Improve financing for green businesses in Uganda I UGEFA

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Christine Meyer

Senior Manager + Co-Lead Green Entrepreneurship

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The Uganda Green Enterprise Finance Accelerator aims to increase the flow of green finance into the Ugandan small and medium-sized enterprises (SMEs) sector through strengthening green SMEs and facilitating SME debt financing.

Green, small and medium-sized enterprises play a significant role in Uganda's transition to a green and inclusive economy. SMEs contribute about 90% of private sector production and provide employment to over 2.5 million people.

Green enterprises in particular are becoming increasingly important drivers for sustainable development and play a key role in tackling current economic, social and environmental challenges. They engage in sustainable production applying eco-innovation and innovative green business models, while maintaining the natural resources base of Uganda and providing green jobs.

Green SMEs hold the potential to drive sustainable development in Uganda, both through growing economic activity and ensuring that the growth is rooted in sustainable business models, green products and services and job creation.

What do green SMEs need in order to grow?

Growth and scale-up of green SMEs is mainly hindered by lack of access to and high cost of finance. To address this gap for green and inclusive SMEs in Uganda, the project Uganda Green Enterprise Finance Accelerator (UGEFA) applies an innovative approach of improving the bankability of green SMEs while facilitating the provision of debt finance to green SMEs. The facilitation of finance for green SMEs will support them to invest in business growth and to amplify their green impacts, while creating jobs. The UGEFA offers participatory, top-tier business development support for green SMEs. The goal is to build their financial capacity and strengthen their scalable business models. At the same time, it leads to positive social and environmental impacts.

Besides direct enterprise support, UGEFA works alongside banks to co-create opportunities to increase accessibility and tailoring of loans to green business models and technologies.

This comprehensive approach facilitates access to tailored finance for green SMEs across different sectors ranging from green energy, sustainable tourism, urban waste management, green manufacturing to sustainable transport and mobility, supporting them to grow their enterprises and thus scale their sustainability impacts, including the creation of green jobs.

The purpose of the project is to support green SMEs access financing through our local partner banks, and to improve how these SMEs can operate in achieving their objectives. - Fred Opio, Green Finance Specialist

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Besides its finance-focussed acceleration support for green SMEs, UGEFA is hosting the Uganda Green Finance Academy to strengthen the financial sector’s capacity to successfully leverage the potential of financing green SMEs and environmental-related projects in Uganda. The hands-on trainings support financiers to gain a thorough understanding to deliver tailored financing for green investments, including for SMEs across sectors, while tapping into growing international capital earmarked for climate and broader green finance purposes.

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Interview on Good Morning Uganda

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Does it work?

"I’m learning quite some key aspects which I didn’t know. The business plan training that we had was very enlightening, because it showed me some mistakes I was doing in terms of identifying specific things like my target group, target market, how I do my messaging […]”, says Babra Adoso from MICE UGANDA, a company that specialises in travel and safari arrangements. Further praise comes from GO5 Packaging, a company that manufactures non-woven bags that can degrade within 90 days and have an environmental impact of only 10 % of that of a plastic bag. The founder of the company, Najimah Katete, says: “The fact that you came and your focus was on SMEs that actually have an impact on the environment that was really really amazing. I like to commend you for that. And keep up the good work!”. Brian Kakembo from Weye Clean Energy, a company with a mission of promoting clean and sustainable cooking and heating solutions, highlights the support from the UGEFA Business Advisors who helped him to grow his business: “I really loved it. When I think back, it was amazing. […] It has been really helpful. They even help you beyond the programme.”

During the next four years a team of experts on Green projects will provide a combination of technical assistance and special financing conditions to green companies in Uganda. Excited to see the Green Deal being implemented in Uganda. - Adolfo Cires Alonso

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SME Stories from Uganda

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