Uganda’s Climate Finance Unit: A Model for Mobilizing Climate Finance
Uganda is one of the world’s most climate-vulnerable countries despite contributing negligibly to global greenhouse gases. Rising temperatures, erratic rainfall, floods and prolonged droughts already disrupt agriculture, which provides nearly a quarter of GDP and employs close to 70% of the population.
Between 2010 and 2020, climate shocks such as floods and droughts cost Ugandan households an average of USD 140 million annually, with losses projected to reach USD 5 billion over the next decade without stronger action. Uganda’s latest NDC, submitted in 2022, estimates the cost of mitigation, adaptation and coordination measures at USD 28.1 billion by 2030, of which the country has pledged more than USD 4 billion in domestic resources. Though climate finance is crucial, significant challenges remain and only a fraction reaches Least Developed Countries (LDCs).
To help close this gap, Uganda created a climate finance unit (CFU) in the Ministry of Finance, Planning and Economic Development (MoFPED) to build investment readiness, coordinate climate finance and ensure funding aligns with national development priorities. By engaging the private sector, strengthening national ownership of climate action and fostering regional collaboration to share lessons and attract investment, Uganda is positioning itself as a regional leader on climate finance access.
Building Uganda’s Climate Finance Unit
CFUs are dedicated units established by governments — typically in finance ministries but sometimes in other central ministries, the prime minister’s office or as stand-alone entities — to coordinate climate resource mobilization, align it with national priorities and manage relationships with funders. The Taskforce on Access to Climate Finance, launched to help climate-vulnerable countries improve access to finance, together with the NDC Partnership, has supported countries like Uganda in setting up CFUs.
Their work strengthens project pipelines, builds institutional capacity, embeds climate finance into core economic planning and strengthens the coordination and mobilization of climate finance. CFUs help countries move beyond isolated projects, which, without a clear link to an overarching national strategy and other projects, can be hard for funders to prioritize or too small to attract large-scale investment.
To support countries in setting up and operating CFUs, the Center for Access to Climate Finance — an initiative of the Taskforce hosted by the NDC Partnership Support Unit — offers guidance on how to effectively design and implement CFUs and ensure their long-term sustainability.
Uganda established its CFU in 2022 with support from the United Kingdom’s Foreign, Commonwealth & Development Office (FCDO) and the Global Green Growth Institute (GGGI), as part of its engagement with the Taskforce. Embedded in the Ministry of Finance, Planning and Economic Development (MoFPED), the CFU works with the Ministry of Water and Environment, the National Planning Authority and key MoFPED departments — including the Macro-Economic Policy Department and the Directorate of Debt and Cash Policy — as well as external institutions such as the Uganda Development Bank (UDB), the Bank of Uganda and commercial banks. Together, these actors are integrating climate priorities into national planning and budgeting. The CFU’s mandate spans mobilization, coordination and the monitoring and reporting of both domestic and international climate finance.
“If you want climate finance to work, it has to sit inside the finance ministry,” says Denis Mugagga, Head of the CFU. “That way, it connects directly with national systems and with the priorities we already manage.”
Through this work, Uganda, together with other pioneer countries included in the Taskforce, is testing innovative approaches, and showing development partners and regional peers how government-led systems can improve access to and programming of climate finance.
Unlocking Private Sector Investment
Mobilizing private sector finance is one of the CFU’s central objectives. In 2023, with support from the Partnership Action Fund (PAF), the government issued climate-mainstreaming guidelines for the financial sector to help banks, lenders, insurers and other financial players align their portfolios with the country’s NDC. The CFU is leading this effort, which is already prompting institutions across the finance sector to reassess how they evaluate climate-related risks and opportunities and is complemented by other key policy documents, including the climate finance strategy and the national green taxonomy.
The CFU led Uganda’s participation in the NDC Partnership’s Project Status Checklist pilot. The checklist engages project developers and financiers, standardizes how project developers present financial, technical and procedural information, making it easier for investors to compare proposals, select investments and see how they fit into national climate goals. For Uganda, it is a practical way to build a consolidated pipeline of bankable projects linked with the national development agenda.
In March 2025, the CFU co-hosted a matchmaking event in Kampala that brought together more than 20 project developers and potential funders. Ahead of the event, the CFU prepared a “deal book” of priority projects, shared with investors to help them identify companies and investments of interest. The event then facilitated direct discussions between project developers and investors including the East African Development Bank, Agence Française de Développement (AFD), the UN Capital Development Fund (UNCDF), the Uganda Development Bank, Ascent Capital Partners, Absa Bank, FCA Investments, Injaro Investments Ltd, AgDevCo, Swedfund and SNV Netherlands and the Dutch Fund for Climate and Development (DFCD).
“The Project Checklist is making a difference,” says Mr. Mugagga. “Instead of everyone bringing projects in different formats, we had one standard. That allowed us to see gaps clearly, prepare developers better and link them with investors. It’s already opening doors.”
Building on this momentum, the CFU is now working with the Uganda Development Bank (UDB) to make the checklist a regular part of how investment proposals are reviewed. Together they are developing a single, prioritized pipeline of projects drawn from Uganda’s NDC 3.0, the Climate Change Act and the Long-Term Low Emissions Development Strategy (LT-LEDS). This pipeline will also connect with the bank’s new Climate Finance Vehicle — a “green bank” within UDB designed to expand access to credit, manage climate risks and mobilize private capital.
At the same time, a diagnostic study in the Bank of Uganda, supported by the NDC Partnership Readiness Support for Greening Central Banks through the European Investment Bank (EIB) will help in assessing climate risks across the financial sector, further anchoring resilience in Uganda’s financial system.
Toward a Programmatic Climate Finance System
Uganda is moving from isolated projects toward a program-based, whole-of-government approach where climate finance is planned and directed through national strategies towards low carbon and climate resilient pathways. The CFU is helping drive this shift by coordinating ministries, development partners and financial institutions so that investments reinforce one another and advance both mitigation and adaptation goals.
Uganda’s climate financing vehicle is a key part of this programmatic approach. It channels finance into clean energy, resilience and adaptation projects and supports implementation through partnerships with civil society organizations and local governments. The CFU is also working with partners on blended finance mechanisms — using public or concessional funds to lower risks and attract private capital.
“Our role is to make sure climate finance is not seen as an add-on,” says Mr. Mugagga. “It has to be part of the way we plan, budget and structure investments.”
This whole-of-government shift is supported by long-term embedded support through the NDC Partnership, including an in-country facilitator in the Ministry of Water and Environment, a climate finance advisor and an economic advisor seconded to MoFPED. Together with technical partners such as GIZ and the UN Capital Development Fund, this network has helped Uganda keep climate finance planning on track and strengthen key institutions between NDC updates.
Uganda is now developing its NDC 3.0 with extensive support, mobilized through the NDC Partnership, from the African Development Bank (AfDB), United Nations Development Programme (UNDP), United Nations Children’s Fund (UNICEF), Food and Agriculture Organization (FAO), United Nations Environment Programme (UNEP), Office of the United Nations High Commissioner for Refugees (UNHCR), AFD, the World Bank, World Wide Fund for Nature (WWF), Regenerate Africa, Environmental Management for Livelihood Improvement (EMLI) and the International Fund for Agricultural Development (IFAD).
Catalyzing Regional Leadership and Collaboration
As Uganda strengthens its capacity to design and deliver large-scale climate finance programs, it is also emerging as a regional leader. The country co-chairs the Coalition of Finance Ministers for Climate Action and has held bilateral exchanges with peers such as Somalia and Rwanda to share lessons from its CFU and explore ways to replicate the model.
The recent East Africa Climate Finance Directors’ meeting, hosted in Kampala, provided a structured forum for finance ministries to compare approaches and identify common priorities for mobilizing climate finance. Continued engagement with regional development banks and partners such as AfDB and GCF is helping translate these types of exchanges into opportunities for joint programming and peer learning.
“Other countries are asking us what we have done and how we have done it,” says Mr. Mugagga. “We share our work so that the region advances together and strengthens all of our bargaining power.”
A Model for Accelerating Access to Climate Finance
Recent project proposals from MoFPED through the CFU — such as e-motorcycles for clean transport and an integrated water-security project in the country’s primary cattle corridor — show how stronger pipelines are translating into investment-ready ideas. The NDC Partnership in-country facilitator and embedded advisors helped coordinate technical assistance and connect Uganda’s government and project developers with potential funders, strengthening the projects’ design and readiness.
Uganda’s immediate priorities include refining the NDC implementation plan, scaling private sector engagement and strengthening readiness for mechanisms such as Article 6 carbon markets and REDD+, which could open new streams of finance.
For Denis Mugagga, the CFU represents a turning point: embedding climate finance inside the finance ministry is proving that national institutions can mobilize resources at scale and align investments with development priorities, providing a model for other countries in the region.
“The lesson is simple,” reflects Mr. Mugagga. “When you build the right institution and give it the mandate, progress follows.”
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Learn more about CFUs in this policy brief from the Center for Access to Climate Finance.