![[Uganda] Diamond Trust Bank, AFD ink deal to finance green energy projects](AFD.jpg)
[Uganda] Diamond Trust Bank, AFD ink deal to finance green energy projects
Diamond Trust Bank Uganda has inked a $9.7million credit agreement Agence Francaise de Development (AFD) that will see SMEs in the country receive soft loans for their green energy ventures.
The credit line has been availed to DTB for onward lending to businesses that wish to invest in renewable energy technologies projects like small hydro, biomass, biogas, solar, geothermal as well as energy efficiency measures. The committed amount may be increased in the future, once DTB exhausts this line and there is viable demand for financing of Green Energy Projects in Uganda.
The Green Energy Line of Credit which is one of the components of the large regional program called “SUNREF: Sustainable Use of Natural Resources and Energy Finance” in order to promote financing of renewable energy & energy efficiency projects in East Africa through local banking system. The credit line also comes with a technical assistance program, funded by the Africa Infrastructure Trust Fund of the European Union that is managed by Kenya Association of Manufacturers (KAM). This will help the bank improve its knowledge on lending to and involvement in sustainable energy projects.
In addition, Kenya Association of Manufactures will assist the projects sponsors on feasibility studies and technical support. SUNREF, on March 31st formally entered the Uganda Market after the Kenya Association of Manufacturers and Uganda Manufacturers Association (UMA) signed an accord to extend its program to the East African country. The Focal Point agreement between KAM and UMA allows the SUNREF East Africa program to have a focal point organization to drive its day-to-day activities in Uganda.
“This technical and financial offer is particularly important to bringing additional solutions to achieve the diversification of energy resources in East Africa and help the region to move towards sustainable energy solutions that are technically, economically and financially viable,” Yves Boudot, the regional director for AFD in East Africa said.
DTB is the first bank to participate in the AFD funded SUNREF program in Uganda. DTB’s parent bank in Kenya has also signed up for a similar $10 million facility with AFD. “This is an excellent opportunity for Ugandan entities to enhance energy efficiency and alternate energyopportunities for the overall economic development of Uganda at concessionary interest rates,” DTB Uganda Managing Director Mr Varghese Thambi said during the signing ceremony.
