

The programme is being implemented through EIB Global’s Greening Financial Systems Technical Assistance programme, managed by EIB Advisory and financed by Germany and Luxembourg through the Greening Financial Systems Fund.

It is delivered in coordination with the NDC Partnership, a global coalition of more than 270 countries and institutions working to advance the Paris Agreement.

Uganda is among the programme’s beneficiaries, alongside countries including Kenya, Rwanda, Ethiopia, Nigeria, Albania, Armenia, Bosnia and Herzegovina, Georgia, Jordan, North Macedonia and Vietnam.

The initiative also aligns with Uganda’s National Climate Finance Strategy 2025–2030, which seeks to strengthen the financial system’s resilience and transparency while improving its attractiveness to foreign direct investment.

It further supports Uganda’s updated Nationally Determined Contribution under the Paris Agreement, which outlines the country’s climate commitments.

European Union Ambassador to Uganda Jan Sadek said strengthening the financial sector’s capacity to channel resources towards sustainable investments was necessary to translate climate commitments into tangible benefits for communities.

“Ensuring that the financial sector can channel resources towards sustainable, climate-friendly solutions is essential to turning this ambition into real change in people’s lives,” Mr Sadek said.

He described the agreement as an important step towards that goal.

The cooperation forms part of the European Union’s support for Uganda’s green transition under the Global Gateway strategy, which combines technical assistance, grants, loans and guarantees to improve investment conditions and mobilise public and private capital for sustainable infrastructure and climate action.