Promoting private sector investments in energy efficiency in the industrial sector (GCF-FP063)

Countries
  • Paraguay
Where the impacts of the investment may be experienced.
Financial Institutions
  • Green Climate Fund (GCF)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Approved
Bank Risk Rating
U
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Voting Date
Mar 1, 2018
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower
Government of Paraguay
The holder of the loan, grant, or other investment.
Sectors
  • Climate and Environment
  • Finance
  • Hydropower
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Grant, Loan
The categories of the bank investment: loan, grant, etc.
Investment Amount (USD)
$ 23.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Loan Amount (USD)
$ 20.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Grant Amount (USD)
$ 3.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Project Cost (USD)
$ 43.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please see updated project documentation for more information.
Primary Source

Original disclosure @ GCF website

Updated in EWS Jul 29, 2020


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Project Description

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

Investment Description
Financial Intermediary
Financial Intermediary: A commercial bank or financial institution that receives funds from a development bank. A financial intermediary then lends these funds to their clients (private actors) in the form of loans, bonds, guarantees and equity shares. Financial intermediaries include insurance, pension and equity funds. The direct financial relationship is between the development bank and the financial intermediary.

Contact Information

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: mnetto@iadb.org; +1 202-623-2009; 1300 New York Avenue NW, Washington DC 20577, USA

 

ACCESS TO INFORMATION

Requests for project information may be submitted using the IDP Request for Information by email to: disclosure@gcfund.org.

You can also submit an information request using this online form: https://www.greenclimate.fund/about/disclosure/form.  Additionally, if information requested is denied, an appeal can be filed to the Information Appeals Panel: iap@gcfund.org.  You can learn more about the Information Appeals Panel at: https://www.greenclimate.fund/about/disclosure/appeals.

 

ACCOUNTABILITY MECHANISM OF GREEN CLIMATE FUND 

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A brochure about the IRM can be accessed in English, French, Spanish, Portuguese, Arabic, Mandarin, Mongolian, Vietnamese, Russian, Ukrainian, Korean, German, and Kiswahili at: https://irm.greenclimate.fund/.