Uganda’s energy transition is gaining fresh momentum after Absa Bank Uganda and the Uganda Energy Credit Capitalisation Company (UECCC) struck a Shs 11.085 billion concessional financing deal aimed at accelerating access to affordable clean energy solutions across the country.
The facility, anchored under the Government’s Electricity Access Scale-Up Project, is designed to unlock financing for solar home systems, institutional solar installations, productive-use equipment for small businesses, and clean cooking technologies.
It arrives at a critical moment for Uganda’s energy sector, where progress in generation has not fully translated into access on the ground. Although installed electricity capacity has grown to over 2,000 megawatts, national electrification remains uneven, averaging about 60 per cent, with rural access still significantly lower at 42.4 per cent compared to 76.4 per cent in urban areas.
Behind the numbers lies a deeper challenge. High connection costs, limited grid reach, and constrained access to off-grid financing continue to slow adoption, leaving more than 90 per cent of households dependent on firewood and charcoal, with rising economic and environmental costs.
The new partnership seeks to change that trajectory by addressing one of the sector’s most persistent bottlenecks, affordable financing.
Under the arrangement, UECCC will provide concessional capital to Absa Bank Uganda, which will on-lend to approved energy service companies such as Greenlight Planet Uganda Limited. These firms will in turn finance the deployment of clean energy products at scale, backed by improved liquidity and working capital support.
The three-year facility will be disbursed in performance-based tranches, with lending capped at 15 per cent per annum. The structure is intended to lower the cost of capital, improve affordability for end users, and keep private sector participation commercially viable.
Absa Bank Uganda Managing Director David Wandera said the deal reflects the bank’s shift toward financing solutions that respond to both market needs and climate realities.
“This partnership enables us to support clients transitioning to clean energy through more accessible, well-structured financing solutions. By combining concessional capital with our lending expertise, we can better manage climate-related risks while unlocking opportunities in underserved sectors,” Wandera said.
He noted that Absa is deliberately expanding its sustainable finance portfolio, positioning itself to channel capital toward low-carbon growth and long-term economic resilience.
UECCC Managing Director Roy Nyamutale Baguma said the partnership is a key step in mobilising private capital into Uganda’s renewable energy space.
“By working with Absa Bank Uganda, we are able to channel concessional funding through the banking system, enabling energy companies to scale while ensuring financing remains accessible and anchored in strong environmental and social standards,” he said.
Beyond household energy access, the facility is expected to unlock broader economic effects, from improving SME productivity to expanding markets for clean energy providers and strengthening the wider energy value chain.
More significantly, the deal signals a shift in how Uganda is financing development, with blended finance structures increasingly used to de-risk sectors that have traditionally struggled to attract private investment at scale.
For Absa, the partnership marks more than a funding arrangement. It is a strategic bet on the future of sustainable finance in Uganda, where banking is increasingly being tied to environmental outcomes.
As clean energy demand rises, the message from this deal is clear. The transition is no longer just about infrastructure expansion. It is about who finances it, how it is financed, and how quickly capital can reach the people who need it most.
