GGGI to support the Ministry of Finance, Planning and Economic Development to establish a Transitional Climate Finance Unit in Uganda

Uganda – 26 August 2022. Creating a Transitional Climate Finance Unit (TCFU) in Ministry of Finance, Planning, and Economic Development of the Republic of Uganda will lead to a transformational change in access to climate finance for Uganda. 

To fully align to this, the Ministry working with GGGI have commenced activities to establish a TCFU to offer advisory services. Since April 2022, the UK Foreign, Commonwealth and Development Office (FCDO) agreed to support the program during the COP26 launch of the Taskforce on Access to Climate Finance worth Two Million USD. 

In establishing a TCFU, Uganda joins other countries like Kenya, Malawi, Zambia, and Nepal that have established institutional frameworks that have enhanced the flow of climate change finance from domestic and international sources. For example, Kenya has a Climate Finance Mobilization Unit with eleven fully dedicated staff, while Zambia has thirteen. 

The role of the TCFU will be to establish a well-functioning and dedicated department at the Ministry to manage domestic and international climate change financial issues in Uganda from mobilization, utilization, monitoring, evaluation, and reporting. 

Having a task force places Uganda in the leading seat to centralize climate finance mobilization. Also, it will enhance the capacity of the MoFPED to perform the duties of climate finance mobilization as a National Designated Authority (NDA) and ensure multi-stakeholder participation in mobilizing finance for climate actions in Uganda. 

The costed implementation plan for the NDCs projects that US$ 2.5 billion as the annual requirement for the 15 years since 2015 to address the impacts of climate change. The Government of Uganda pledges to provide 30% of the funds needed to implement NDCs and expects to outsource the remaining 70% externally. 

The TACF will align itself to the following principles: 

  • Principle 1 –Country ownership: Programmes and projects will be owned and driven by recipient governments and the communities they intend to benefit, with national priorities framing providers’ support. 
  • Principle 2 – Harmonisation of processes and alignment of finance to national plans: Processes associated with every stage of accessing climate finance will be streamlined and coordinated to offer a more strategic, coherent, and efficient approach for recipients.  
  • Principle 3 – Responsiveness to country needs and Climate Vulnerability: Climate finance will respond to the self-defined needs and priorities. 
  • Principle 4 – Flexibility and innovation: Adopt more innovative and agile approaches alongside proportionate risk management processes to deliver climate finance that responds to local capacity and needs variations. 
  • Principle 5 – Transparency and accountability: Climate finance should be more predictable, transparent and yield measurable progress towards recipient countries’ climate capabilities and goals. 

The TCFU will increase institutional coordination and capacity to design funding programs efficiently, with the overall aim to accelerate the flow of climate finance to Uganda; develop systems, capabilities, and innovations, including the competency to develop innovatively fundable and bankable initiatives; and will build on efforts by MoFPED through the Department of Development Assistance and Regional Cooperation (DARC) to build the capacity of line ministries, agencies, CSOs, and private sector to attract, plan and implement climate finance.