Volume 10 | May 2018
NEWS BULLETIN
Taking Stock and Moving Forward...
What Can Past EcoMicro Projects Teach Us About The Future?
As the saying goes, if you don't know where you came from, you won't know where you're going!

Having kicked off the EcoMicro project design in the Caribbean - thanks to contributions from Global Affairs Canada - we’re taking this advice to heart with 15 past EcoMicro projects across Latin America from which to learn. For climate change adaptation, this included 7 projects in 6 countries; meanwhile, for climate change mitigation, this included 8 projects in 7 countries.

In our March newsletter, we featured the detailed experience of one of our adaptation projects in the Dominican Republic . In April, we described lessons learned from a mitigation project in Mexico. But taken altogether, what did these 15 projects do? Most importantly, what can they teach us about financing climate mitigation and adaptation technologies for low-income households, MSMEs, and smallholder farmers throughout the Region? Check out our snapshots below to learn more. 
Growth in Green Finance Brings Opportunities 
Responsible investors ranging from major international financial institutions to smaller funds and banks today increasingly see green finance as an important way forward – not least due to widespread global concern about issues such as climate change. “There’s an ongoing shift in the finance industry towards greener operations, and rapidly expanding global green finance represents a huge opportunity for economies and businesses in low-income countries,” says NDF’s Managing Director Pasi Hellman. 

Hellman believes that this trend helps NDF to build productive partnerships with co-financiers. “All NDF projects can clearly be classified as green finance, because every initiative we support must have demonstrable impacts in terms of mitigating or adapting to climate change,” he explains.

NDF has recently diversified its forms of financing, adding concessional loans and equity to traditional co-financing grants. “We feel our role is to use public funds flexibly to support innovative projects in ways that can catalyse action and leverage additional financing, especially from the private sector,” says Hellman.

“All NDF projects can clearly be classified as green finance.”

NDF seeks out initiatives that can be upscalable, replicable and soon self-sustaining. “One stumbling block is that investors and banks sometimes see green projects in low-income countries as risky – so we strive to use public funds to de-risk such operations and demonstrate that they can be good commercial opportunities,” says Hellman.

Hellman cites several ongoing initiatives illustrating the increasing diversity of green finance provided by NDF, including the Green Guarantee Facility for African SMEs, launched under the auspices of the African Guarantee Fund in 2016, and the PROADAPT programme, managed by the Inter-American Development Bank (IDB) , which aims to build climate resilience into micro, small and medium-sized enterprises and local communities in Latin America.

NDF’s new involvement in the revamped Energy and Environment Partnership Programme of Southern and East Africa will add a further complementary dimension to this support. During 2017 NDF sponsored three high level conferences on green finance in Africa together with the African Guarantee Fund and the International Trade Centre. A similar meeting is planned for Abidjan in March 2018.

“Development finance organisations like NDF can help on the demand side of green finance as well as the supply side – by supporting capacity development, training, awareness-raising, early stage financing and project development for businesses targeting climate-resilient growth, clean energy and climate adaptation; while also offering diverse financial products on the supply side,” he adds.
Extending our Horizons: Assessing Credit Risk and Opportunity in a Changing Climate
Through their lending activities, including corporate portfolios, banks can play the most influential and impactful role in catalyzing the transition to a low-carbon economy. This requires organizations to adopt a forward-looking, scenario-based approach to climate impact assessments, extending their horizons decades into the future.

Focusing on the transition-related exposures of banks’ corporate loan portfolios, this Report synthesizes the efforts of a Working Group of sixteen international banks convened by the UN Environment Finance Initiative (UNEP FI) to develop a methodology for assessing the risks and opportunities associated with the transition to a low-carbon economy (the "transition-related" impacts associated with climate change). Read the full document here .
EcoMicro partners with  Financial Institutions  to create Green Finance Products that build resilience of Micro, Small and Medium Enterprises (MSMEs) and low income households to Climate Change. This is an innovative approach to developing products that  facilitate access to sustainable, low-cost energy or adaptation technologies  for MSMEs and low-income households.
EcoMicro is a Technical Cooperation Program by the Inter-American Development Bank’s Multilateral Investment Fund (MIF), co-financed by Global Affairs Canada, the MIF and Nordic Development Fund. The Global Affairs Canada contribution supports The EcoMicro Caribbean Program .
Inter-American Development Bank | Multilateral Investment Fund (MIF) | (246) 627-8500 ecomicro@fomin.org | www.ecomicro.org