MAINSTREAMING GREEN FINANCE IN MICROFINANCE INSTITUTIONS
Luxembourg, October 14, 2019 – The Green for Growth Fund gathered senior management representatives from partner microfinance-focused institutions and potential partners from across the regions it operates for a “Green for All” dialogue in Belgrade, Serbia. The theme centered on delivering green small-scale finance and how environmental sustainability can be fully integrated at an institutional level. The discussion included topics such as how to lead by example, and the challenges around building financial services and ecosystems to support households and small businesses in becoming greener.
Micro, small and medium enterprise focused financial institutions are an integral part of GGF’s operations as they provide approximately USD 230 million in loans to over half of all end-recipients of the GGF. Well-delivered microfinance has shown that it can facilitate the creation and growth of businesses, generate self-employment, improve livelihoods and extend education. But microfinance can also contribute to fighting climate change. This requires promoting green investments, providing supporting services and creating appropriate loan products at financial institutions, as well as raising awareness and integrating green lending principles into day to day practices.
GGF Chairman Olaf Zymelka stated: “The GGF believes that green investments can bring environmental benefits while providing positive outcomes to people on low incomes, smallholder farmers and micro entrepreneurs – the core clientele of microfinance providers. The benefits can be seen both on the business and on the private side e.g. by buying machinery that uses less energy and thus saves costs. That’s why we work to support microfinance institutions investing in green inclusive finance.”
The “Green for All” dialogue was the first of many GGF hosted events to come in the region, which will focus on promoting the uptake of green investments by microfinance institutions.
ABOUT THE GGF
The GGF helps reduce the use of energy and resources and prevent CO2 emissions. It pursues this goal by providing dedicated financing to businesses and households across 19 markets in the Southeast Europe Region including Turkey, the European Neighborhood Region-East, and the Middle East and North Africa. By using a blended finance structure and working through local partner institutions, the GGF is able to raise awareness and implement green finance activities. The fund combines its financial offering with tailored technical assistance that helps build capacity and which brings energy efficiency measures, renewable energy, and improved resource management toward the mainstream. In addition, by managing the environmental and social (E&S) risks associated with its investments, the fund sets standards for its partners and supports them to enhance their own E&S management systems, as required.
The GGF was initiated as a public-private partnership in December 2009 by Germany’s KfW Development Bank and the European Investment Bank, with financial support from the European Commission, the German Federal Ministry for Economic Cooperation and Development, the European Bank for Reconstruction and Development, and the Austrian Development Bank (OeEB). The fund’s growing investor base comprises donor agencies, international financial institutions and institutional private investors, including the International Finance Corporation, the Dutch development bank FMO, and the German ethical bank GLS. The GGF is advised by Finance in Motion GmbH. MACS Management & Consulting Services GmbH, Frankfurt am Main acts as the technical advisor.
ABOUT THE GGF TAF
The GGF Technical Assistance Facility plays a key role in supporting the fund’s promotion of energy efficiency, renewable energy and improved resource management by providing tailored advisory to the fund’s partners, which include financial institutions, project developers and key energy sector players, to produce synergy with investments of the fund.
The facility operates hand in hand with the GGF, complementing its investments with the following activities: capacity development of GGF partners; validation and monitoring of energy and resource savings and CO2 emission reductions; strategic advice based on research; increasing the awareness and acceptance of green solutions in the financial sector and among the public.
Managed by impact asset manager Finance in Motion, the facility operates independently from the fund, governed by a fiduciary arrangement under Luxembourg law. The Technical Assistance Facility Committee, which represents the initiators of the fund and donors of the facility, takes all strategic and technical decisions with respect to the facility and provides strategic guidance to the facility manager.
For more information see www.ggf.lu and follow us on Twitter @GreenGrowthFund
Media contact GGF
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Phone: +49 (0)69 271 035-171