Prime
Banks pledge to fund green energy projects
Staff from financial institutions undergo training on green finance lending in Kampala last week. PHOTO/COURTESY
What you need to know:
According to the banks, they have already trained their staff on assessing such projects.
Commercial banks and other financial institutions in Uganda have pledged to finance businesses and projects that promote environmental conservation and renewable energy.
According to the banks, they have already trained their staff on assessing such projects that advance sustainable agriculture, energy efficiency, renewable energy, drip irrigation, and clean transportation, among others.
“The bank’s main business is to give financial assistance and with these kind of capacity building trainings, we shall be able to identify the investments that are not harming the environment and in the process we are able to categorise them as such,” Ms Virginia Semakula, the manager for energy, environment and climate change at Equity Bank Uganda, said.
She was speaking during a training workshop on green financing organised by aBi Finance Ltd for financial institutions in Kampala, Wakiso and Mukono districts last week.
Ms Semakula believes that the green finance initiative is scalable once all actors in the value chain understand the dynamics around it.
Mr Pastori Kamoga, an internal auditor from Development Microfinance based in Ssonde, Mukono, said while Environment and Social Governance (ESG) is still optional in Uganda, there is a need for all lenders to have policies at all levels of investment decisions.
“We have been doing green financing but on a small scale however, with aBi Finance coming on board, with a very big boost to see that we can fully diversify into green financing by helping us overcome the risks associated with the initiative like taking up 70 percent of a loss and leaving 30 percent of the loss the institution which is fair compared to leaving it entirely to the Institution as it has always been,” he said.
With the trainings, Kamoga said investors will also be able to make informed decisions that align with their values and contribute to sustainable development.
Mr Barnabas Nitusiima, the credit supervisor in Pride Microfinance, Kisoro Branch, said green finance funding is very timely since it emphasises sustainability.
“We shall be able to advise our clients on how to use the environment sustainably. We will now be able to ensure that whatever our client clients are doing should be able to help them today, tomorrow and so many years to come,” Mr Nitusiima said.
aBi Finance Ltd last week launched up to 20 green finance capacity-building sessions for staff of partner financial institutions.
Mr Noah Owomugisha, the head of investments at aBi Finance, emphasised the importance of green finance in driving positive outcomes.
“When financial institutions put in place green policies, green loan products, and up-to-date banking systems they position themselves to offer loans to smallholder farmers and other value chain actors for green agribusiness investments,” he stated.
Background
Recently, aBi Finance unveiled the Green Finance Fund and Green Taxonomy, valued at Shs120 billion, to further promote sustainable investment in the sector.
In addition to training staff, aBi Finance will work closely with partner financial institutions to develop green finance education materials.
