EBRD, EU and GCF extend green financing to micro and small businesses in Jordan
The European Bank for Reconstruction and Development (EBRD) and Jordan’s Microfund for Women (MFW) have signed a US$ 2 million Green Economy Financing Facility (GEFF), including US$ 0.5 million of co-financing from the Green Climate Fund (GCF).
The GEFF funds will be on-lent to micro, small and medium-sized enterprises (MSMEs) in Jordan and will support the expansion of green lending to local businesses.
The facility is supported by the European Union (EU) under its Initiative for Financial Inclusion. It will also benefit from a €0.225 million grant available to the GEFF and provided by the EU via its Neighbourhood Investment Platform, for incentives to accelerate the adoption of climate adaptation and mitigation technologies and services by local MSMEs and households.
This partnership marks the first financing under the GEFF in Jordan and the first package offered to a microfinance institution (MFI) in the EBRD’s wider southern and eastern Mediterranean (SEMED) region under the GCF-GEFF regional framework.
Under this facility, MFW will also benefit from a comprehensive technical assistance (TC) package funded by EBRD, EU and GCF. The TC package will include an assessment of the optimal technology for better integrating climate change practices into the targeted MSMEs and households. Technical advice will be provided on how to implement the energy investments to be adopted. The package will also include sessions to raise awareness and build MFW’s capacity in relation to climate change mitigation, adaptation technologies and gender-responsive 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, for 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 the gradual yet positive increased 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 private shareholding MFI registered in Jordan. It was the first in the country and is the largest there in terms of the number of clients (31 per cent of market share) and of gross loan portfolio (27 per cent of market share), with total assets of US$ 124.7 million. MFW reached 134,812 clients in 2022, of which 96 per cent were women and 71.8 per cent lived outside of Amman, the capital city. MFW is known for its holistic approach, offering clients financial and non-financial services such as training, networking and marketing to help support them in their small and medium-sized business projects.
Since the EBRD started investing in Jordan in 2012, the Bank has provided more than €1.8 billion in financing through 64 projects in the country, including providing financial support to the Jordanian banking sector through MSME loans, subordinated debt and trade finance facilities.
Re-disseminated by The Wealth and Society