Opinion: How to fund Ugandan e-mobility

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Uganda’s government faces a Ush 50 billion ($13 million) shortfall for the 2025/26 financial year to fund electric mobility projects. In this week’s opinion piece, Philemon Okillong, a research analyst at Makerere University, explains that the country should access climate finance to fund its electric mobility ambitions through international and local lobbying.  

• Mr Okillong suggests securing funds from international institutions such as the Green Climate Fund and Climate Investment Funds, complemented by regional funders such as the African Development Bank.

• Domestically, the government can issue its own green bonds to support EV infrastructure, while local e-mobility players can tap carbon markets to monetise emission reductions.  

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By Okillong Philemon
Kampala streets tell a troubling story of Uganda's transportation crisis. The city ranks among Africa's most polluted urban centres with toxic emissions from mostly aging vehicles. There is, therefore, an urgent need for a transition to electric mobility. The path forward requires innovative financing solutions to turn ambitious goals into reality. Recent data paints a stark picture of Uganda's transportation challenges. With over 10 percent of national greenhouse gas emissions stemming from the transport sector, the country has earned the dubious distinction of being Africa's 10th most polluted nation. The root cause lies in Uganda's dependence on imported end-of-life vehicles, which average more than 16 years old at first registration, creating a perfect storm of inefficiency and environmental degradation. The human cost of this crisis is staggering.

The human and economic toll of pollution
According to the 2019 Global Alliance on Health and Pollution report, approximately 13,000 Ugandans lose their lives annually to pollution-related illnesses. The economic burden is equally severe, as the nation's growing appetite for imported fuel strains its foreign exchange reserves and widens an already concerning trade deficit. However, hope lies in electric mobility, which offers a comprehensive solution to these interconnected challenges. The government's National E-Mobility Strategy sets ambitious targets: a complete transition to electric public transport and motorcycles by 2030, followed by full passenger vehicle electrification by 2040. Yet, these goals face a significant obstacle: funding. The Ministry of Science, Technology, and Innovation currently faces a Ush 50 billion funding gap for the 2025/26 financial year.

Unlocking green financing opportunities
This shortfall threatens to derail Uganda's e-mobility aspirations unless innovative financing solutions are implemented. Green financing, particularly through international climate funds, presents a viable pathway forward. International institutions such as the Green Climate Fund, Global Environment Facility, and Climate Investment Funds offer substantial resources for low-carbon transport initiatives. To access these funds, Uganda must align its transportation policies with global climate objectives and develop compelling project proposals that dem onstrate both environmental and economic benefits. The African Development Bank and World Bank's green bonds represent another promising avenue for financing. These instruments could fund critical infrastructure development, from expanding charging networks to supporting electric vehicle manufacturing.

Charting a sustainable path forward
Success in accessing these resources, however, requires establishing a transparent regulatory framework that both encourages investment and ensures accountability. Domestic solutions also show promise. The government could issue its own green bonds to fund large-scale electric vehicle infrastructure projects. Additionally, private sector participants in e-mobility initiatives could benefit from carbon credit markets, monetising their emissions reductions through sales to high-emission industries seeking offsets. Challenges remain. High initial costs, limited awareness, and infrastructure gaps continue to impede progress.

To address these barriers, the government must leverage international climate finance mechanisms to provide flexible loans and direct subsidies for electric vehicle manufacture, battery production, and charging infrastructure development. Uganda must act decisively to secure green financing for its electric mobility transition. By effectively combining international climate finance, government green bonds, and private sector investment, the nation can accelerate its journey toward a cleaner, more efficient transportation system. The potential rewards – improved public health, reduced environmental impact, and economic growth – make this transition not just desirable but essential for Uganda's future.

This opinion article was first published in the Daily Monitor