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Clean energy promotion through microfinance in Ethiopia


Titre : Clean energy promotion through microfinance in Ethiopia

Pays : Ethiopia

Date : Agreement Signed : 5 November 2014 — Duration : 42 Months

Ref : NDF 62 B 1

The objective of the project was to promote inclusive green growth by stimulating private sector business development within the renewable energy and financial sectors. The project aimed to increase access to reliable and affordable clean energy technologies (CET) for low-income households and microenterprises in Ethiopia, contribute to the reduction of GHG emissions through improved energy efficiency and introduction of sustainable energy sources, and to raise living standards.

The project initiated an innovative and replicable mechanism to finance clean energy technologies (CET) for households and small and middle size enterprises (SMEs) through a microcredit financing mechanism. During the project, a business concept was established for three Ethiopian microfinance institutions (MFIs), with a total of more than 200,000 existing clients. The business concept can be extended to other MFIs in Ethiopia as well as to other developing markets with similar needs, creating a potential customer base of tens of millions of people. The project developed the entire supply chain for high-quality, clean energy technologies for low-income markets. The actual technologies were selected during the project implementation and it was found that customers are most willing to pay for solar home systems and pico PV lamps. The project trained the microfinance institutions and clean energy technology providers in the execution of the new credit mechanism. In addition, the project studied ways to utilize innovative financing instruments to co-finance CET, facilitate scale-up of the business mechanism and contribute to achieving the targets of the country’s NAMAs and NAPAs.

Nordic Partner : Gaia Consulting Oy
Local Partners : Buusaa Gonofaa Microfinance SC, Harbu Micro Finance Institution Share Company, Specialized Financial & Promotional Institution (SFPI) and Swan Management Plc
Other Partners : MicroEnergy International GmbH

Total Project Cost : EUR 535,979
NCF Financing : EUR 325,900

Nordic Development Fund

Page publiée le 18 juillet 2020