Small and medium-sized enterprises (SMEs) play a significant role in Uganda's transition to a green and inclusive economy. Green enterprises in particular are becoming increasingly important drivers for a transition towards a Green Economy and play a key role in tackling current economic and environmental challenges. They engage in sustainable production applying eco-innovation, maintaining the natural resources base of Uganda while providing local green jobs and business opportunities for vulnerable groups like women and unemployed youth.
SMEs in general serve as the backbone of the formal and informal job market, with their growth and scale-up mainly hindered by a lack of business and management skills and a lack of access to finance. It is not only early-stage MSMEs who are often unable to access business finance such as credit or equity, partly due to their internal lack of professional management systems, and partly due to obstacles such as collateralization, prohibitive risk ratings for young and small enterprises, and high interest rates. To address this gap in access to finance for green and inclusive SMEs in Uganda in the sectors of sustainable energy, tourism, urban waste management, manufacturing, and transport and mobility, this project establishes an Access-to-Finance facility for these SMEs.
The Uganda Green Enterprise Finance Accelerator (UGEFA) provides access to finance for green enterprises through facilitating tailored loans and direct acceleration support. On the one hand, UGEFA provides Business Development Support for green enterprises in group and one-on-one formats to build their financial capacity and stengthen their scalable business models. On the other hand, 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, supporting them to grow their enterprises and thus scale their sustainability impacts, including the creation of green jobs. Furthermore, it reduces the risk of financing change by working together with commercial banks to provide green SME lending. By providing insights into the potential of green SME finance, the Uganda Green Enterprise Finance Accelerator builds a community of practice among financial institutions and other stakeholders of entrepreneurial ecosystems.
Four annual Green Finance Dialogues and interactive training courses on green finance will build a community of practice, increasing knowledge on green financing opportunties and sharing success stories and learnings. A variety of case studies will assess and document lessons learnt, journeys of green SMEs investing in growth as well as impacts created.
adelphi will conceptualise and implement a toolkit as well as training formats tailored to Ugandan green SMEs and support around 200 enterprises in the country. To select green enterprises and manage support activities, adelphi will also develop an online platform. In addition, adelphi will collaborate with partner banks to conceptualise and implement a funding facilitation facility that will help banks to provide tailored loans to green SMEs. adelphi will also organise and implement the interactive events of this project, with up to 120 participants.