Support to Investment

AgrInvest training in Uganda

Greening the Uganda Development Bank’s agricultural lending portfolio
15/07/2020

In May, FAO launched a series of interactive online trainings to strengthen the Uganda Development Bank’s (UDB) knowledge of agriculture’s environmental impact, as well as its capacity to assess the greenhouse gas emissions and carbon balance of loan applications. 

UDB is keen to expand its agricultural lending portfolio. And it is leading the way in investing in businesses that have clear social and environmental impacts as part of their goals.

This commitment is evident in the Bank’s newly approved green finance strategy. The strategy envisions the creation of a green finance fund to consolidate and enlarge UDB’s investment portfolio of low-carbon risk investments by 2024.

FAO’s online trainings, part of the AgrInvest initiative in Uganda, are in line with this goal. The three-year initiative encourages private investments in Uganda’s agriculture and agribusiness sectors that contribute to achieving the Sustainable Development Goals.

Designed by the FAO Investment Centre, the initiative seeks to strengthen the Bank’s capacity on digital finance, pipeline building, environmental, climate and social risk management and impact assessment, among others.

The Bank is carrying out the initiative with technical and financial support from FAO and the European Union Delegation in Uganda.

UDB’s Managing Director Patricia Ojangole commended the timeliness of the trainings.

"At UDB, we have mainstreamed sustainability in both our strategy and operations. To date, agriculture and agro-industrialization make up a significant portion of our portfolio. This training has been conducted at the right time as it has enhanced the capacity of our staff with new knowledge and skills to address critical issues that face our business," she said. 

Assessing and accounting for greenhouse gas emissions

The first training focused on the use of two FAO-developed tools – the Ex-ante Carbon-Balance Tool (EX-ACT) and the Global Livestock Environmental Assessment Model-interactive (GLEAM-i).

EX-ACT is a free, open-source, Excel-based model that provides users with a consistent way to estimate and track the impact of agricultural, forestry and other land use investments and policies on greenhouse gas emissions.

It can be used to strengthen the capacities of national stakeholders to estimate and monitor emission reduction goals from a wide range of projects, and support policy-makers in integrating climate change mitigation objectives into national policies and international commitments (for example, nationally determined contributions).

GLEAM-i is an open and free online calculator that estimates greenhouse gas emissions from the livestock sector. It considers the life cycle of animal products, from production of inputs to farm gate.

By building a baseline, users can compare their project’s impact on greenhouse gas emissions, protein production and feed intake.

The tool can be used by government officials, project planners, producers and industry and civil society actors for low-carbon and resilient livestock development. It can also be used to prepare national greenhouse gas inventories.

Reagan Ojok, UDB’s Senior Monitoring and Evaluation Officer, said that both tools, which are globally accepted greenhouse gas accounting tools in the agriculture sector, “complement our efforts in assessing, tracking and measuring the socio-economic development impact of every project. They are the go-to tools, and I look forward to mainstreaming them in our ex-ante and ex-post assessments."

Strengthening capacities

The online trainings – ten in total, running from May to August – are geared toward senior UDB staff from key departments like Investment, Credit Risk, Finance and Business Operations, and Strategy and Corporate Affairs. Trainees use actual UDB cases to assess the environmental sustainability of approved loans.

Alexander Nsaba, UDB Investment Officer for agriculture, believes the trainings will put him “in a better position to advise investors on which climate mitigation measures they should take.”

Susan Meeme, UDB Senior Risk Officer, echoed that sentiment, adding that her goal was to “apply the content of the trainings to the assessment of project applications in relation to their environmental impacts and make informed recommendations to senior management”.

FAO’s Animal Production and Health Division, Agricultural Development Economics Division and Investment Centre are jointly delivering the online trainings. Şeyda Özkan and Katherine Jones are co-leading the trainings with support from Anne Mottet, Julien Vallet and Martin Maugustini.

The goal is to carry out the trainings in Uganda, once the situation permits, to help the participants fully master the tools – both to assess and account for emissions resulting from their lending and to accurately report on their emissions in line with government requirements.

Photo credit ©FAO/Anne Mottet