NDF - Financing for climate change and development projects

NDF is co-financing a partial guarantee facility for energy efficiency investments

15.04.2013

NDF partners with the Inter-American Development Bank for a partial guarantee facility for energy efficiency investments

NDF and the Inter-American Development Bank (IDB) have partnered for the $50 million Energy Efficiency Finance Facility to finance companies making investments in energy efficiency and self-supply renewable energy projects in Latin America and the Caribbean. The Facility will be supported by €7 million ($8.6 million) from the Nordic Development Fund (NDF) to mitigate risk of the Facility through the provision of partial guarantees to the IDB-financed subloans, which will range in size from $500,000 to $5 million. An additional €1 million ($1.3 million) from the NDF will provide technical assistance grants related to project identification and feasibility and engineering studies.

The Facility will address funding needs in the currently underserved sector of energy efficiency and small-scale renewable energy generation, where borrowers often encounter high risk premiums, high collateral requirements and inadequate tenors. The Facility will focus on projects with potential for high financial returns, including increasingly economical technologies such as smart-grid, advanced lighting and solar or biomass power.
The new facility aims to realize up to $100 million in climate friendly investment and continues the collaboration between IDB and  NDF, which over the past years has provided technical assistance funding for a variety of energy audits and small-scale energy projects for companies in Central America. For an enhanced leveraging effect, the NDF resources may be complemented by funding from other IDB-administered funds also aimed at incentivizing climate friendly investment, including the Sustainable Energy and Climate Change Initiative (SECCI) fund and the Canadian Climate Fund for the Private Sector in the Americas.

More info

IDB's press release