Centre d'investissement de la FAO

FAO enhances capacity of the Uganda Development Bank:

Training in the application of GHG accounting and climate analysis tools for agri-lending

Knowledge of agriculture’s environmental impact, as well the capacity to assess the greenhouse gas emissions (GHG) and carbon balance of loan applications is one of the important skills agri-finance institutions need to have while appraising potential clients.

Since May 2020, FAO with co-financing from the European Union (EU), has been strengthening the capacity of the Uganda Development Bank (UDB) to assess the impact of agricultural loan applications on the environment through measuring greenhouse gas emissions. This has been done through online training, and most recently through physical trainings.

Together with UDB, FAO’s technical team organized a field mission to clients financed by the Bank to operationalize the tools, improve explanations, generate discussion and solve complex field situations that could arise. The FAO experts offered technical support during data collection and assessed the impact of the investments on the environment using the data collection tools (paper and digital form).

Important information was gathered as input data or information for use in the Global Livestock Environmental Assessment Model-interactive (GLEAM-i) and Ex-ante carbon balance tool (EX-ACT) tools to guide computation of GHG emissions, identify activities resulting in emissions and guide structuring of mitigation and adaptation strategies for the project appraisal, as well as key decision making  for financing.

GLEAM-i is an open and free online calculator that estimates greenhouse gas emissions from the livestock sector. It considers the entire life cycle of animal products, from production of inputs to farm gate, and is based on the International Panel on Climate Change (IPCC) Tier 2 methodology.

EX-ACT is a free 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.

“As a development bank, it is important for us to invest in projects that have positive impacts on the environment. With a national target to reduce emissions to 22% by 2030, UDB has a huge contribution to make to a low carbon economy. The EX-ACT, GLEAM-i and Earth Map tools will be very important for us to assess projects and make the right decisions that deliver not only socio-economic impact but also environmental sustainability,” noted Pius Wamala,  Senior Green Finance Officer at the Uganda Development Bank.

Earth Map is an innovative, free and open-source tool developed by FAO in the framework of the FAO – Google partnership. It was created to support countries to monitor their land in an easy, integrated and multi-temporal manner. The tool allows everyone to visualize, process and analyze satellite imagery and global datasets on climate, vegetation, fires, biodiversity, geo-social and other topics. Users need no prior knowledge of remote sensing or Geographical Information Systems.

“The EX-ACT and GLEAM-i tools help to identify synergies and trade-offs between the planned activities and ensure that UDB projects, while pursuing their socio-economic goals also maximize climate change mitigation outcomes. Often small, non-costly changes in agricultural practices can generate important environmental benefits,” said Joanna Ilicic, Economist from FAO’s Agrifood Economics Division.

“For example, GLEAM-i will estimate the changes in GHG emissions from improving animal health and feed quality on the farm, and EX-ACT will provide a carbon balance on all types of land-uses, using output from GLEAM-i for livestock. Integrating these tools in UDB’s project approval cycle will ensure the opportunities for creating such benefits can be fully seized,” said Anne Mottet, Livestock Development Officer of FAO’s Animal Production and Health Division.

Part of this joint exercise led by UDB was to understand the historical and current dynamics of the farm as well as the climate risks, where the farms are Georeferenced and linked with Earth Map data. This information outlines several crucial factors on land productivity in the current and recent past. 

“As part of the climate analysis, Earth Map tools was used to identify climate hazards and climate exposure. We confirmed this information in the field and discussed with the Bank and the farm officials to identify viable measures to incorporate into the investors’ business plan to address the prevailing climatic impacts,” said Olivier Lasbouygues, Climate Change Specialist at FAO Investment Centre.

FAO’s technical assistance will continue with a series of follow-up assessments to ensure that UDB staff fully master the tools – both to assess and account for emissions resulting from their lending and to accurately report their emissions in accordance with government requirements.

Photo credit (C)FAO