Building water infrastructure: Banks urged to offer affordable loans to dairy cooperatives

KAMPALA, December 15, 2025 — Officials from the Ministry of Water and Environment (MWE) and Heifer International have called on commercial banks and other financial institutions in Uganda to provide dairy cooperatives with affordable loans to enable them to invest in water infrastructure.

The appeal comes as Uganda’s dairy sector contributes about 6.5 percent directly to the country’s agricultural gross domestic product [GDP], underscoring the importance of reliable water systems for productivity and sector growth.

The call was made during the Water for Dairy Business Workshop organised recently by Heifer International at Onomo Hotel in Kampala. The discussions followed the successful pilot of the Water for Dairy Businesses [W4DB] project, implemented by Heifer International Uganda with support from Aqua for All.

The initiative adopts a market-based approach under which community water systems are installed, operated and sustainably managed by dairy cooperatives. Two pilot systems were established in Dwaniro and Muyenje in Kiboga district.

Eng. Joseph Wasswa, Principal Engineer and Production Manager for the Central Region in MWE, emphasised that water is not only a basic human right but also a critical driver of agricultural productivity, food security and economic transformation.

He challenged financial institutions to develop financing products that reflect the realities of dairy farmers. “Cooperatives have a responsibility to ensure that water systems are installed and properly maintained. Access to tailored water-financing products gives cooperatives an opportunity to develop and own their systems. If financial institutions align their products with the dairy value chain, solutions like those in Dwaniro and Muyenje can be scaled up easily,” he said.

Wasswa added that collaboration with financial institutions would enable dairy cooperatives to access water infrastructure in a structured and affordable manner, stressing the need to negotiate loan terms that offer reasonable interest rates.

He reaffirmed the ministry’s commitment to creating an enabling environment through supportive policies, regulations and partnerships aimed at reducing investment risks and improving access to finance.

He also reminded cooperatives of their responsibility to ensure the long-term operation and maintenance of installed systems.

In addition, he acknowledged the role of development partners in expanding access to water solutions for dairy cooperatives, noting that the Ministry of Water and Environment does not always have sufficient resources to meet all the water infrastructure needs of dairy farmers.

Meanwhile, Edna Nyamwaka, Project Manager at Heifer International Uganda, said the water systems installed in Dwaniro and Muyenje have significantly improved water quality for dairy operations. This, she noted, has reduced milk rejection rates, minimised income losses and enabled cooperatives to recover more revenue.

Nyamwaka also appealed to financial institutions to design affordable, farmer-friendly financial products that dairy cooperatives can use to scale up water solutions nationwide, replicating the success achieved in the Kiboga and Nakaseke districts.

In Uganda some of the commercial banks charge customers interest rates of over 20 percent, sometimes, depending on the sector where the project falls.

According to the Finance ministry’s Performance of the Economy Monthly Report October 2025, the weighted average lending rates for shilling-denominated credit eased marginally from 18.46 percent in August 2025 to 18.45 percent in September 2025.

https://thecooperator.news/nakaseke-dairy-farmers-harness-solar-energy-to-boost-production/

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