Development Finance Climate Action & Green Transition Skills & Employment

Due diligence of Ghanaian financial institutions for green credit line

Project Details






Ghana / Sub-Saharan Africa


Green Finance

Banking & SME Finance


Green Economy Financing

Due Diligence


Doris Bloniarz

KfW has partnered with the Ghanaian Ministry of Finance in establishing a green credit line for the refinancing of renewable energy and energy efficient (RE/EE) investments for MSMEs and households in Ghana. On behalf of KfW, IPC designed a potential green credit line structure based on Ghanaian green lending market demand and supply. With seven potential Ghanaian partner financial institutions identified, the Ministry of Finance and KfW again contracted IPC to select three institutions as potential implementing partners for the RE/EE credit line and to conduct their detailed institutional assessments.

Following this, IPC undertook a due diligence of each selected financial institution, analysing their strategy with regards to green finance, especially towards MSME and household clients, their (green) portfolios, profitability, risk management, staffing, target clientele and outreach, competitiveness, and—importantly—their existing ESG risk management.

IPC also defined business models needed for the sustainable refinancing of RE/EE investments, exploring the benefits and potential return on investment for end consumers, the availability of fitting RE/EE technologies and equipment, the possibility of standardising loan eligibility criteria, the capacity needs of the partner financial institutions, and the potential commercial viability of the proposed green credit line.

Following this, IPC designed a loan scheme that included the structure of loans for each of the financial institutions, including a proposed interest rate for refinancing, performance indicators, and a level of acceptable subsidy. IPC identified the roles and responsibilities of each stakeholder in the scheme (including KfW, Ministry of Finance, Bank of Ghana, Energy Commission, financial institutions), in particular with regards to supervision and financial and technical monitoring aspects. IPC also identified and recommended accompanying measures for the green credit line, such as proposing potential technical assistance needs tailored for each financial institution depending on their current market dynamic and internal capacities. IPC additionally recommended a simplified approach to measure CO2 emission savings achieved through the credit line.



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