Inclusive Markets for Energy Efficiency in Uganda Phase II (IMEU-II) Market Development Fund

Inclusive Markets for Energy Efficiency in Uganda Phase II (IMEU-II) Market Development Fund is sponsored by Inclusive Markets for Energy Efficiency in Uganda (IMEU-II). IMEU-II offers catalytic funding, results-based financing, and technical assistance to de-risk energy efficiency projects in Uganda, targeting agroprocessors, social institutions, and businesses.

Uganda is projected to be one of the fastest-growing economies in sub-Saharan Africa. With an increasing population, rising urbanisation and industrialisation, energy demand from industrial, commercial, social institutions, and households is growing, supported by an energy supply mix that is highly dependent on hydropower and biomass.

This raises concerns about the reliability of the existing energy infrastructure and environmental sustainability. In addition, Small and Medium Enterprises (SMEs), social Institutions, and households rely on inefficient biomass and electrical appliances and practices for cooking, lighting, heating, cooling and other productive use services.

Inefficient use not only increases energy demand but also increases affordability, environmental, and climate change challenges. Energy efficiency and conservation, alongside other alternative renewable energy sources, offer greater potential and opportunities for energy security, affordability, and sustainability.

While the potential for energy efficiency is promising, the barriers, ranging from perceived high costs of EE technologies, limited availability of EE technologies, weak EE policies and regulations, and limited awareness of EE, remain significant to sustainable growth. These barriers have limited investment in and adoption of energy efficient technologies and services among SMEs, social institutions, and households.

IMEU-II is a strategic initiative designed to catalyse Uganda’s energy efficiency market by scaling investments and the adoption of energy efficient technologies and practices that support increased energy-use productivity, competitiveness, household resilience, and the mitigation of climate change emissions.

Building on lessons learnt from phase I, this programme applies a sector-wide development and triple helix approach, engaging government, academia, and the industry to address persistent barriers to energy efficiency. To strengthen supply and increase access to energy efficient technologies and services, IMEU-II is implementing a Market Development Fund as a de-risking facility.

This fund is deployed through three mechanisms: results-based financing, catalytic grants and technical assistance. The fund aims to de-risk Energy Service Provider Companies (ESPCs), SMEs, agribusinesses, and social institutions in Uganda.

## Market Development Fund The Market Development Fund (MDF) is a derisking facility designed to address barriers to the availability, accessibility, and affordability of energy efficient technologies and services for households, social institutions, and SMEs. This facility will leverage additional private and public financing for investments in energy efficiency (Debt, equity, etc.).

### Technical Assistance (TA) Expert support for project preparation, capacity building, and market intelligence to ensure project feasibility and long-term viability. Risk-mitigation capital designed to unlock private sector investment by de-risking innovative energy projects and pilot programs.

### Results-Based Financing Performance-linked incentives paid upon verified delivery of energy solutions and pre-defined sustainability milestones. Agricultural value chains in coffee, tea, maize, dairy, horticulture (fruits & vegetables), and oilseeds (sunflower and soybeans). Schools, rehabilitation centres, recreation facilities, and hospitals.

Energy Service Provider Companies (ESPCs). ## Ready to de-risk your investment in energy efficient technologies? Apply to the IMEU-II Market Development Fund for innovative financing to accelerate your transition.