Innovative Microfinance Boosts Climate Action in Latin America & the Carribean

13 January, 2016

An award-winning development program in Latin America and the Caribbean is helping companies and households in Latin America access clean energy, increase energy efficiency and adapt to climate change.

Many micro, small, or medium-sized enterprises in the region are presently not able to access funding for clean energy or energy efficiency technologies that can reduce energy costs and improve competitiveness. Finance for adaptation activities is also scarce.

The innovative EcoMicro progam, co-financed by the Multilateral Investment Fund and the Nordic Development Fund, is designed to build the capacity of the region’s microfinance institutions so that they have the appropriate tools and know-how to develop and offer green financial products that help clients address climate change. EcoMicro offers solutions not only for microfinance clients, but also for the institutions themselves. The USD 7 million program enables microfinance institutions to green their own operations and to reduce the vulnerability of their existing loan portfolios to climate change impacts.

Two microfinance institutions in Mexico and Peru, for example, are expected to mobilize an additional USD 5.9 million to provide clean energy and energy efficiency solutions for more than 5,000 micro, small and medium-sized enterprises in poor areas, enabling them to cut greenhouse gas emissions by up to 20%. More than 800 smallholder farmers in Bolivia, Nicaragua and the Dominican Republic are testing different models for adaptation financing. These models aim to help farmers maintain or increase their income in spite of climate change threats. In Bolivia, a US$1 million concessional loan from the Climate Investment Funds has been endorsed to scale-up the product and reach an additional 1,000 smallholder farmers.

To read more, and see the interview with Gregory Watson, a Senior Specialist with the Multilateral Investment Fund: click here!

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