Implementing EE loans for SMEs through FIs in Latin America
The mission of CAF, the Latin American Development Bank, is to stimulate sustainable development and regional integration by financing the public and private sectors in Latin America. CAF acts as a catalyst for sources of green and climate finance to promote the transition to a green and sustainable economy by means of the Programa Negocios Verdes y Eficiencia Energética. As part of this programme, and with support from KFW, CAF offers credit lines to Partner Financial Institutions (PFIs) to finance demand-side energy efficiency projects (EE-D) at SMEs in Latin America. CAF also provides hands-on operational support to FIs and their clients in implementing relevant investments.
To that end, CAF contracted in 2020 a consulting consortium led by IPC to support PFIs in the launch of EE loans in seven countries in Latin America* (Medida Complementaria para financiar EE-D en PYMEs a través de instituciones financieras). The project has a duration of 3 years.
- conducting market studies to identify market potential for EE-D finance
- identifying EE-D measures for SMEs in different sectors
- analysing and defining the baselines for the EE-D measures with the highest potential in the project countries, as well as the respective eligibility criteria to achieve minimum energy savings
- adopting, maintaining and implementing facility procedures and tools for PFIs participating in the programme
- establishing and maintaining the relationship between CAF and interested PFIs, as well as liaising with the local offices of CAF in the project countries
– conducting portfolio screenings to identify the business potential of green lending
– conducting institutional assessments of PFIs to provide focussed TA (e.g. training, credit design)
– developing targeted financial products (lean analysis processes, reporting)
– developing and implementing training and capacity building programmes for the PFI’s with regard to green lending practices and related eligible investments
– developing business strategies
– developing reporting systems to ensure accurate and efficient impact accounting of EE-D projects to CAF
– conducting reviews of the PFIs’ E&S systems