Project summary:

The Green Finance Facility UN Joint Programme is pioneering an innovative financial mechanism that provides access to affordable finance for small and medium-sized enterprises (SMEs) and underserved households in North Macedonia. It aims to stimulate investments in renewable energy and energy efficiency to accelerate the adoption of green solutions, enhance innovation, reduce energy use while contributing to better air quality and combating climate change.

Activities:

The Green Finance Facility will support loans to households and SMEs to adopt renewable and efficient energy solutions. To encourage uptake of these loans, it will also offer technical assistance and performance-based payments to the borrowers. The loans will be distributed to households and businesses via local financial institutions (Fis), with priority given to women, single-parent households, as well as households receiving remittances or containing returning migrants.

To best serve both households and small and medium-sized businesses (SMEs), the Facility will use a slightly different structure for each. 

• For SMEs, the Facility provides a credit line to participating FIs, which on-lends to SMEs at a target Internal Rate of Return of 3% -5%. The loans are complemented with technical assistance (in total of US$ 3.9 million) and ex-post, performance-based payments (PBPs) of up to 10% (5% for energy efficiency and 10% for renewable energy and combination with energy efficiency) of the loan amount. 

• For households, the Facility will provide US$ 6.5 million in loans financed from participating FIs’ own capital, with an expected IRR of 5 - 6%. This will be complemented by PBPs equal to up to 30% of the loan amount.

   

Expected results:

• Up to 105 businesses will have access to loans and technical assistance for investment in renewable energy and energy efficiency solutions.

• Up to 650 underserved households will have access to loans and technical assistance for investment in renewable energy and energy efficiency solutions. 

• Increase of North Macedonia's renewable energy generation by 10.7 MW over four years.

• 80,000 tonnes of greenhouse gas emissions avoided and 86,000 MWh of energy savings.