EU, Denmark offer UGX66 bn to Ugandan farmers

Business Edge Reporter 2nd May, 2024 Agriculture
EU, Denmark offer UGX66 bn to Ugandan farmers

The European Union (EU) and Denmark have announced funding amounting to more than UGX66 billion in a bid to boost agricultural productivity and help Ugandan farmers to withstand the challenges associated with climate change.

The funds are to be channeled through the Agricultural Business Initiative (aBi) Development, formerly ABi Trust, which was jointly founded by the Governments of Uganda and Denmark in 2010 as a social enterprise that channels development funding to agribusinesses and agriculture in Uganda.

aBi Finance, its business arm, provides lines of credit to micro-finance institutions for on-lending to small-holder farmers and agribusinesses, as well as an agriculture loan guarantee scheme for the micro-finance institutions.

  • A press release issued on May 2 indicated that over a period of five years (2023-2028), aBi Development would receive UGX35.6 billion from Denmark and an additional UGX20.2 billion from the EU to support green and inclusive growth initiatives in Uganda's agri-food systems.

Additionally, aBi Finance would receive UGX11 billion from Denmark to help accelerate the adoption of green and inclusive finance for climate change adaptation, mitigation and biodiversity conservation across the country.

Over time, these small agricultural finance and insurance initiatives have helped to improve access to credit, savings, insurance, and other financial services for smallholder farmers and agribusinesses.

  • This helps small-holder farmers to invest in inputs, equipment, and technologies to increase productivity and manage risks associated with weather, pests, and market volatility.
EU, Denmark offer UGX66 bn to Ugandan farmersA happy aBi Finance beneficiary.

"There is a strong and urgent need to support Uganda's agriculture to increase productivity and adapt and respond to climate change. Denmark is proud to continue more than ten years of support to Ugandan agriculture through aBi Finance and aBi Development. We are very happy to do this as a Team Europe Initiative in collaboration with the EU Delegation," said Signe Winding Albjerg, the Danish Ambassador to Uganda.

The 'Team Europe Initiative' is a collaborative effort between the EU and its member States to pool resources and coordinate actions in support of partner developing countries, aimed at addressing pressing challenges such as climate resilience, to promote sustainable development, and foster stability and prosperity.

According to the EU, Uganda agriculture needs to boost its productivity and to help it withstand the challenges of change and the two projects would help boost incomes and yields, and enable farmers to withstand droughts, floods and changing seasons.

"Building on more than ten years of partnership, the two projects will support more than 200,000 farmers to increase their yields and adapt to climate change. The projects will introduce innovations such as drought-resistant seeds, enhanced irrigation systems, and improved post-harvest processes," the press release said.

  • "The ambition is to mobilise funding and catalyse private sector participation through market systems development and linkages."
  • Jan Sadek, the EU Ambassador to Uganda, express delight at strengthening jobs and incomes in agriculture through the Team Europe Initiative.

"Many farmers and processors have already benefitted from the support from aBi Development, but the need is only growing larger. I am Particularly happy to see aBi Development take the lead in promoting compliance with the EU Deforestation Regulation. This is necessary for farmers and forests alike," he said.

Felix Okoboi, the Board chairperson of aBi Development, said they proud that the EU and Denmark had chosen to show their confidence in aBi Development's ability to deliver on climate and agriculture.

"This long term engagement is what Uganda needs to meet the climate challenge and boost the agricultural sector," he added.

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