The Embassy of Denmark in Kampala has pledged $23.47 million (UGX91.5BN) to the United Nations Capital Development Fund (UNCDF) to support rural communities across Uganda in adapting to the impacts of climate change.
Over the next four years, the funds will enable local governments and communities to strengthen local economies through the UNCDF’s LoCAL+ programme. For the first time, this initiative will include a component to engage the private sector, unlocking new investment opportunities for locally led, green economic development.
This commitment builds on a previous four-year pledge of over $14 million by Denmark in 2022, which helped local governments invest in climate-resilient agriculture, flood protection, and infrastructure through the UNCDF Local Climate Adaptive Living Facility (LoCAL).
“Climate resilience is won or lost at the local level. Our DKK 150 million commitment to Uganda is a testament to our belief in locally led solutions by the countries and communities most exposed to climate change,” said H.E. Signe Winding Albjerg, Denmark’s Ambassador to Uganda.
She added: “Through the LoCAL+ programme, Denmark is proud to stand with Uganda to strengthen the very institutions and communities that are redefining what climate adaptation looks like. Together, we are ensuring that climate adaptation isn’t just a global promise, but a tangible reality for those on the frontlines of climate change.”
The new LoCAL+ approach includes a pilot framework to mobilize private sector capital for climate adaptation. By creating a pre-approved channel for market-based finance and conducting initial scoping studies, the programme aims to eventually deploy blended finance instruments, guarantees, and loans for green small and medium-sized enterprises.
“These funds from Denmark meet a critical need for investment in resilience-building at the community level, where climate impacts are most acutely experienced,” said Justine Audrain, Regional Coordinator for LoCAL+ at UNCDF. “We welcome Denmark’s commitment to scaling adaptation action by engaging the private sector alongside public grants.”
Omon Ukpoma-Olaiya, UNCDF’s Regional Investment Team Lead for East and Southern Africa, added: “Denmark’s support enables us not only to scale up our work in Uganda but also to pilot a model for unlocking private sector investment for adaptation and resilient economies across the region.”
LoCAL+ Programme
Launched by UNCDF in 2011 in Bhutan and Cambodia, the Local Climate Adaptive Living Facility has since supported hundreds of local governments across Africa, Asia, and the Pacific through Performance Based Climate Resilience Grants (PBCRGs). LoCAL+ now expands to include a market finance window, offering guarantees, loans, and tailored financial products to small and medium-sized enterprises and service providers in the green economy.
Scaling National Impact
The Danish contribution will expand climate-resilient investments to 32 districts, benefiting 5.3 million people by 2027. By 2028, LoCAL+ is expected to fund over 250 local projects, with average grant sizes increasing from $150,000 to $200,000 to support more durable and impactful infrastructure. The programme aligns with Uganda’s Nationally Determined Contribution (NDC), National Adaptation Plan (NAP), and National Climate Finance Strategy.
