Program to boost access to clean energy, energy efficiency technology and adaptation products to micro, small and medium-sized companies in Latin America and the Caribbean
The Multilateral Investment Fund (MIF), a member of the IDB Group, is partnering with the Nordic Development Fund (NDF) to launch a pioneering $7 million program to pilot green microfinance products for both mitigation and adaptation to climate change in Latin America and the Caribbean.
The four-year project, known as the “Ecomicro Program,” is the first to pilot microfinance products related to climate change products and businesses in the region and it will be implemented regionwide. The program will provide training to microfinance institutions to develop sustainable green finance instruments; adjust their risk management models to include climate change risk; and incorporate climate impact into their internal policies and operations.
By providing the tools and know-how to these institutions, the program seeks to increase access to clean energy, energy efficiency technology and adaptation products to micro, small and medium-sized companies.
“The program is designed to address a dearth of climate change mitigation and adaptation finance directly targeted at smaller private sector actors.” said Gregory Watson, MIF's project team leader. “Microfinance institutions are extremely well-positioned to leverage their networks, clients and reputation to provide financing for clean technologies. They have proven to be successful at adopting new financial products that were initially perceived as complex and unprofitable.”
The program comes as many Latin American and Caribbean countries are establishing favorable policies toward clean energy installations and CO2 emission reductions and demand for such technologies has began to trickle down to small firms.
The MIF’s long track record in conducting innovative pilot projects with microfinance institutions in the region as well as its ability to disseminate lessons learned and replicate successful experiences has made it one of the most important institutions to foster the development of clean technology markets and adaptation finance tools for micro, small and medium-sized enterprises in the region.
For NDF, the project offers a unique opportunity to disseminate lessons learned not only among partners in this program but also between other NDF-financed programs operating between the public and private sectors. “NDF’s participation in the program through an experienced partner like MIF leverages this opportunity effectively”, states Leena Klossner, Deputy Director of NDF.
About the Multilateral Investment Fund
Established in 1993, as part of the Inter-American Development Bank (IDB) Group, the Multilateral Investment Fund (MIF) was created to develop effective approaches to support economic growth and poverty reduction through private sector-led development in support of micro, small and medium-sized enterprises (MSMEs) benefitting the poor—their businesses, their farms, and their households.
About the Nordic Development Fund
NDF is a multilateral financing institution established by the Nordic countries Denmark, Finland, Iceland, Norway and Sweden. NDF provides financing for climate change related interventions in low-income countries in cooperation with other financing institutions.