GCF and IDB agreements to help SMEs in Latin America invest in energy efficiency
21 January 2019 | Mitigation
The Green Climate Fund and the Inter-American Development Bank (IDB) recently signed funding agreements which will enable GCF to channel climate finance to 4 projects in Latin America.
The following projects are now ready to be implemented by the IDB:
- FP009 - GCF will provide a USD 20 million loan to the National Development Bank of El Salvador, which will help open a credit line to fund SMEs' energy efficiency projects in the country
- FP048 - In Guatemala and Mexico, GCF and IDB will set up a risk sharing facility that will unlock innovative financial instruments for micro, small and medium enterprises in the agricultural sector
- FP063 - To support SMEs in Paraguay and help them increase energy efficiency, GCF will provide USD 23 million in concessional financing. GCF will also assist the local government in developing the policy and regulatory framework to incentivise further energy efficiency investments in the country
- FP064 - A GCF loan of USD 100 million will support SMEs in Argentina investing in sustainable energy technologies, namely biomass, biogas, and energy efficiency. A separate grant will also help strengthen the capacities of financial institutions, SMEs and energy, and technology providers
"Increasing energy efficiency is at the very core of sustainable energy transition. Our partnership with IDB will enable small businesses in Latin America to access finance for energy efficiency projects, which are often perceived as too risky for SMEs," said Andreas Biermann, Deputy Director at the Division of Mitigation and Adaptation of GCF. "We are confident that these projects will build trust in the market and help attract further private sector investments," he added.
Amal-Lee Amin, Chief of the Climate Change and Sustainability Division at IDB said, "we are delighted that following the signing of these four Funding Activity Agreements with the Green Climate Fund we can start to execute these projects that will help promote energy efficiency in El Salvador and Paraguay, increase finance for renewable energy and energy efficiency in Argentina, and support low carbon agriculture in Guatemala and Mexico. This marks an important milestone in our partnership with the Green Climate Fund in support of Latin America and the Caribbean countries climate change commitments."
Latin America and the Caribbean is one of the core priority regions for the Fund. To date, GCF has approved 18 projects in 22 countries in the region, with a total GCF investment of USD 822 million.
Source: Green Climate Fund