Accelerating public and private climate-friendly investments for resilient development
The NDC Action project in Uganda aims to provide support for the development and refinement of climate-friendly investment plans, followed by the facilitation of draft proposals for climate funds. A scoping report on climate adaptation finance has been prepared for the prioritized thematic investment areas, specifically focusing on solar-powered irrigation, agroforestry, and solar dryers for smallholder farmers. This report includes an analysis of private sector financing barriers, innovative financing instruments, and business models to promote the adoption and scaling of successful investments. Notably, there have been instances of successful actions in the chosen priority areas by various actors across Uganda and other jurisdictions with similar socioeconomic and environmental contexts.
This project represents a significant departure from the traditional approach of viewing NDC implementation solely through a governmental and social lens. It emphasizes the importance of incorporating market dynamics to attract implementation investments from non-traditional players, including those from both the formal and informal sectors as well as individual citizens, who constitute the mainstream of Uganda's economy.
Another crucial aspect of the project is the integration of complementary sectors to maximize impact, moving away from isolated sector-based investments. An analytical report has been compiled, utilizing empirical data from ongoing work in the country, including contributions from farmer cooperatives and Village Savings & Loans Associations (VSLAs). This report highlights the potential for leveraging low-risk financing structures offered by local cooperatives, which are accessible to a majority of Ugandans employed in the informal sector. The findings demonstrate the enhanced impact of an integrated approach compared to isolated investments, providing a comparison between investing in single solutions and integrated climate solution packages for the project's priority thematic areas. The results indicate significant income increments through integrated investment options.
The project also aims to engage local financial institutions and informal financing sectors such as Savings and Credit Cooperative Organizations (SACCOs) to mobilize financing for investments in the priority thematic areas by grassroots communities. Empirical data on existing financing models and strategies will be collected to facilitate the adoption of integrated climate solutions within these priority areas. Engaging informal financing sectors like cooperatives is crucial for attracting financing for smallholder farmers' investments in the priority thematic areas through integrated solutions.
With support from the NTI, the project will identify and analyze financial instruments that facilitate and accelerate investments in the priority thematic areas of solar irrigation, solar dryers, and agroforestry. Additionally, inputs will be provided to refine and develop government-led climate-friendly investment plans. An analysis of existing investment plans supporting the NDC implementation in priority sectors will be conducted, followed by data collection and identification of gaps to bridge for the development of value propositions and refined investment plans in the prioritized areas of climate-smart agriculture and clean energy. Multi-stakeholder consultation meetings will be conducted to ensure buy-in and ownership of the developed or refined investment plans for implementation.
Furthermore, the project will provide training and support for the development of bankable proposals for stakeholders in both state entities (Ministries, Departments, and Agencies) and non-state entities (civil society organizations, businesses). Concept notes will be developed to implement some elements of the integrated investment plan, and project developers will receive assistance in submitting proposals to national, regional, local, and global financial institutions.
