Climate Finance Facility (CFF): Driving Uganda’s Transition to a Green Economy
The Climate Finance Facility (CFF) is Uganda Development Bank’s dedicated green financing vehicle, designed to mobilize capital from both domestic and international sources to support climate-smart investments.
Targeting both private and public sector entities, the CFF channels funding into low-carbon, climate-resilient projects using a range of blended finance instruments, including debt, equity, trade and asset finance, guarantees, and grants.
Through this facility, UDB plays a leading role in structuring and arranging green finance transactions, fostering the development of innovative climate solutions, technologies, and markets across Uganda. The CFF aims to:
- Build a robust pipeline of bankable green projects
- Attract co-investments from development partners and the private sector
- Demonstrate innovative climate finance engineering tailored to Uganda’s development context
To reduce barriers to entry, the facility offers concessional loans at below-market interest rates and blends non-repayable grants with debt to mitigate common challenges such as high start-up costs, long payback periods, and elevated transaction costs associated with green investments.
As a mark of its commitment to sustainable development, UDB has committed UGX 50 billion towards the capitalization of the Climate Finance Facility. These resources will support
targeted investments that accelerate Uganda’s transition to a low-carbon, climate-resilient economy.
The Climate Finance Facility (CFF) is Uganda Development Bank’s dedicated green financing vehicle, established to mobilize capital from both domestic and international sources in support of climate-smart investments. Targeting both private and public sector entities, the CFF channels resources into low-carbon and climate-resilient projects through a mix of blended finance instruments, including debt, equity, trade and asset finance, guarantees, and grants.
Through this facility, UDB will lead the structuring and arrangement of green finance transactions, catalyzing the development of innovative climate solutions, technologies, and markets. The CFF aims to build a strong pipeline of bankable projects, attract co-investments, and demonstrate climate finance engineering tailored to Uganda’s context.
The facility offers concessional loans at below-market interest rates and actively seeks to leverage non-repayable grants to blend with debt financing. This blended approach helps mitigate risks associated with high start-up costs, extended payback periods, and the relatively high transaction costs of green investments.
To underscore its commitment to sustainable development, UDB has earmarked UGX 50 billion towards the capitalization of the Climate Finance Facility, enabling targeted investments in green projects that drive Uganda’s transition to a low-carbon economy.
