Development Finance Climate Action & Green Transition Skills & Employment

Study: Energy efficiency finance for MSMEs in Armenia

IPC was contracted by KfW to assess the potential for a new joint programme sponsored by the German-Armenian Fund (GAF) and German Financial Cooperation (GFC) aimed at expanding MSME access to finance for EE measures. The main objective of the study was to analyse whether there is sufficient market potential as well as suitable conditions for the target segment. IPC subsequently developed financing programme concepts to address the needs identified. The study consisted of both desk review and on-site data collection and interviews.

IPC’s experts implemented the following tasks:

  • conducting an in-depth analysis and assessment of: the willingness to invest and the need to replace old technology or expand production capacity in relevant MSME sub-sectors; potential EE-related investment measures for MSMEs; typical investments for MSMEs; potential positive and negative effects of the proposed programme; potential need for technical assistance to MSMEs
  • analysing the MSME finance market and estimating the potential for EE investments in MSMEs by taking stock of: the available MSME financial products (terms and conditions), drivers and constraints for FIs to engage in MSME and EE finance, and existing EE and MSME finance programmes offering subsidies and other benefits
  • reviewing similar projects implemented by international development partners as well as GAF’s and KfW’s internal rules and regulations with regard to cooperation with partner financial institutions (PFIs) in comparable programmes, with the aim of developing a concept for possible areas of GFC support, including recommendations on financial structure, design of potential loan products for EE-related MSME investments (incentives and/or combination with government and subsidy initiatives), mitigation measures for major risks, PFI selection criteria and indicators to measure the success of the proposed programme
  • drafting the study report and presenting the results to KfW


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