The Green for Growth Fund (GGF), a Luxembourg-based lender to projects deemed beneficial to the environment, recently disbursed two loans to nonprofit microfinance institutions (MFIs) in Bosnia and Herzegovina: one in the amount of EUR 5 million (USD 5.8 million) to Partner Microcredit Foundation (MCF) and the other in the amount of EUR 1 million (USD 1.2 million) to Mi-Bospo. The MFIs have agreed to use the funds to on-lend to households and microenterprises for projects that improve energy efficiency, such as upgrading building insulation and purchasing equipment that runs on renewable energy or consumes considerably less energy than conventional machinery. GGF expects the loans to generate total annual energy savings of 44,700 megawatt-hours and a reduction in carbon dioxide emissions of 13,800 metric tons per year.
Mi-Bospo CEO Nejira Nalic said, “with this support in the area of energy efficiency, our clients will improve their business and quality of life. We are glad to be able to use these credit funds to raise awareness of the advantages of energy efficiency, which will certainly have a positive impact on our clients and the environment in which they conduct their business activities.”
Created in 1997 by the US-based nonprofit Mercy Corps, Partner MCF provides microloans primarily to the agricultural sector and other rural enterprises via 60 branches. The MFI also lends for home improvement, solar energy collectors and other energy saving purchases. According to the US-based nonprofit Microfinance Information Exchange (MIX), Partner MCF had USD 69 million in assets, a gross loan portfolio of USD 60 million and 44,000 active borrowers as of 2016. The MFI does not accept deposits.
Mi-Bospo, which is headquartered in the city of Tuzla, provides business, housing and farming microloans, predominantly to women. The MFI does not accept deposits. As of 2017, Mi-Bospo has a network of 29 offices, mainly in the northeast part of the country. The nonprofit Bosnian Council for Aid, which also is known as Bospo, founded Mi-Bospo in 2000. As of December 2017, the MFI reported total assets of BAM 59 million (USD 36 million) and a gross loan portfolio of BAM 54 million (USD 33 million). The number of customers it serves is unavailable.
Created in 2009 by the EU’s European Investment Bank and Germany’s KfW Development Bank, GGF focuses on extending the use of renewable energy sources and enhancing energy efficiency in 19 countries in Southeast Europe, the Middle East and North Africa. GFF’s investor base is composed of donor agencies, international financial institutions and private investment funds including the Church of Sweden, the World Bank Group’s International Finance Corporation, the Netherlands-based development bank FMO and Germany’s GLS Gemeinschaftsbank eG. As of March 2018, GFF reported an investment portfolio of EUR 385 million (USD 474 million) outstanding to 49 enterprises in 19 countries. From its inception through March 2018, 31 percent of its loan disbursals have been deployed to households, 30 percent to service-based businesses and 22 percent to manufacturing companies.
By Nicholas Galimberti, Research Associate
Sources and Additional Resources
GFF press release, Mi-Bospo transaction
http://www.ggf.lu/pressnews/detail/ggf-partners-with-mi-bospo-to-encourage-energy-efficiency-in-bosnia-and-herzegovinas-microfinance-s/
GFF press release, Partner MCF transaction
http://www.ggf.lu/pressnews/detail/ggf-boosts-energy-efficiency-in-balkans-with-eur-5-million-investment-in-partner-mcf/
Mi-Bospo background
https://www.mi-bospo.org/index.php/en/o-nama
Mi-Bospo financials
https://www.mi-bospo.org/index.php/en/izvjestaji
Partner MCF background
https://www.partner.ba/o-nama
Partner MCF MIX profile
https://www.themix.org/mixmarket/profiles/partner
GFF background
http://www.ggf.lu/about-green-for-growth-fund/
GFF Q1 2018 factsheet
http://www.ggf.lu/fileadmin/user_upload/05_downloads/fact_sheets/English/GGF_Quarterly_Fact_Sheet_-_Q1_2018_Eng.pdf
MicroCapital Brief; May 23, 2017; Green for Growth Fund Loans $22m to UniCredit Bank Serbia for Renewable Energy Projects
https://www.microcapital.org/microcapital-brief-green-growth-fund-loans-22m-unicredit-bank-serbia-renewable-energy-projects/
MicroCapital Brief; August 4, 2017; EFSE Funding $2.3m in Microenterprise Loans in Bosnia and Herzegovina via Mi-Bospo, Half in Rural Areas
https://www.microcapital.org/microcapital-brief-efse-funding-2-3m-microenterprise-loans-bosnia-herzegovina-via-mi-bospo-half-rural-areas/
MicroCapital Brief; May 21, 2014; Partner Microcredit Foundation (PMCF) of Bosnia and Herzegovina Borrows $5.5m from Green for Growth Fund (GGF) for Energy Efficiency Financing
https://www.microcapital.org/microcapital-brief-partner-microcredit-foundation-pmcf-of-bosnia-and-herzegovina-borrows-5-5m-from-green-for-growth-fund-ggf-for-energy-efficiency-financing/
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