Uganda is preparing to issue its first sovereign green bond as part of efforts to raise financing for environmentally sustainable investments.
The Ministry of Finance, Planning and Economic Development and the Bank of Uganda are developing a Sovereign Sustainable Finance Framework to guide the planned issuance, with technical support from the Global Green Growth Institute (GGGI).
The draft framework was validated last week during a technical workshop held at Serena Hotel Kigo, bringing together stakeholders from government, the financial sector, regulators and civil society.
The framework is intended to establish which investments qualify for financing through sustainable finance and thematic bond markets.
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It will also provide guidelines on how eligible projects will be selected and assessed, as well as how funds raised through the bonds will be managed, tracked and reported.
Uganda Bankers' Association Executive Director Wilbrod Owor said the development was an important milestone for the banking industry, which has an appetite to finance green investments but requires practical tools and structures to participate effectively.
"Capital is not just money. It is skills, knowledge, practice and information and it looks for cash flow, markets and the supporting infrastructure," Owor said.
The proposed framework is aligned with the International Capital Market Association's Green Bond Principles, a set of voluntary guidelines for issuing green bonds and promoting transparency around the use of proceeds.
Officials expect the framework to strengthen the capacity of financial institutions to participate in sustainable finance and thematic bond markets.
The framework builds on several existing government and regulatory initiatives, including the National Green Taxonomy, the National Climate Finance Strategy 2025-2030 and the Bank of Uganda's guidelines on climate-related financial risk management.
The workshop was attended by representatives from commercial banks, development finance institutions, pension funds, insurance companies, capital market intermediaries, financial sector regulators, government ministries and civil society organisations.
A sovereign green bond is a government-issued debt instrument whose proceeds are earmarked for eligible projects with environmental or climate-related benefits.
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For Uganda, the planned issuance is expected to create another avenue for financing investments linked to environmental sustainability while expanding the country's participation in sustainable capital markets.
