Financial Institutions have been urged to prioritize financing sustainable and environmentally friendly projects in a bid to reverse the repercussions of climate change.
Experts are also urging the banking sector to expand financing projects that take into account the environmental component of society, especially in the agriculture value chain.
Henry Ssegawa, a financial expert with the Uganda Institute of Banking and Financial Services (UIBFS) says financial institutions have a huge role to play in helping to suppress the effects of climate change.
“We want banks to consider Environmental, the Social and Governance (ESG) aspects before they carry out their lending,” Ssegawa said during a capacity building workshop training in Ntungamo Municipality.
The aBi Finance sponsored Green Finance capacity building training are targeting staff of financial institutions to equip them with the much sought-after knowledge on green finance which is needed to deal with the climate change challenges that are threatening agribusiness and the financial services sector.
Ssegawa said that Climate Changes effects are already having a significant impact on the agricultural sector which is predominantly rain-fed and asked financial institutions including Savings Credit and Cooperative Societies (SACCOs) to play a critical role.
“We should consider sustainability which is the ability for people to get to live a good life while not compromising the ability of the future generation to enjoy their life. Let us let lend while inclining our products to conserve our environment,” Mr. Ssegawa added.
Experts say financial institutions play a pivotal role in helping investments and assets support the implementation of low-carbon, climate-resilient development pathways.
“That is why we are training Bankers first so that they can have knowledge on the adverse effects that climate change on the environment and in that way, they can encourage clients to take invest in projects that are harmless to the environment,” Victoria Adong, a Green Finance expert, said at separate training held in Tororo.
She added: “So, we have given creditors information that they will give out to clients, like how to mitigate effects of climate change like opting for irrigation during drought because if we don’t act now, the country will continue losing a lot of money to mitigate effects of climate change.”
Mr. Moses Bwire, Investments Manager – Green Growth and Business Development Services at aBi Finance said they have invested in UGX 124 billion to see that the project is a success.
“Green Financing is sustainability, we want to see that this money is lent to businesses that do not harm the environment, and through the training, we have been able to categorize which businesses harm the environment and which ones don’t harm the environment,” Mr. Bwire said.
Sam Nahasanga, one of the participants of the training said this training will help them know how to conserve the environment in their day-to-day businesses, so that even the other generations that will come, will be able to use the natural resources.
“In our day-to-day business we interact with many customers, we extend credit to them and we need to be conversant on the fact that even as we extend credit, we need to watch what they are going to do with the money so that we don’t end up contributing to the destruction of the environment,” Mr Nahasanga said.