Overview:
The Embassy of Denmark in Kampala has committed USD 23.47 million (83.1 billion Shillings) to the United Nations Capital Development Fund (UNCDF) to help rural communities in Uganda adapt to the growing impacts of climate change.
The Embassy of Denmark in Kampala has committed USD 23.47 million (83.1 billion Shillings) to the United Nations Capital Development Fund (UNCDF) to help rural communities in Uganda adapt to the growing impacts of climate change.
Over the next four years, the funding will support local governments and communities across the country through UNCDF’s LoCAL+ programme, strengthening local economies while accelerating investments in climate resilience. For the first time, the programme will include a dedicated component to engage the private sector and unlock new investment for locally led green economic development.
This contribution builds on Denmark’s earlier four-year commitment of more than USD 14 million agreed in 2022, which included earmarked allocations for Uganda. That financing, channelled through the UNCDF Local Climate Adaptive Living Facility, supported a range of resilience-building initiatives, including flood protection measures, climate-resilient agriculture, and critical infrastructure.
“Climate resilience is won or lost at the local level. Our DKK 150 million commitment to Uganda reflects our belief in locally led solutions driven by countries and communities most exposed to climate change,” said Signe Winding Albjerg, Ambassador of Denmark to Uganda.
“Through the LoCAL+ programme, Denmark is proud to partner with Uganda in strengthening the institutions and communities redefining what climate adaptation looks like. This is partnership in action, delivering practical, life-changing solutions exactly where they matter most. Together, we are ensuring that climate adaptation becomes not just a global promise, but a tangible reality for those on the climate frontlines,” she added.
The new funding will also initiate a pilot phase for the enhanced LoCAL+ approach. This phase will establish a structural framework designed to attract private sector capital for locally led climate adaptation. By creating a pre-approved channel for market-based finance and conducting an initial scoping study, UNCDF aims to lay the groundwork for deploying instruments such as blended finance and guarantees to support green small and medium-sized enterprises.
“These funds from Denmark address a critical need for resilience investment at the community level, where climate change impacts are most acutely felt,” said Justine Audrain, Regional Coordinator for LoCAL+ at UNCDF.
Omon Ukpoma-Olaiya, UNCDF’s Regional Investment Team Lead for East and Southern Africa, welcomed Denmark’s decision to expand support to include private sector participation. “Denmark’s contribution not only enables us to scale up our work in Uganda, but also allows us to pilot a model for unlocking private sector investment in adaptation and resilient local economies, a model we hope to expand across the region,” Ukpoma-Olaiya said.
LoCAL+, the Local Climate Adaptive Living Facility, was designed and first implemented by UNCDF in 2011, with initial programmes launched in Bhutan and Cambodia. Since then, hundreds of local governments across Africa, Asia, and the Pacific have used its Performance-Based Climate Resilience Grants to address climate challenges, as outlined in ISO 14093 standards.
As the initiative evolves, UNCDF is expanding LoCAL+ to include a market finance window offering guarantees, loans, and other tailored financial products for businesses and service providers operating within the green economy.
In Uganda, LoCAL activities are also supported by the European Union, Belgium, and Ireland. Denmark’s latest contribution will significantly expand climate-resilient investments through Performance-Based Climate Resilience Grants and strengthen LoCAL+ as a key vehicle for channelling climate finance to local governments.
The programme aligns with Uganda’s Nationally Determined Contribution (NDC), National Adaptation Plan (NAP), and National Climate Finance Strategy.
The programme is expected to deliver climate-resilient investments benefiting approximately 5.3 million people across 32 districts. This expansion more than doubles the current trajectory, with activities set to grow from 14 to 32 districts by 2027.
By 2028, the funding is projected to support more than 250 cumulative local projects. The average grant size will increase from USD 150,000 (531 million Shillings) to USD 200,000 (708 million Shillings), enabling the development of more impactful and durable small-scale infrastructure.
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