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

Uganda – 26 August 2022.

The Ministry of Finance, Planning, and Economic Development (MoFPED) of the Republic of Uganda working with the Global Green Growth Institute (GGGI), the UK Foreign, Commonwealth and Development Office (FCDO) and the British High Commission in Kampala have commenced activities to establish a Climate Finance Unit (CFU) in MoFPED. Establishing a CFU will lead to a transformational change in access to climate finance for Uganda. The role of the CFU 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.

The CFU 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) of the GCF and ensure multi-stakeholder participation in mobilizing finance for climate actions in Uganda. More importantly, in September 2022, Uganda submitted an updated Nationally Determined Contribution (NDC) exhibiting ambitious economy-wide mitigation target in 2030 of 24.7% reduction below the Business As Usual (BAU) scenario. The CFU will play a crucial role in contributing to this. The projected cost of implementing adaptation, mitigation, coordination, monitoring, and reporting of the updated NDC is estimated at USD 28.1 billion. Uganda committed to mobilize domestic resources to cover the unconditional actions to the tune of USD 4.1 billion equivalent to 15%. Uganda expects external resources to meet the conditional measures and actions..

The CFU is being established at the same time as Uganda has been selected as one of five pioneer countries in a trial for the UK COP 26 Presidency Taskforce on Access to Climate Finnace. The CFU lends itself to the principles and recommendations of the Task force. The principles of the taskforce are:

  • 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.

in adhering to the principles and recommendations of the taskforce, the CFU 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. In establishing a CFU, 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.