The LFI-U is an innovative approach being tested by UNCDF in cooperation with the Ministry of Local Government and the Uganda Investment Authority alongside the Third District Development Programme (DDPIII) with the aim of unlocking Uganda's financial system for local economic development ("LED"). The Inception Phase is in­tended to prepare key national and international stakeholders to support the launch and rollout of a long term phase of LFI and LED promotion in 2013.

The project will advance the preparatory work on the six pilot LFI infrastructure pro­jects that have already been initiated, namely Arua IPS Hydroelectric Generation Project, Busia Lorry Park, Nwoya De­light Fresh Juice Project, Kayunga Amfri Farms Fruit Processing Project, Kitgum Olam Warehouse Project and lnsingiro UCCCU Milk Processing Project. As a result, procedures and capacities for investing in economic infrastructure, services and amenities will be developed and activated in target local governments.

Secondly, the phase of the pilot will ad­vance the mobilisation of key national and international stakeholders, government and non-government alike, around LFI with the view to facilitate the launch of the main phase of LFI in 2013. This will include the launch of LED consulta­tion frameworks and a LFI training programme that improves government and private sector capacity for LED and local business-enabling environments.

LFI mobilization will include outreach to development partners for targeted LFI sup­port of the technical studies and credit enhancement needed to secure private finance for LED infrastructure projects, as well as possible direct equity investment. Also, efforts will be made to mobilise commitments from key national and international partners to allow the establishment of a US$ 20 million credit enhancement facility for the main phase of the programme.