Project detail - GREEN FOR GROWTH FUND, SOUTHEAST

Who is our client

Green for Growth Fund ("GGF") is a structured debt fund with EUR 578 million committed capital, managed by Finance in Motion ("FiM"). It is the first specialized fund to advance energy effiency (EE), renewable energy (RE) and resource efficiency (REff) in Southeast Europe (incl. Turkey), the European Neighborhood Region-East, and the Middle East and North Africa (MENA). GGF is an innovative public-private partnership established to reduce energy consumption and CO2 emissions. GGF provides refinancing to financial institutions to enhance their participation in the EE and RE sectors and also makes direct investments in non-financial institutions with projects in these areas. The activities of GGF are supported by a technical assistance facility.

Funding objective

This FMO-A loan (EUR 20 million in USD equivalent - across 2 facilities) aims to achieve a 20% reduction in energy or resource consumption and/or a 20% in CO2 emissions through two core activities. Firstly, by refinancing bank and non-bank financial institutions to support their on-lending to households, business, municipalities and public sector for EE, REff and RE measures or projects. The second activity is providing direct financing to non-financial institutions that meet GGF's energy saving and/or emissions targets and comply with the technical criteria and GGF exclusion list.

Why we fund this project

Firstly, GGF’s and FMO’s strategy go hand in hand aiming to reduce GHG-emissions. GGF is additional to FMO’s green offering, as the Fund has the expertise and capacity to develop/cultivate a green market. GGF's financing results in a broader financing base of EE and RE investments in the target regions, increased awareness of EE, REff and RE products among companies and private households. This will open up a green market for FMO to tap into. Secondly, close cooperation with GGF offers FMO significant opportunities to learn from the Fund’s green line expertise. In addition, FMO's investment will be important for the Fund to attract commercial investors investing in GGF's Note-program. Beyond GGF, FMO considers the investment as a confirmation of the good relationship we have with FiM. FMO has also invested in several other funds managed by FiM, being EFSE, SANAD and the ECO Business Fund.

Environmental and social rationale

GGF is catagorized as Category B in terms of the level of risk within the sectors it engages and the level of IFC Triggered Transactions within the portfolio. GGF’s E&S categorization is aligned with IFC PS and EU legislation.

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