Farmers, enterprises, homeowners in Tajikistan are gaining new opportunities for access to climate finance through the Green Economy Financing Facility launched on November 21 in Dushanbe. The mechanism was created as part of the GEFF (Green Economy Financing Facility) project of the European Bank for Reconstruction and Development, which works in collaboration with the European Union, the Green Climate Fund and the Republic of Korea. The financing mechanism in the amount of 25 million dollars USA will provide financial, technical assistance, loans, as well as institutional grants to the private sector to promote sustainable development of the country. Loans will be provided for investments in high-performance technologies that improve the use of water, energy and land resources in Tajikistan through microfinance organizations that have joined the financing mechanism.
In its work, the mechanism will draw on the successful experience of its predecessors, such as the “ECTAP” program, which allowed expanding access to financing in the agricultural sector and “CLIMADAPT”, which carried out farmers’ projects to increase climate resilience. The new mechanism of the GEFF project will help enterprises, farmers and households to reduce energy costs, resources and increase competitiveness through the use of highly effective technologies and practices.
GEFF greatly simplifies and facilitates climate finance by providing a database of high-performance technologies. Interested private sector companies, farmers and private individuals will be able to choose the necessary technologies thanks to a special online tool called “technology selector”. This tool is available at www.ebrdgeff.com/tajikistan
Those green technologies that are not represented in the “selector” can also be supported by the mechanism during the technical consultations of the GEFF project. Among the acceptable technologies: solar panels and collectors, LED lighting, insulating materials, biomass boilers, energy-efficient household appliances, collecting and storing rainwater, modernizing equipment, agricultural machinery, intensive gardens, greenhouses, irrigation pipes and pumps, drip irrigation systems, agro-processing equipment and others.
The financing mechanism will go to meet the applicants and, if the project is successfully completed and verified, offer investment grants in the amount of 20% or 30% of the loan amount, which may pay off the applicants’ costs for paying interest on the loan. The combination of the grant and credit component will further expand opportunities for the private sector, small medium-sized businesses operating in the agricultural and agribusiness sectors. The mechanism will also support gender dimensions aimed at empowering women and men in access to financing green technologies.
Climate finance programs are successfully developing in Tajikistan. Now, microfinance organizations in the country, farmers can get green loans under the Adaptation and Mitigation of Climate Change in the Aral Sea Basin (CAMP4ASB) loans under ADB’s green finance access programs, EBRD, as well as multi-purpose consumer loans including a variety of energy and agricultural technologies. The emergence of a new mechanism for the GEFF project significantly expands the climate finance market in Tajikistan, providing farmers, small and medium-sized businesses more opportunities to adapt to climate change.