Green Finance Facility Launches in North Macedonia to Promote Renewable Energy and Energy Efficiency Investments

Green Finance Facility Launches in North Macedonia to Promote Renewable Energy and Energy Efficiency Investments

(IN BRIEF) A new Green Finance Facility (GFF), valued at €30 million, has been introduced in North Macedonia to provide small and medium-sized enterprises (SMEs) and creditworthy underserved individuals and households with loans for renewable energy and energy efficiency projects. These projects encompass technologies such as photovoltaics, heat pumps, inverters, solar panels, and efficient heating systems. The GFF offers performance-based incentives, including up to 10% of the loan for SMEs and 30% of the loan principal for target groups, which include female-headed households, single parents, people with disabilities, Roma communities, employees affected by Covid-19, remittance recipients, and returning migrants. This initiative not only supports the green transition but also aligns with the United Nations’ Sustainable Development Goals (SDGs) and aims to reduce energy consumption, greenhouse gas emissions, and improve air quality in North Macedonia. The GFF is set to run until April 2026 and involves collaboration between multiple stakeholders, including the government, UN agencies, international financial institutions, and local partner banks.

(PRESS RELEASE) LONDON, 10-Nov-2023 — /EuropaWire/ — New loan options with performance-based incentives will be available to small and medium-sized enterprises (SMEs) and creditworthy but underserved individuals and households from North Macedonia to finance their investments in renewable energy and energy efficiency solutions such as photovoltaics, heat pumps, inverters, solar panels and efficient heating systems.

The new Green Finance Facility (GFF), worth €30 million, was launched last week in Skopje, where representatives from the government of North Macedonia, the United Nations (UN) family, the European Bank for Reconstruction and Development (EBRD) and commercial banks from the country met to mark this significant milestone.

“Considering that all countries are dealing with many challenges, such as the post-Covid economic recovery and energy crisis, I believe that this project, with products aimed at SMEs and individuals from underserved groups, is an excellent opportunity to express our strong commitment to accelerating the implementation of the 2030 Agenda and achieving the Sustainable Development Goals,” said Fatmir Bytyqi, the Deputy Prime Minister for Economic Affairs in the Government of North Macedonia.

As part of the package the GFF will also provide performance-based payments of up to 10 per cent of the loan for SMEs, and 30 per cent performance-based payments of the loan principal for target groups. The target groups include female-headed households, single parents, households with people with disabilities, Roma, employees affected by Covid-19, remittance recipients and returning migrants.

More widely, the GFF will help cut energy consumption and greenhouse gas emissions and will contribute to cleaner air in North Macedonia

“The GFF aims to bring the benefits of green transition to SMEs and groups in society who are usually the last to join and benefit from the green transition,” explained Rossana Dudziak, UN Resident Coordinator in North Macedonia. “I hope GFF loans will make investments in renewable energy and energy efficiency easier and more affordable for businesses and homes.”

The programme is aligned with and supports the achievement of Sustainable Development Goals (SDGs) and the UN Sustainable Development Cooperation Framework (SDCF) targets.

“The EBRD is delighted that this strong partnership with the government of North Macedonia and the United Nations has enabled the launch of this new facility. It leverages our strong relationships with local financial institutions to expand the availability of green finance to the local SMEs,” commented Aleksandra Vukosavljevic, EBRD Director, Financial Institutions, Western Balkans and Eastern Europe.

The facility is scheduled to end by April 2026. Other local partner financial institutions are expected to take part in the GFF and further expand its availability in the country.

“Two years ago this project was just one of more than 150 proposals from over 100 countries worldwide that applied for co-funding from the UN Joint SDG Fund,” explained Armen Grigoryan, UNDP Resident Representative in North Macedonia. “Amid intense competition, the GFF was selected as one of 10 programmes globally recognised for its significant impact, investment readiness, and substantial co-financing leverage.”

Rania Sharshr, Director of Peace and Development Coordination at the International Organization for Migration (IOM), commented: “The implementation of this innovative climate solution includes government entities, UN agencies, an international financial institution, think tanks and private sector banks. It includes everyone. This model could be an example of partnership development that can scale up and replicate to other countries.”

During his video address, Dmitry Mariyasin, UNECE Deputy Executive Secretary, stated: “In our view, the focus of the project on SMEs is very important because they account for up to 60 per cent of carbon emissions globally, but often lack access to climate finance or transition finance. To ensure that countries get on a trajectory to net zero in time, we need to have SMEs on board and have financing, tools and technologies in place.”

The GFF is implemented by the United Nations Development Programme (UNDP), the IOM and the United Nations Economic Commission for Europe (UNECE), together with the EBRD as the partner international financial institution. It is financially supported by the Joint SDG Fund, with co-financing from the government of North Macedonia.

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SOURCE: EBRD