The Bank of Uganda is developing the Climate Risk Guidelines which will be issued soon to provide clear direction on identifying, managing, and disclosing climate-related financial risks within the banking sector , BoU Governor Dr. Michael Atingi-Ego, has said.
Governor Atingi-Ego said the Central Bank is also developing climate stress testing tools in collaboration with the Network for Greening the Financial System (NGFS) to assess the resilience of financial institutions under various climate scenarios.
It draws from global best practices, including the GRI and ICMA Bond Principles, while being tailored to the East African context.
“ In partnership with MoFPED and other stakeholders, we are developing a taxonomy to define eligible green activities, reduce greenwashing, and enhance transparency in climate finance,” Atingi-Ego stated adding that together with the Uganda Bankers Association (UBA) and the Uganda Institute of Banking and Financial Services (UIBFS), the Central Bank is building capacity in green finance product development, risk assessment, data governance, and reporting.
Atingi-Ego was giving a key note address at the just concluded first National Private Sector Engagement Forum on Climate Finance ( NaPSEF 1) held at Serena Hotel, Kampala.
The Governor called upon the banking sector to integrate climate considerations into their business models- noting that it is not only a regulatory burden—it is a strategic imperative. “It presents a unique opportunity to align profitability with sustainability”.
“We encourage financial institutions to define the scope of their Sustainable Finance Frameworks (SFFs) in line with national sustainability goals. Develop exclusion lists to mitigate environmental and social risks and engage third-party reviewers for independent ESG assurance to enhance data reliability and transparency,” he stressed.
“I urge all public and private sector actors to collaborate more closely, invest more boldly, and plan more sustainably. ESG integration is not a distant goal—it is expected to become mainstream in Uganda within the next 2 to 5 years, he added .
Mr. Denis Mugaga, the Head of the Climate Finance Unit , told the well attended forum that government of Uganda created a Climate Finance Unit in the Minsitry of Finance ,Planing and Economic Development (MoFPED )to lead on the coordination of climate and green finance mobilization, expenditure and tracking.
“The work of the Climate Finance Unit commenced in March 2023 with the support of the Foreign, Commonwealth & Development Office (FCDO) and now with the European Union through the Global Green Growth Institute (GGGI),” Mugaga said.
Mugaga revealed that the ministry has et up a National Green Taxonomy (NGT) 2025 to provide a clear criteria for classifying green projects. It aims at supporting the private sector to channel capital into investments that contribute to carbon reduction, climate resilience.
“ We have guidelines for mainstreaming climate actions in the financial sector 2024 which provide financial institutions in Uganda with clear and practical steps on how climate action can be mainstreamed into their operations. This is in addition to the launch of the Uganda Carbon Markets Regulations & Fiscal Framework 2025 to support Uganda’s readiness to participate in carbon markets & guide fiscal requirements thereof,” he added .
Mr. Jim Mugunga , the Director Private Public Partnerships (PPP) at the Minsitry of Finance , underscored the importance of PPPs in primarily addressing infrastructure and service deficits.
By leveraging private sector capital, expertise and efficiencies, Mugunga argued , government is positioning itself to attract private capital to supplement its annual expenditure on infrastructure and services now at the tune of Ug.Shs. 13.8 Trillion which amount is insufficient.
“ There is a need for alternative financing sources. PPPs advance the case for climate action by unlocking private capital,” Mugunga added.
