North Macedonia’s Green Financing Facility selected among top ten SDG blended finance instruments in the world, to receive funding from the Joint SDG Fund
15 February 2022
- The new Green Financing Facility will be launched in the summer 2022 and is expected to become fully operational by the end of the year
SKOPJE| 15 February 2022| Selected from a global pool of submissions coming from over 100 countries, North Macedonia’s joint programme for establishing a Green Financing Facility (GFF) was among a total of ten programmes considered as the most impactful, with greatest co-financing leverage and investment-ready by the Joint SDG Fund.
With the financial support from the Joint SDG Fund, this programme will set-up a new financial vehicle, that will provide access to affordable green financing for Small and Medium Size Enterprises (SMEs) and for individuals and households (including marketable but underserved individuals and households) for investments in renewable energy (RE) and energy efficiency (EE) solutions. With these investments, GFF will directly contribute to the reduction of greenhouse gas emissions and air pollution and strengthen the local ecosystem for RE & EE green finance.
The $7.9 million received from the Joint SDG Fund will help the establishment of the programme worth a combined $46.5M, including the anticipated co-funding coming from the partners involved (pending approval). To help the country in combating air pollution and climate change, in addition to the United Nations organizations involved (United Nations Development Programme - UNDP, United Nations Economic Commission for Europe - UNECE and the International Organisation for Migration - IOM) and the Government (represented by the Deputy Prime Minister of Economic Affairs, as well as the Ministry of Finance, Ministry of Economy and Ministry of Environment and Physical Planning), the programme will also bring together the European Bank for Reconstruction and Development (EBRD) and most of the private banks from the country .
Transitioning to a more sustainable energy mix through increased production of renewable energy (particularly solar) and energy efficient retrofitting of buildings and homes is a major strategic objective of the Government.
“The Green Financing Facility is the future of the finances and economic growth in achieving the green transition from modest to modern, resource-efficient and competitive economy. Our Government is already taking steps towards opening new alternatives for the economy where both citizens and businesses, have opportunities to achieve “green” and sustainable way of living and doing business”, Deputy Prime Minister Fatmir Bytiqy says. “We are dedicated to this goal and open for cooperation with other progressive partners in achieving this goal. This is one of the key aspects of the great success behind the Green Financing Facility, especially as a driver in the wider region of Southeast Europe.”
By developing and operationalizing a Green Financing Facility access to finance for SMEs and households, investments in renewable energy and energy efficiency will be significantly enhanced. This will bring a reduction in greenhouse gas emissions and air pollution. The programme is aligned to and supports the achievement of Sustainable Development Goals (SDGs) and the UN Sustainable Development Cooperation Framework (SDCF) targets. It will result in 70,068 MWh of annual energy savings, 80,510 tons of CO2-eq emissions avoided, and 10.7 MW in new renewable energy capacity. Furthermore, enabling access to affordable financing for renewable energy and energy efficiency solutions will contribute to advancements towards SDGs 7 and 13.
“Many countries are working on financial models to blend and leverage government and private sector funding. The United Nations is therefore very proud to contribute $7.9 million to the Green Financing Facility, which will do exactly that - bring together financing and expertise from the government, the banking sector in the country, one of the most experienced international financial institutions in this field – EBRD and the United Nations to renewable energy and energy efficiency”, says Rossana Dudziak, UN Resident Coordinator in North Macedonia.
Accelerating the energy (green) transition in each country requires significant financial investment, which can only be supplied if government, private and international sources of financing are put together, so that businesses and households can have access to affordable finance for these types of investments.
“Supporting the green transition is one of the top priorities for EBRD in North Macedonia. In recent years we have stepped up our support by promoting investments in energy efficiency and renewables and facilitating the decarbonisation of the country’s energy sector both directly and through our partner financial institutions. Over the last five years, we have provided more than EUR 70 million green financing to SMEs and households through the local banking system and with strong support by donors. These instruments have been very successful and have created a strong demand for green products” says Andi Aranitasi, Head of EBRD North Macedonia. “We are very glad that the UN and the Joint SDG Fund will, through their grant support, further enhance the infrastructure we have created on the market for the quick deployment of such attractive products. This will be the first ever cooperation between EBRD and the UN system of this nature and it is a great honour for us that North Macedonia will be the pilot country for this cooperation. We are confident that this project will be successful and will lead to extended cooperation with UN and Joint SDG Fund. EBRD looks forward to working together with the UN North Macedonia and the Government of North Macedonia on extending additional affordable financing for investments in green technologies to an even bigger number of Macedonian SMEs.”
The new Green Financing Facility will be launched in the summer 2022 and is expected to become fully operational by the end of the year.
The UN Joint SDG Fund is a multi-partner trust fund established by the United Nations General Assembly. The Fund supports UN member states by de-risking investments that drive financing solutions to accelerate achievement of the Sustainable Development Goals (SDGs). The goal of this fund is to disburse US$ 1 billion in grants annually in the race to 2030. All programmes share one critical element: their ability to leverage multi-million-dollar grants from the Joint SDG Fund into billions for sustainable development.