Notwithstanding the well documented cost savings of RECP
measures, manufacturing companies, in particular small and medium sized enterprises, often report difficulties in mobilizing finance for identified investments. This has been due to many factors. For example, for many SMEs credit conditions deteriorated in the aftermath of the global crisis, exacerbating the effects of long-standing challenges, such as information asymmetries, lack of collateral and a higher credit risk for SMEs compared to large firms.
As part of the EU-funded project Greening Economies in the European Union’s Eastern Neighborhood (EaP GREEN) efforts have been made to explore possible ways to bridge the gap between RECP assessments and RECP investments and leverage funding for the transition towards a green economy. With support from the Development Bank of Austria a first EaP GREEN national roundtable on RECP financing in Georgia was organized on 24th March 2015 in Tbilisi. Representatives from financial institutions, business and government sectors who participated in the Roundtable discussed the business potential of RECP investments and identified practical ways forward for mobilizing financing for RECP investments in the country.
Following the workshop a number of follow-up activities were conducted in 2016-2017 with the
objective of enhancing the RECP financing in Georgia, including:
– A study by a local expert exploring existing funding mechanisms in the country which could be
potentially applied for financing RECP projects in SMEs;
– An in-depth techno-economic and environmental assessments of RECP options and pilot RECP
project proposals for 7 companies including financial analysis of the proposed investments;
– Consultations with the companies and local banks to finance and implement the proposed RECP
– A survey of SMEs participating in the RECP demonstration project to learn about the companies’
attitudes towards financing RECP activities.
Purpose of the workshop
A second Roundtable on RECP Financing in Georgian SMEs, that will be organized on 26 April, 2017 in Tbilisi, aims to address possible ways to bridge the gap between companies and financial institutions for financing and implementing RECP activities including adaptation and adoption of innovative RECP technologies.
In the first part of the workshop, representatives of the UNIDO-led EaP GREEN Demonstration Project will demonstrate the economic benefits and financial returns of the RECP pilot projects, discuss the opportunities for and barriers to financing RECP projects in Georgia, and identify ways to enhance RECP financing in Georgian SMEs.
The second part of the workshop will allow sharing experience and knowledge among the EU Eastern Neighborhood Countries about the barriers and opportunities for enhancing the financing of RECP (green) investments in the region.
The audience of the workshop will include representatives of the demonstration companies participating in the UNIDO project, international and local financial institutions, representatives of the ministries of economy and environment, project Steering Committee members, business associations, NGOs and academia. National Coordinators of the UNIDO RECP Demonstration Project and RECP experts from 6 beneficiary countries, national RECP experts from Georgia, representatives of UNIDO, and international donor organizations will participate in the workshop.
– What are the barriers for SME to apply for eco/green loans?
– Which international and national financial institutions, including commercial banks, provide
financing for RECP/green activities including energy efficiency projects;
– What type of projects are financed by the financial institutions;
– What are the loan conditions (interest rate, loan repayment period, collaterals, subsidies by
international financial institutions) offered to SMEs for green investments;
– What are the risks for companies to borrow money for green activities and for commercial
banks to provide funds?
– Which alternatives to bank lending are available to SMEs for green investments?
– What needs to be done to bridge the gap between SMEs and finance providers to up-scale the financing of RECP investments?
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