Environmental & social risk capacity building in East Africa

From 2014 until 2020, we successfully implemented the EUR 10 million “Technical Assistance Programme to various EIB Financial Sector Operations in East and Central Africa”.

An essential part of the project was the promotion of the European Investment Bank’s (EIB) environmental and social risk management (ESRM) principles by screening allocation requests for compliance and eligibility, promoting client protection principles, and providing specialized trainings and capacity building interventions. 22 trainings and six capacity building activities were organized on the topic of ESRM, for 557 bank staff of 13 financial institutions.

The trainings on ESRM included in-depth reviews of incorporating specific standards, such as the EIB’s and

International Finance Corporation’s Environmental and Social Sustainability Performance Standards, to help mitigate environmental and social risks. In the workshops we focused on building awareness about the strategic and commercial relevance of environmental and social issues and risks for the banks and their clients. Interactive exercises, drawing on experience from the banks’ business operations, focused on simulating how to practically implement ESRM policies and procedures, from both a client relationship and project investment perspective. The objectives were among others to enable the bank staff to engage proactively with clients, with regard to environmental and social risks and opportunities, and to reflect on ethical and responsible finance considerations.

Since 2014, we received technical assistance in the form of trainings, capacity building and MSME client trainings. We acquired expert knowledge and technical skills aimed at the development of our staff and clients, which also enhanced the bank’s performance in 2019/2020 and helped reduce considerably our NonPerforming Loan Portfolio over time.

Climate finance, resilience & financing for biodiversity –our e-learning course

We developed an e-learning course on Climate Finance, Resilience & Financing for Biodiversity (accessible online or via the QR code). The course can be flexibly structured and studied at own pace; in total it takes about 8-12 hours.

Since 2021, AFC has been supporting the East African Development Bank and KfW in on-lending climate smart biodiversity finance to the private sector in Uganda. As part of the technical assistance, we trained bank staff using our newly developed e-learning course.

“The E-learning, course enhanced not only our understanding, but also our appreciation of the aspects related to the challenges emanating from climatic change and continued biodiversity degradation. The course further stimulated our and my awareness, of financial players’ critical role in regard to actively participating in interventions geared towards environmental (biodiversity) conservation, so as not only to guarantee sustainability of communities, but also their (Financial players) future survival.”

Dan

Increasing the energy independence of horticultural companies in Moldova

The Republic of Moldova imports all of its energy resources. This poses a risk to energy security and has a negative impact on the business environment. Due to the COVID-19 pandemic and Russia’s attack on Ukraine, energy prices have soared. In this context, horticultural companies are increasingly interested in investments into renewable electricity generation to reduce their production costs and dependence on external energy sources.

Case story

As a consequence, the EIB offered its Fruit Garden of Moldova project, implemented by AFC-FSD through 2018-2022, to finance such investments. AFC-FSD experts advised horticultural companies on the assessment of possible energy and resource savings, the selection of the most feasible technology, and supported them in applying for bank loans.

Peasant farmer Gheorghe Mereacre, from Costești village, grows table grapes on 6 ha and operates a cold store with a capacity of 350 tons. His electricity bill amounted to MDL 150,000 (~EUR 7,500) for about 100,000 kW. Not only is Gheorghe afraid of price increases, but also of the danger of power cuts which may lead to a complete damage of produce kept in the cold store. Despite the insecurities, following Russia’s war in Ukraine, Gheorghe applied for an EIB-financed investment loan for MDL 1.4 million (~EUR 70,000) through the Fruit Garden of Moldova project, to install a 113 kWp photovoltaic system. The application process was swift and in April 2022 the system was installed on the roof of the cold store – just in time for Gheorghe’s harvest that year.

Benefitting from our consulting group’s synergies

The photovoltaic system allows me to cut costs especially now when many other inputs got so much more expensive. At the end of the season, more money is left for the development of the enterprise and for investments to package grapes according to the requirements of the EU retail market.

As a member of GOPA Consulting Group (GCG), we benefit from being associated to Germany's largest group of consulting firms in development cooperation, which combines various technical specialists under one roof. Within the GCG, AFC-FSD is the competency centre for financial sector development activities.

Since 2007, when AFC became a member of the GCG, we have benefited from our competitive advantage of having close working relationships with our sister companies such as: GOPA Infra and their expertise in infrastructure development; GOPA Intec, excelling in energy efficiency and renewable energy technologies; or GOPA Worldwide, which actively tackles climate change and depletion of natural resources.

An outstanding example of productive synergies in the GCG is the “Green Climate Fund Readiness Support Programme” which was implemented by several GCG companies. AFC-FSD provided essential technical inputs in climate-resilient agriculture and in preparing project pipelines, by screening and evaluating investment proposals.