aBi Finance unveils Ugx124b Fund to boost sustainable agriculture & climate conservation in Uganda

aBi Finance unveils Ugx124b Fund to boost sustainable agriculture & climate conservation in Uganda

By Wod Omoro

 aBi finance limited on Tuesday unveiled the green finance fund and green taxonomy worth Ugx124b,to promote the sustainable growth and resilience of the agriculture sector in Uganda.

The taxonomy and fund were launched at by the Deputy Governor – Bank of Uganda Dr. Michael Atingi-Ego alongside His Excellency, the Danish Ambassador to Uganda, Signe Winding Albjerg, the CEO aBi Finance, Mona Muguma Ssebuliba and Felix Okoboi, the Board chairman who was represented by Charity Ekudu, Director, aBi Finance at Kampala Serena Hotel.

The green finance fund is a blend of three green finance instruments including; creen lines of credit worth Ugx120b, capacity building worth Ugx4b and green agribusiness guarantees. The fund is designed and can be accessed by tier 1, 2,3 and 4 financial institutions in Uganda.

Mona Muguma Ssebuliba, the CEO aBi finance, signs a board to signify the launch of the green finance fund and green taxonomy as BoU Deputy Governor Dr. Atingi-Ego looks on. Courtesy photo.

A green taxonomy is a list or manual that highlights investment options that are environmentally sustainable that is, green and, by extension, those that aren’t. aBi Finance partnered with the global green growth institute (GGGI) to develop the green agribusiness taxonomy. This agribusiness green taxonomy is a crucial tool for financial institutions for greening their operations, expanding their green credit portfolios, guiding on how to efficiently administer green finance and report on ESG, that is, greening activities with integrity,

Speaking at the launch Muguma said the two initiatives were launched to promote climate Change Adaptation, Mitigation and Biodiversity Conservation in Uganda.  “Managing climate change requires that those tasked with Governance of our institutions, that is board and management MUST appreciate the climate change threats to business and start to act immediately. Once governance is aligned, then commit resources to develop and institutionalise clear Environmental and Socially inclusive policies, frameworks, products, build capacity (for staff, systems and infrastructure) and pursue partnerships to enable climate adaptation, mitigation and biodiversity conservation investments.”

She observed that globally, Uganda is the 12th most vulnerable and the 49th least prepared out of 195 countries, to deal with vagaries climate change. Production and productivity of small holder farmers and agribusinesses continues to suffer from climate change vagaries evidenced by change in patterns of rainfall, drought and temperature.

Addressing guests at the launch, Dr. Michael Atingi-Ego Deputy Governor – Bank of Uganda,  commended aBi Finance for putting together the Green Taxonomy and Green Finance Fund because the interventions will enable financial institutions to implement Environment, Social and good governance practices while offering more financing to agribusinesses and smallholder farmers for green investments leading to resilience and sustainability of both the financial services sector and the agribusiness sector. “This fund and taxonomy is going to foster a vibrant green finance ecosystem by harnessing technology and innovation to build markets and solutions for transitioning to a climate resilient and low-carbon future. For example, green finance for investing in climate resilience practices such as growing early maturing seed, will enable farmers to harvest early, sell early and repay their loans in time hence improving the performance of loan portfolios for their financial institutions. We urge all financial services sector and agribusiness sector actors to pursue green investments that are adapted to or mitigate climate change and conserve biodiversity,” saidthe Deputy Governor.”

Ekudu, the aBi Finance Board Director, noted that the funds and Taxonomy provide an exciting opportunity of empowering financial institutions with the much-needed liquidity, de-risking mechanisms and technical support to offer green financing to smallholder farmers and agribusinesses. “The green financing accessed by the smallholder farmers and agribusinesses will in addition to addressing climate change adaptation, mitigation and biodiversity conservation, also contribute to equitable economic growth, job creation and improved incomes,” she said.

To apply for the fund and taxonomy, eligible firms are encouraged to visit the aBi Finance website www.abi.co.ug/ to download a copy of the green agribusiness taxonomy and learn more about the green finance fund and about the eligibility and requirements for accessing aBi finance products.

The launch of the fund and taxonomy closely follows the signing of an agreement between the Royal Danish Embassy, the European Union, and the IFU to allow new investments into aBi Finance in June 2022.

Founded in 2010 aBi Finance Ltd has sustainably encouraged the growth of agribusiness value chain actors by stimulating access to finance through; providing liquidity, de-risking agricultural finance and building capacity of financial services actors to avail financial services to agribusinesses.

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