EBRD, EU, and GCF Provide Green Finance to Jordanian Micro and Small Businesses
The European Bank for Reconstruction and Development (EBRD) and Jordan's Microfund for Women (MFW) have inked a US$ 2 million Green Economy Financing Facility (GEFF), including the Green Climate Fund (GCF) contributing US$ 0.5 million.
The GEFF funds will be on-lent to micro, small, and medium-sized enterprises (MSMEs) in Jordan and will facilitate the growth of green lending to local businesses.
The facility is supported by the Initiative for Financial Inclusion of the European Union (EU). It will also receive a grant of €0.225 million from the EU's Neighbourhood Investment Platform, made available to the GEFF, for incentives to promote the adoption of climate adaptation and mitigation technology and services by local MSMEs and households.
This cooperation is the first GEFF funding in Jordan and the first GCF-GEFF package offered to a microfinance institution (MFI) in the EBRD's broader southern and eastern Mediterranean (SEMED) region.
Under this facility, MFW will also get a comprehensive package of technical assistance (TC) supported by the EBRD, the EU, and the GCF. The TC package will include an evaluation of the appropriate technologies for better integrating climate change practices into the MSMEs and families that are the focus of the initiative.
Adopted energy investments will be implemented with the assistance of technical guidance. The package will include awareness-raising and capacity-building sessions about climate change mitigation, adaptation technologies, and gender-sensitive on-lending.
EBRD Director for the eastern Mediterranean region, Philip ter Woort, said:
“We are proud of our continued partnership with the Microfund for Women in Jordan and for the first time under the GCF-GEFF regional framework. We hope that our support will boost the competitiveness and innovation of women-led businesses and increase access to finance, resulting in more sustainable employment opportunities.”
The European Union Ambassador to Jordan, Maria Hadjitheodosiou, said:
“Through the Green Economy Financing Facility (GEFF), the Micro-Fund for women is offering today new financing opportunities to women and youth by supporting climate change actions. We also see this fund as an opportunity for Jordan to become a leader on these themes in the Arab region, where many countries have accelerated their efforts in addressing climate change and green transition but where sustainability remains a challenge.”
MFW’s CEO, Lama Zawati, said:
“We are always grateful for our partnership with the EBRD. The timing of this financing is crucial, especially after the major increase in fuel and gas prices locally and globally and when people are searching for cheaper and greener solutions. As MFW, we are proud to be the first in Jordan to offer green energy loans and are witnessing a gradual yet positive increase in interest in Jordan’s economy. Our clients are saving a lot on their electricity bills, and this is our ultimate goal. With the support of the EBRD in terms of training and awareness in many green energy fields, I am confident that we will reach more people in the coming years.”
MFW is a non-profit Jordanian MFI with private shareholdings. It was the first in the country and is the largest in terms of the number of clients (31% market share) and gross loan portfolio (27% market share) with total assets of $124.7 million.
In 2022, MFW served 134,812 clients, of which 96% were women, and 71.8% resided outside Amman, the capital city. MFW is noted for its holistic approach, providing clients with financial and non-financial services such as training, networking, and marketing to support their small and medium-sized business initiatives.
Since the EBRD began investing in Jordan in 2012, the bank has provided more than €1.8 billion in funding through 64 projects in the nation, including financial support for the Jordanian banking system via MSME loans, subordinated debt, and trade finance facilities.
Source: EBRD
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