KAMPALA: Uganda is pushing for a new approach to climate financing, calling on development partners to link debt relief to verifiable climate action rather than treating it as charity.
Joel Muhinda, Principal Economist and chair of the session on “Leading by example: member presentations on policy instruments” at the Global Deputies meeting of the Coalition of Finance Ministers for Climate Action, outlined a framework aimed at unlocking fiscal space for developing countries while promoting sustainable environmental policies.
“A flexible, case-by-case debt relief framework, supported by bilateral and multilateral partners, can preserve debt sustainability, maintain creditor confidence, and provide near-term fiscal space,” Muhinda said. “This approach signals good faith, aligns climate ambition with macro-fiscal realities, and closes the transition gap for countries moving toward low-carbon, resilient growth.”
The proposal comes at a time when many developing nations, including Uganda, face high debt servicing costs alongside increasing climate vulnerabilities such as floods, droughts, and extreme weather events that threaten infrastructure and agriculture. Muhinda emphasized that linking debt relief to climate action allows countries to pursue economic development without derailing fiscal stability.
“A wealthier, more productive Africa benefits the world,” he said. “Aligning debt management with climate action strengthens markets, reduces systemic risk, and supports global economic resilience.”
Muhinda’s call aligns with broader international debates on new forms of financing for climate-vulnerable nations, including debt-for-nature and debt-for-climate swaps, which exchange debt forgiveness or restructuring for measurable environmental commitments.
The Ugandan Ministry of Finance highlighted that such initiatives go beyond charity, framing climate financing as a strategic economic policy that drives structural transformation, increases productivity, and builds long-term resilience.
Uganda has already benefited from climate financing through programs like the Green Climate Fund (GCF) and the World Bank-supported Climate Smart Agricultural Transformation Project, which have funded emission reduction initiatives, sustainable agriculture, renewable energy projects, and early warning systems for extreme weather events.
Muhinda’s debt-for-climate proposal seeks to scale up such gains, ensuring that developing nations can meet their Nationally Determined Commitments (NDCs) while freeing up resources for economic growth and social development.
“This is not about aid; it’s about smart economic policy that benefits both creditors and climate-vulnerable countries,” he said.
