The Inter-American Development Bank (IDB) received the first tranche of the financial contribution from the Green Climate Fund (GCF) this week.
Some of America's biggest firms have teamed up to make it easier for their contemporaries to purchase clean power (Credit: seagul/Pixabay)
The funds will be used to start implementation of the projects “Promoting risk mitigation instruments and finance for renewable energy and energy efficiency investments” in Argentina and “Promoting Private Sector Investments in Energy Efficiency in the Industrial Sector” in Paraguay.
Amal-Lee Amin, Climate Change Division Chief at IDB commented, “We are delighted to be moving to implementation of projects co-financed by the GCF. These resources will be instrumental to boost the renewable energy and energy efficiency markets in Argentina and Paraguay, as needed to translate into action objectives identified in their Nationally Determined Contributions to the Paris Agreement.”
Both projects are expected to have a transformational impact in increasing small and medium enterprises investments in renewable energy and energy efficiency, by providing access to medium and long-term finance; and finally contribute to the reduction of GHG emissions.
In Argentina significant potential for investments by SMEs in EE and RE has been identified, equivalent to more than US$2 billion, linked to modernization of equipment and substitution of energy sources using for example biomass and biogas.
Paraguay’s energy savings potential (accumulated over the period 2013-2040) resulting from the implementation of energy efficiency measures, is equivalent to four times the energy consumption of the country in 2013.
Both projects will apply the Energy Savings Insurance (ESI) model experience of IDB with NDBs, which has been piloted successfully in countries including Colombia and Mexico to address the financial and non-financial investment barriers to energy efficiency improvements.
“We are very pleased to have authorized the first disbursement to IDB for two projects in Argentina and Paraguay,” said Jerry Velasquez, Director of GCF’s Mitigation and Adaptation Division. “These projects will play an important role in transforming the approach of the financial sector in both countries, towards providing more green, sustainable finance to SMEs and renewable energy project developers.”
The projects intend also to scale up private investment channelling funds through National Development Banks, Banco de Inversión y Comercio Exterior (BICE) in Argentina and Agencia Financiera de Desarrollo (AFD) in Paraguay, transforming the local climate finance market in the long term.
Source: Company Press Release.