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Finance Track 3: Financing Instruments for Green and Inclusive Industry


While many companies have recognized the great potential for environmental benefits and cost savings associated with sustainable manufacturing measures, they may face serious challenges in accessing financing to help them update their production methods.  This session will explore these challenges by bringing together representatives from industry and the banking sector to present their perspectives and identify strategies to improve collaborations between these two stakeholder groups.


What did we aim at?

  1. Highlight the access to finance challenges faced by medium sized manufacturing companies that would like to implement sustainable manufacturing measures.
  2. Share and inform about existing and planned (country specific and regional) financing instruments and solutions (such as technical assistance facilities) in response.
  3. Collect a list of (country specific or regional) recommendations for new financing instruments, support services, regulatory actions, etc. for overcoming access to finance challenges.



From left to right: Mazen Halawi (Central Bank of Lebanon), Rachid Nafti (TEST team leader Tunisia), Roberta De Palma (UNIDO), Miroslav Maly (EBRD), Khaled Masoud (Bank of Palestine)



Nait Brahim (TEST team leader Morocco) and Rachid Nafti (TEST team leader Tunisia) opened the session by sharing some experience from the field about challenges they have encountered regarding access to financing:


-       Banks don’t want to take risks on environmental projects.

-       If banks accept the risk of an environmental project, they ask for more guarantees.

-       Applying for financing is a long, difficult procedure with significant documentation.

-       Generally, banks ask for relatively high interest for environmental projects.


Some recommendations from the perspective of industry were also set forth:


-       There needs to be more flexibility in the bank’s credit policies.

-       Loans could be designed as an integrated package that includes training and technical assistance for SMEs.

-       It is also important to use financing to improve social conditions for workers.


“Banks need to evolve by considering sustainable development aspects in their lending criteria?- Rachid Nafti, TEST team leader Tunisia


Miroslav Maly of the European Bank for Reconstruction and Development (EBRD) Sustainable Energy Facility was the first representative from the financing sector to take the floor, and he began by sharing ERBD’s key operating principles:

-       Sound banking

-       Transition impact

-       Environmental sustainability


Miroslav reminded participants that EBRD had a 10-year track record of successful cooperation with the donor community that was instrumental in establishing the EBRD Sustainable Energy Financing Facility, and reconfirmed EBRD’s commitment to working more with countries on resource efficiency.


Mazen Halawi, Head of the Central Bank of Lebanon’s Subsidized Loans and Financing Program, then spoke about the Bank’s Green Initiatives, including National Energy Efficiency and Renewable Energy Action, energy loans for new construction and existing buildings, the Decentralized Renewable Energy Power Generation Project, as well as its recent EU loan that will be used to grant subsidized loans for finance energy projects for SMEs.


Download the presentation here.


Finally, Khaled Masoud, Assistant Head, SME Department, Bank of Palestine, introduced the Bank’s Green Loan Programme for households and businesses in Palestine, which consist of low interest loans for the installation of solar energy systems, waste treatment, recycling and energy efficiency initiatives. In an effort to reach more people and businesses, the Bank is expanding its presence in the field by visiting potential clients of the Green Loan Programme in their place of business.


During the discussions with participants that followed, a number of points were raised including:


-       EBRD could create a ‘one-stop shop’ for resource efficiency with technical assistance programmes coupled with low interest grants.

-       EBRD was asked about a possible collaboration with Jordan on the creation of a green grant programme.

-       Banks need to evolve the take into consideration sustainability in their evaluation criteria.



At the discussion, session participant stating that when green loans are too complicated, it drives people away.

Roberta De Palma, Chief Technical Adviser, Industrial Resource Efficiency Unit, Department of Environment at UNIDO, wrapped up the session, recalling that the core issue at hand was to demonstrate the business opportunities of green loans to central and private banks. To do this, efforts will need to be directed at building confidence in the business case for green loans and in creating a one-stop shop at banks that provide both technical and financial assistance on projects that promote sustainability.