GCF's project description: In Paraguay, micro, small and medium-sized enterprises (henceforth SMEs for simplicity) have an inadequate access to medium and long-term finance to narrow technology gaps and boost productivity and growth. This inadequate financing access, coupled with the limited transmission network to access sources of affordable and readily available hydroelectricity, has restricted SMEs in key energy consuming sectors to develop energy efficiency investments projects, including: (i) the exchange of old equipment with new efficient equipment that reduces use of firewood, biomass and other fossil fuels ; (ii) the exchange of old equipment with new efficient equipment that replaces use of firewood, biomass and other fossil fuels by electricity from hydropower; and (iii) the retrofit of equipment with new efficient equipment that that reduces use of firewood, biomass and other fossil fuels. 2. Access to these investments1 could reduce energy consumption from non-renewable energy source, mainly biomass, and reduce greenhouse emissions by about 4 million tCO2eq over the project’s lifetime, in addition to promoting increased SME productivity gains. GCF reimbursable funding will help increase medium and long-term financing for energy efficiency (EE) projects in SMEs by supporting the structuring of financing mechanisms and instruments and improve local financial institutions (LFIs) and SMEs’ local technical capacity and knowledge on EE investments. Thus, GCF funding will increase energy efficiency in the SMEs industrial sector, with reduced GHG emissions through diminished demand of non-sustainable biomass and other fossil fuel energy sources. 3. GCF funding will be channeled through a sovereign-guaranteed loan from the Inter-American Development Bank (IDB), according to its own policies and procedures, to the Agencia Financiera de Desarrollo (AFD), a second-tier national development bank (NDB). The GCF reimbursable resources, which will be maintained in a dedicated account, will be blended with AFD’s own resources in order to provide a concessional line of financing available to first-tier local financial institutions (LFIs) so that they can, in turn, offer financing at adequate terms and conditions to SME firms interested in adopting eligible EE measures. And will support the Energy Ministry in enhancing the execution of its policies and legislation aimed at reducing the use of fuel wood and promoting the uptake of standards and technologies to ensure an efficient and sustainable use of biomass
For more information about this project, contact:
Gloria Visconti, Climate Change Lead Specialist: GLORIAV@iadb.org; +1 202-623-3390; 1300 New York Avenue NW, Washington DC 20577, USA
Maria Netto, Lead Capital Markets and Financial Institutions Specialist: firstname.lastname@example.org; +1 202-623-2009; 1300 New York Avenue NW, Washington DC 20577, USA
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