Uganda's central bank has warned that climate regulations must not unnecessarily restrict access to credit, as the Bank of Uganda signed a cooperation agreement with the European Investment Bank to strengthen the financial sector's ability to manage climate-related risks. Bank of Uganda Deputy Governor Prof. Augustus Nuwagaba said on Wednesday that the country needed a financial system capable of understanding emerging risks, allocating capital effectively and continuing to support productive activities. "We must strengthen resilience without unnecessarily constraining access to finance," Nuwagaba said during the signing ceremony. "Our objective is a financial system that understands emerging risks, allocates capital effectively and continues to finance productive activity."
The agreement with EIB Global, the European Investment Bank Group's international development arm, will provide technical assistance to help the Bank of Uganda strengthen climate-risk supervision, improve disclosure and reporting by financial institutions, and develop a roadmap for greening the financial sector. The support will also help Uganda implement the National Green Taxonomy, which was launched in 2025 to define economic activities considered environmentally sustainable. Beyond the central bank, the programme will support selected commercial banks to improve climate-risk management and develop policies that can expand lending to green projects, with Housing Finance Bank the first Ugandan commercial lender expected to benefit.
The partnership reflects Uganda's broader climate ambitions. The country is seeking to mobilise $28.1 billion for climate action by 2030, with climate change increasingly recognised as a threat to macroeconomic stability and the financial system. EIB Vice-President Marco Primorac said strengthening the financial sector's ability to identify and manage climate risks would help banks finance environmentally sustainable investments with greater confidence. "Banks can't manage a risk they can't see," Primorac said. The programme is financed by Germany and Luxembourg in coordination with the NDC Partnership, a coalition working to advance the Paris Agreement on climate change.
Uganda joins other countries receiving support under the programme, including Kenya, Rwanda, Nigeria and Ethiopia. Nuwagaba noted that achieving the right balance would require cooperation across sectors, technical expertise, reliable information and sustained implementation. For borrowers and businesses, this means regulators will attempt to maintain credit availability even as they introduce climate safeguards for the financial system.