Palladium, together with partners, Swisscontact, CABI, and Stanbic Uganda Holdings Limited, is implementing the Market Systems Development component of the Programme. It will be implemented and delivered through a market systems development approach that involves partnerships with the private sector. The objective is to support large-scale on-farm and off-farm job creation in the agri-business sector, aiming to improve productivity and/or incomes in agriculture. The component is focusing on innovative sustainable solutions for smallholder farmers especially women, refugees, and host communities to address the impacts of climate change and contribute to incomes and jobs.

This component consists of three sub-components:

Component 1A, which is a market systems development intervention, seeks to enhance climate resilience for over 130,000 Ugandan households via climate-smart agriculture. The sub-component aims to fortify communities against the impacts of climate change, fostering sustainable practices within the agricultural sector.

Component 1B, will run the "Uganda Climate Innovation Fund," aimed at fostering impactful change in Uganda’s climate resilience. This challenge fund will target innovative solutions, anticipated to revolutionalise the agricultural sector, thereby enhancing the nation's adaptability and mitigation strategies against climate change.

Component 1C empowers the private sector working in Northern Uganda to lead in land management through technical support, startup grants, and innovative practices, ensuring sustainable preservation and optimising ecosystem, while incentivising private sector engagement/investment in public goods and common pool resources.