A fund which seeks to enhance access to finance for climate and green oriented small-medium scale enterprises (SMEs) in Africa has been established by the Africa Guarantee Fund (AGF), a pan-African non-bank financial institution owned by the African Development Bank (AfDB).
The fund known as the Green Guarantee Facility is to enable financial institutions fund African SMEs which investments ensure sustainable growth and climate resilient development in African economies.
The Charge d’Affaires at AGF, Mr Germain K. Dodor, made this known when he addressed a press conference today in Accra to announce the Financing for Sustainable Development Conference. The event is scheduled to take place tomorrow in Accra.
The conference which is supported by International Trade Centre (ITC) and the Nordic Development Fund (NDF) seeks to expand access to finance for green growth-focused small and medium-sized enterprises (SMEs) in Africa.
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Objective of the facility
According to Mr Dodor, the Green Guarantee Facility, which was established with support from the NDF, had the potential to create employment across Africa through the SMEs accessing green financing.
He further explained that the facility was coupled with capacity development programme for both financial institutions and SMEs to build knowledge and capacity of banks in Africa in the green economy as well as help to mitigate the risk associated with financing climate friendly investment.
The establishment of the facility, he said was also inspired by the Paris Agreement which pushes for governments from around the world take climate change, saying that “contributing to the reduction of CO2 emissions is a shared responsibility”.
With the strong conviction that the engine of growth in Africa was the SME sector, Mr Dodor said he was certain that the facility would help to expand the pool of available financing to the SMEs.
The conference, he said, would be followed by a training workshop for selected staff from selected financial institutions on how to lever green finance and the AGF Green Guarantee Facility.
He said the conference would provide an important platform to discuss the funding of climate change mitigation and adaptation; climate conscious investments; the risk climate change poses to a financial institution’s portfolio; and the potential for climate change regulation to spur the development of new products and services for individuals and SMEs.
Additionally, Mr Dodor said there would also be discussions on the financial sector’s role in sustainable development and the need to make sustainability part of the organizational culture.
The African Guarantee Fund is a pan-African non-bank financial institution owned by the African Development Bank (AfDB), the Danish International Development Agency (DANIDA) and the Spanish Agency for International Development Cooperation (AECID).
AGF’s primary mandate is to assist financial institutions increase their financing to African Small and Medium Sized Enterprises (SMEs) through the provision of partial financial guarantees and capacity development assistance. — GB