Equity Bank bets on green financing to drive Uganda’s clean energy revolution

June 5, 2026 in Companies, Land & Agriculture by Editor

The lender is expanding renewable energy loans and Results-Based Financing programmes to help households, schools and businesses overcome the high upfront costs of solar and clean cooking technologies.

 

Equity Bank Uganda is ramping up its investment in renewable energy financing, positioning itself as a key player in Uganda’s transition towards cleaner and more affordable energy solutions as households and businesses seek alternatives to rising electricity costs and traditional fuels.

The lender says affordable financing remains one of the biggest barriers preventing wider adoption of solar energy systems, clean cooking technologies and other renewable energy solutions, despite growing awareness of their economic and environmental benefits.

Through a combination of specialized green loans, partnerships with renewable energy providers and innovative Results-Based Financing (RBF) programmes, the bank hopes to unlock broader access to clean energy across homes, schools, farms and small enterprises.

“Many Ugandans want solar systems, clean cookstoves and renewable energy solutions, but the initial costs remain too high for households and small businesses,” said Virginia Semakula, Equity Bank Uganda’s Head of Energy, Environment and Climate Change.

Uganda has made significant progress in expanding electricity access over the past decade, but millions of households, particularly in rural areas, still depend on charcoal, firewood and kerosene for cooking and lighting. These energy sources remain costly, environmentally damaging and pose health risks through indoor air pollution.

While government tax incentives have reduced the cost of importing solar equipment, financing remains a major obstacle for consumers unable to afford upfront installation costs.

Semakula argues that conventional lending structures are often poorly suited to renewable energy investments.

“We need more flexible financing with lower interest rates and longer repayment periods, especially for solar technologies. A 24-month repayment structure works much better for many customers,” she said.

To address the challenge, Equity Bank has introduced Equi-Green Loans and Green Enterprise Financing products targeting households, small businesses, agribusinesses, schools and institutions investing in renewable energy technologies.

Under the arrangement, renewable energy companies install the systems while the bank provides financing support to end users, allowing customers to spread costs over time.

The strategy aligns with growing efforts by governments, financial institutions and development partners across Africa to mobilise private sector financing for climate-resilient development and clean energy access.

A key component of Equity’s approach is Results-Based Financing, an increasingly popular funding mechanism in the development sector that links incentives to verified outcomes rather than projected activities.

Under the model, payments are only released after projects are independently verified and shown to be operational.

“Results-Based Financing is not about promises. The systems must first be installed, operational and verified by an independent third party before incentives are paid out,” Semakula explained.

Equity has implemented several such programmes in partnership with development organisations including GIZ-NDEF, supporting deployment of solar technologies and improved cooking systems in underserved communities.

According to the bank, the impact is already becoming visible.

Small businesses such as salons, retail shops and agro-processing enterprises are using solar energy to lower operating costs and reduce reliance on unreliable power supplies. Schools in off-grid districts have gained access to electricity, enabling evening study sessions and improving learning conditions.

“In some schools, electricity access changed everything. Students could study longer, enrollment increased and schools even recorded improved academic performance,” Semakula noted.

The bank also believes green financing is helping stimulate Uganda’s renewable energy market by attracting more service providers, increasing competition and creating jobs.

Despite concerns among some lenders that renewable energy projects carry repayment and technology risks, Equity says evidence from its programmes suggests otherwise.

“There has always been fear that customers may not repay or that the technologies may fail, but the results are showing otherwise. Customers are paying, and adoption is growing,” she said.

As Uganda pursues universal energy access and seeks to reduce pressure on forests from charcoal consumption, financial institutions are increasingly being viewed as critical enablers of the transition.

For Equity Bank, the goal is to make renewable energy financing as accessible as traditional consumer lending products.

“Clean energy is about better health, lower costs, improved education, stronger businesses and better livelihoods. That is the futur