Luxembourg-EIB Climate Finance Platform Announces new investment of EUR 5 million in the Green for Growth Fund at COP24
- This inaugural investment enabled the Green for Growth Fund to harness private funding for greater energy savings and renewable energy in the Middle East and North Africa region
- Measures financed through the investment should result in annual primary energy savings of 200,000 MWh and CO2 emission reductions of 40,000 metric tons
During COP24 taking place in Katowice, Poland, Luxembourg-EIB Climate Finance Platform (LCFP) officially signed an investment of EUR 5 million to the Green for Growth Fund (GGF) to support the fund’s lending for energy efficiency, resource efficiency and renewable energy measures in the Middle East and North Africa (MENA) region. Serving as a risk cushion, this investment helped the fund to attract further private investors, thus enhancing its outreach and impact.
This operation was first committed at a ceremony held during COP 23, the 2017 UN Climate Change Conference in Bonn, Germany. Since then, GGF’s outstanding portfolio in the MENA region has grown stronger to over EUR 110 million spread across 14 partner institutions and has generated cumulative sub-loans of over EUR 60 million. This existing portfolio is yielding estimated annual primary energy savings of 460,000 MWh and CO2 emission reductions of around 90,000 metric tons. Part of the portfolio has been developed thanks to the planned Luxembourg-EIB Climate Finance Platform support, and it already exceeds the targets set at the time of the initial announcement in Bonn.
Founded in late 2016, the Luxembourg-EIB Climate Finance Platform aims to fund high-impact climate action projects with strong environmental and development benefits, thereby acting as a catalyst for additional financing. The platform contributes to Luxembourg’s international commitment to implement the Paris Agreement and is in line with the EIB’s Climate Strategy.
GGF Chairman Olaf Zymelka stated: “EIB being one of the initiators of GGF, has been a tremendous support throughout our journey and we are grateful to them and the Luxembourg government to choose GGF as the very first investment of this joint initiative. This new partnership will enhance our capacity to respond to the growing demand for energy and resource efficiency measures and the development of renewable energy in MENA, and we are eager to contribute further to a green future for the region.”
Jonathan Taylor, EIB Vice-President responsible for climate action and environment said: “The first pillar of EIB’s Climate Strategy focuses on reinforcing the impact of EIB climate financing. That’s why I am very pleased that following last year’s announcement at COP 23, we have now finalised our investment in the Green for Growth Fund (GGF). The EIB has played a key role in the development of the GGF, and remains one of the fund’s leading partners. We believe that this joint support under the Luxembourg-EIB Climate Finance Platform is an important signal of confidence in the fund’s potential going forward and we hope our commitment will attract additional finance from third parties, including from the private sector.
Pierre Gramegna, Luxembourg Minister of Finance, said: “For Luxembourg, being an important financial centre, unlocking private finance is a key objective. Luxembourg is thus very pleased to partner with the EIB on the Green For Growth Fund.”
About the EIB
The European Investment Bank (EIB) is the long-term lending institution of the European Union and is owned by the EU Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals both in Europe and beyond. The European Investment Bank is active in around 160 countries. It is the world’s largest multilateral financier of climate-related investment with USD 100 billion committed for climate action in the five years up to 2020 in support of the Paris Agreement. The EIB has committed at least 25% of its investments to climate change mitigation and adaptation, rising to 35% in developing countries by 2020. With EUR 19.4 billion dedicated to climate action in 2017, the EIB exceeded its target for the eighth year running.
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About the GGF
The Green for Growth Fund invests in measures designed to cut energy use and CO2 emissions and improve resource efficiency in 19 markets across Southeast Europe, the Caucasus, Ukraine, Moldova, the Middle East and North Africa. The fund provides financing to local partners that on-lend to enterprises and private households, and it invests directly, primarily through the contribution of senior debt, in renewable energy projects. The GGF’s Technical Assistance Facility maximizes the fund’s investment impact through support for capacity building at local financial institutions and partners.
The GGF was initiated as a public-private partnership in December 2009 by Germany’s KfW Development Bank and the European Investment Bank, with financial support from the European Commission, the German Federal Ministry for Economic Cooperation and Development, the European Bank for Reconstruction and Development, and the Austrian development bank OeEB. The fund’s growing investor base comprises donor agencies, international financial institutions and institutional private investors, including the International Finance Corporation, the Dutch development bank FMO, the German ethical bank GLS, Church of Sweden, and ASN Bank. The GGF is advised by Finance in Motion GmbH. MACS Management & Consulting Services GmbH, Frankfurt am Main acts as the technical advisor.