aBi Finance launches UGX.124 billion fund for sustainable agriculture
KAMPALA – aBi Finance Limited has unveiled the Green Finance Fund and Green Taxonomy worth Ugx.124 billion, to promote the sustainable growth and resilience of the agriculture sector in Uganda.
The Taxonomy and Fund were launched at Kampala Serena Hotel 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, Ms. Mona Muguma Ssebuliba and Mr. Felix Okoboi, the Board Chairman who was represented by Ms. Charity Ekudu, Director, aBi Finance.
The Green Finance Fund is a blend of three green finance instruments including; Green Lines of Credit worth Ugx.120 billion, Capacity building worth Ush 4 billion and Green Agribusiness Guarantees. The fund is designed and can be accessed by Tier 1, 2,3 and 4 financial institutions in Uganda.
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 of the Green Finance Fund and Taxonomy, Ms. 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,” said the Deputy Governor.”
Ms. 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.
Source: PML Daily