UNCDF in Uganda
East and Southern Africa and the Arab States Region
Loans
Investment grants
Our work
The UN Capital Development Fund works with the Government of Uganda and development partners to catalyse investment for sustainable economic growth. Since 1982, UNCDF has expanded access to finance and strengthened local governance systems to address the most pressing development challenges and prioritising the most vulnerable communities. Through innovative financing models and the deployment of grants, loans, guarantees, and tailored advisory services, UNCDF helps unlock capital, strengthen local ecosystems, and drive systemic change in line with national development priorities. These efforts aim to generate meaningful opportunities, enhance livelihoods, and contribute to sustainable economic growth and equitable prosperity.
Financing locally led adaptation
Uganda is increasingly exposed to the impacts of climate change, with growing climate variability placing pressure on local economies and livelihoods. Local governments are on the frontlines of responding to these risks, yet often face constraints in fiscal space, institutional capacity, and access to climate finance, limiting their ability to plan, finance, and deliver effective, locally led adaptation solutions.
To address this gap, UNCDF has worked for over five years with the Government of Uganda to increase access to climate finance at the local level and contribute to building resilient local economies using the Local Climate Adaptive Living Facility, or LoCAL approach. With a view to delivering results at scale, UNCDF in 2025 began exploring how to attract private sector engagement and support sustainable economic growth through a new market finance funding window, known as LoCAL+.
The LoCAL Facility deploys Performance-Based Climate Resilience Grants (PBCRGs) to local governments combined with targeted technical assistance to help local governments integrate climate adaptation into planning, budgeting, and public financial management systems.
LoCAL builds capacity by channelling finance through Uganda’s financial management systems, rather than creating parallel programmes. This approach strengthens institutional systems, promotes accountability, and supports the long-term sustainability of climate adaptation investments. Communities and their local governments take a leading role in identifying and designing the investments they need to adapt to the impacts of climate change, ensuring that adaptation responses are inclusive, locally relevant, and responsive to identified climate risks.
The first step in implementing LoCAL in Uganda, was the development of a Climate Risk and Vulnerability Assessment (CRVA) to guide local governments on the risks and possible impacts of climate changes at the local level.
LoCAL-supported investments are informed by the CRVA and aligned with national priorities, including Uganda’s National Adaptation Plan and updated Nationally Determined Contributions.
Between 2022 and 2025, UNCDF expanded such investments from an initial four to 14 districts with USD 13.7 million in funding from Belgium, the European Union, Denmark, Ireland and with co-financing from the Government of Uganda. This expansion reflects the effectiveness of the LoCAL model as a mechanism for delivering performance-based, traceable climate finance at the local level.
After two cycles of PBCRGs, over 40 climate-resilient investments were completed in the initial four districts, verified by the Annual Performance Assessment and confirming the full traceability of the climate financing, meeting international climate finance requirements. These results demonstrate strengthened local government capacity to plan, implement, and manage climate adaptation investments in line with results-based financing principles.
UNCDF is supporting Uganda to unlock additional finance through the Green Climate Fund (GCF) and strengthening public financial management systems. The long-term goal is economic resilience and adaptation at scale for Uganda’s most vulnerable communities, delivered through empowered, well-resourced local governments capable of responding effectively to climate risks.
Capital for inclusive growth
FinWise is a five-year initiative (2024–2028) designed to unlock capital for Uganda’s micro, small, and medium-sized enterprises (MSMEs)—which account for 90–95% of all businesses and employ more than 2.5 million people. Despite their central role in the economy, MSMEs remain significantly underserved by formal finance, contributing to an estimated USD 8.8 billion financing gap. FinWise addresses this challenge by deploying blended finance instruments—including grants, concessional loans, and guarantees—to de-risk lending and crowd in private capital. These financial interventions are complemented by investment readiness support, such as digital business management tools and tailored business advisory services, aimed at strengthening MSME performance, resilience, and growth potential.
By 2028, UNCDF aims to enhance the investment readiness of 150,000 MSMEs, expand access to finance for 250,000 businesses, and catalyse USD 90 million in financing.
FinWise is implemented through:
- a $23.8M partnership with Mastercard Foundation, focused on expanding access to finance for young women-inclusive MSMEs through the digital economy
- $1.5 million in funding from the European Civil Protection and Humanitarian Aid Operations (ECHO), focusing on unlocking access to finance for refugees for improved self-reliance and resilient livelihoods
- a $3.2M partnership with the UN World Food Programme (WFP), with a focus on unlocking access to finance for micro- and small agribusinesses primarily owned by youth, women and refugees.
Enabling access to affordable finance for agribusiness small and medium-sized enterprises (SMEs)
With €10.5 million from the European Union, UNCDF, in partnership with the Private Sector Foundation of Uganda, Aceli Africa and Uganda Development Bank, is bridging financing gaps for agribusiness SMEs through the START Facility. Using performance-based grants to partners, and technical assistance and ‘business development skilling’ to SMEs—START mobilizes public and private capital for agri-businesses and builds capacity for inclusive growth. Initially piloted in northern Uganda, START has financed over 50 SMEs with $3.16m, supported 150 with business development services, created 500+ jobs, and linked 120,000 farmers to markets. In 2023, START expanded country-wide, with a target of enabling 300 agribusinesses access over $30m in affordable and transformative capital to create thousands of jobs and help realize Uganda’s ambitions for agricultural transformation.
Teopista Amony, employee at Sunrise Agro-processing, at Sunrise's sunflower facility in Lira, Uganda. With START financing, the company expanded production and created jobs for over 3,000 youth and women farmers.
Durable finance solutions for forcibly displaced persons
Small businesses owned by forcibly displaced persons and host community members whose businesses support the livelihoods of displaced persons in the northern Ugandan cities of Gulu and Arua, have accessed $265,000 in concessional loans under the TONDEKA Facility. The Swiss Agency for Development and Cooperation provided $1.8 million, while Pride Microfinance Ltd invested $42,701 in businesses once deemed too risky. Pride Microfinance has since scaled to delivering over $450,000 using a group lending model. To date, 972 MSMEs, 80 percent of which are led by women, have received financing, creating 1,110 jobs, including 936 for women, 299 for refugees, and 340 for internally displaced people.
UNCDF is also catalysing over $3.3 million in private investment for sub-national revenue infrastructure projects including modern markets in Gulu and Arua cities and a multipurpose resource centre in Arua city through pilot Public Private Partnerships (PPPs). In partnership with the government and city authorities, UNCDF is improving subnational PPP development and approval processes. UNCDF’s support for updating and implementing Revenue Enhancement Action Plans has strengthened local revenue performance.
Financing energy access and sustainable urban development
UNCDF is supporting local governments to mobilize private capital and deliver sustainable services to advance inclusive, climate-smart economic growth and systemic change in Uganda’s urban areas. Sustainable urban development and energy access is vital to Uganda’s Greater Kampala Metropolitan Area and the underserved islands of Lake Victoria. Working with the Kampala Capital City Authority and national ministries, UNCDF is strengthening local public financial management systems and piloting innovative blended finance solutions, including localized PPPs. Mukono and Mpigi Districts are implementing two solar mini-grid projects, leveraging $790,000 in public investment to crowd in over $7 million in private sector financing from Equatoria Engie and Winch Energy (now NEoT Offgrid Africa). These investments are expanding clean energy access, building climate-resilient local economies, and demonstrating scalable models for infrastructure finance in secondary cities. By supporting local governments to mobilize private capital and deliver sustainable services, UNCDF is advancing inclusive, climate-smart economic growth and systemic change in Uganda’s urban areas. This activity is part of the European Union-funded Programme on Integrated Local Finances for Sustainable Urban Development.
Latest news and stories
Our partners
UNCDF’s work in Uganda is made possible thanks to collaboration with the Government of Uganda, Federal Government of Belgium, Denmark, the European Union, the Mastercard Foundation, The Government of Ireland, Sweden in Uganda, Swiss Agency for Development Cooperation, and United Nations World Food Programme.
Documents
This section brings together key documents related to UNCDF’s work in the country. It includes a curated selection of publications, papers, and reports that reflect the scope of engagement at country level, from programme design to implementation and outcomes.
These documents offer additional context on how initiatives are developed and delivered, and how partnerships contribute to advancing national priorities. They are intended to support transparency, facilitate knowledge sharing and serve as a practical resource for partners, stakeholders and others seeking a deeper understanding of UNCDF’s work.
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Contact us
For inquiries about UNCDF’s work in Uganda, including partnerships, investment opportunities, or ongoing initiatives, please contact: esaa.region@uncdf.org.
