CAF and KfW Foster Energy Efficiency Financing in Latin America
Through the webinar: Green Financing: Opportunities and Response to Challenges — CAF’s Energy Efficiency Credit Line for financial institutions in Uruguay and Paraguay, both institutions discussed the scope, objectives and implications of the technical assistance they are developing jointly for public and private banking in Paraguay, Uruguay and other countries in the region.
As part of the project “Design of Actions for the Complementary Measure for Financing of Demand-side Energy Efficiency through Financial Institutions” promoted by CAF and KFW, held a webinar on November 12 and 13 entitled Green Financing: Opportunities and Response to Challenges - CAF Energy Efficiency Credit Line for Financial Institutions in Uruguay and Paraguay with the main objective of discussing the scope, objectives and implications of the technical assistance that the project will offer public and private banking in both countries.
The project is carried out by a team of executives from the Institutional Financial Resources Directorate (DRFI), under the Vice President of Finance, the Financial Development Directorate and the Sustainability, Inclusion and Climate Change Directorate at CAF. It is set to be gradually implemented in seven countries in the region, namely Bolivia, Colombia, Ecuador, Panama, Paraguay, Peru, and Uruguay. The project will be carried out over the next three years in these countries, through technical assistance implemented by the IPC-Deuman consortium.
During the event, CAF representative in Paraguay Joel Branski stressed the importance of the project in both countries: “If a financial institution is interested in tapping the green credit market for Energy Efficiency, they have the opportunity to leverage this technical assistance, as it will surely help strengthen internal capacities to develop green portfolios in a scenario of greater influx of funds for the creation of a low-carbon, climate-resilient economy.”
In the webinar held with Uruguay’s financial institutions, KfW Energy Technical Advisor Christoph Tagwerker noted: “For KfW, driving green economic revival in countries of the region is of vital importance.” In this regard, the draft Complementary Measure for Financial Institutions seeks pragmatic mechanisms to address the urgent need to promote credits for energy efficiency, and to build technical capacities of these financial institutions in order to identify eligible investments. This is all the more challenging when targeting small and medium-sized enterprises (SMEs) in each country.
This set of actions will help CAF advance the development of the Demand-based Energy Efficiency Program and Green Business with Financial Institutions, whose main objective is to encourage greater investment of Latin American companies in Green Financing.
The funds of this initiative come from KfW, upon instruction of the German Ministry for Economic Cooperation and Development (BMZ) to manage the funds. Furthermore, CAF is responsible for the proper implementation and execution of these funds. To this end, it has hired consultants specialized in green financing.
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