Green & Climate Finance
FINANCIAL SECTOR DEVELOPMENT
Your partner in facilitating green investments around the world
The importance of green & climate finance
Impacts related to climate change have no borders. People need financial security as well as resilient working and living environments. That is why climate change mitigation and environmental protection are among the most pressing tasks when it comes to development cooperation. There is an opportunity to deliver improved social, environmental and economic outcomes for people, including support to job creation and more resilient communities, as well as a cleaner and healthier environment. Investments in climate change mitigation and adaptation measures are essential; factors such as strong domestic financial markets and access to green finance play a key role and contribute to the “greening” of economic activities and living conditions worldwide.
Another important factor is the ability of financial intermediaries to fully and duly assess and address climate risks of investments and to provide a transparent disclosure of financing green assets, including their emissions and taxonomy alignment, as well as overall reporting on Environmental, Social and Governance (ESG) according to standards agreed upon. In our view, a proper and transparent disclosure of financing green projects is fundamental. By disclosing and validating financing of green projects, more finance will flow into those investments, and green washing can be avoided.
How we shape green & climate finance
The Financial Sector Development department of GOPA AFC (AFC-FSD) provides an array of advisory services to financial intermediaries, in the field of green & climate finance (in the following referred to as green finance).
AFC-FSD advises financial institutions on how to establish and successfully develop their own “greening” strategy. That strategy influences all financial products and services and ensures that they are not only commercially viable, but also engage in climate-friendly activities, stimulate economically healthy businesses and responsible practices as well as improve living conditions.
We help financial institutions across the globe with the development, implementation, and promotion of innovative financial products, which support a smooth transition from a conventional to a sustainable, climate resilient economy. AFC-FSD has the capacity and programmes to train and coach staff on day-to-day operations, design and support awareness raising on climate risks, and demonstrate opportunities and benefits of green and environmentally sound investments to financial institutions and their clients.
We support financial institutions to identify, evaluate and manage environmental and social risks that are generated by the activities and projects they finance. In addition, AFC-FSD assists in performing Environmental and Social Due Diligence and in establishing an Environmental and Social Management System at the financial institution.
Our experience in climate finance further expands to developing green and energy-nexus loan products, including energy and resource efficiency, as well as small-scale renewable energy financing for micro, small and medium-sized enterprises (MSMEs) and households.
In addition, we support companies and SMEs– potential and current clients of financial intermediaries– to recognize opportunities, evaluate benefits of green investments, and prepare bankable loan applications for further negotiations with banks.
Snapshot of selected projects
ESG TRANSFORMATION
Ghana (KfW)
REGIONAL OFFGRID ELECTRICITY
ECOWAS & Central Africa (WB, CTF, DGIS)
BIODIVERSITY
PROMOTING FINANCE
Uganda (KfW)
FINANCE FOR THE PROTECTION OF NATURAL RESOURCES
Bolivia (GIZ)
In Uganda, we facilitate biodiversity-friendly financing investments in the private sector and developed a climate proof appraisal tool, which helps banks to assess potential borrowers on their businesses’ needs and procedures regarding greening, conservation, and biodiversity.
In Bolivia, we contributed to the development of financing mechanisms for the sustainable management of natural resources (energy – nexus).
We support the Pakistan Microfinance Investment Company to facilitate small-scale renewable energy investments in Solar Home Systems through partner microfinance institutions, develop respective local facilities, enhance capabilities of service providers and staff of financial intermediaries, and improve access to energy for households in poor grid and off-grid locations in the rural areas of Pakistan.
In Bangladesh, we are increasing renewable energy use and reducing electricity costs for commercial and industrial plant owners, supporting projects like utility-scale photovoltaic, wind power, and solar irrigation pumps.
ESMS STRATEGY
Egypt (KfW)
ENERGY EFFICIENT HOUSING FINANCE
Armenia, Kyrgyzstan and India (KfW)
ADVANCING GREEN TECHNOLOGIES
Tajikistan (EBRD)
GREEN CREDIT LINE
Philippines (GIZ)
SOLAR ENERGY FOR RURAL AREAS
Pakistan (KfW)
INCLUSIVE GREEN FINANCE POLICY
Papua New Guinea (GGGI)
RENEWABLE ENERGY
Bangladesh (KfW)
We support an off-grid solar initiative across 15 ECOWAS and 4 Central African countries. Our service include entrepreneurship advice, risk management, and assistance with credit lines and grants. We are dedicated to training and advising off-grid SMEs to enhance their growth and sustainability.
We developed an inclusive green finance policy for Papua New Guinea’s financial sector with the Bank of Papua New Guinea and CEFI. The first edition of PNG’s Inclusive and Green Taxonomy will guide the transition to a sustainable financial system, promoting renewable energy, energy efficiency, and climate-smart agriculture.
We assisted the Land Bank of the Philippines in establishing a credit line for energy efficiency and climate protection. As a result, the bank benefited from enhanced staff and operational capacity. It is now able to effectively manage its green lending activities, identify energy saving potential amongst clients, and attract potential clients for energy efficiency and renewable energy loans.
For various energy-efficient housing finance programmes in Armenia, Kyrgyzstan and India,
our experts designed tailored loan products for financial institutions, enhanced the capacity of their loan officers, facilitated lending operations, and promoted energy efficiency credits among the public.
In Egypt we assist MSMEDA to upgrade their Environmental and Social Management System (ESMS) and develop a sustainability policy.
As part of a consortium led by GOPAInternational Energy Consultants (Intec), we are promoting green technologies in Tajikistan. Our focus includes energy and water savings, renewable energy, and reducing soil erosion. We support private sector green investments, ensure gender equality, develop green financial products, offer training, and implement a gender action plan.
We are positioning the Development Bank Ghana as a leading green finance institution by integrating robust ESG frameworks. Key efforts include developing climate finance policies, a green taxonomy, and a biodiversity finance framework, while also raising awareness among partner financial institutions.
In focus – selected green finance projects
Housing finance in Armenia
In Armenia’s urban economy, buildings are one of the major sources of greenhouse gas emissions. Thanks to the “Im Taniq” housing finance programme activities, the construction of energy-efficient districts has increased, which also contributes to the demand for financing of energy-efficient mortgage. AFC-FSD implemented the programme in cooperation with the National Mortgage Company and the German-Armenian Fund (2021-2022).
The EUR 20 million financing was provided within the framework of the German-Armenian intergovernmental cooperation through the KfW Development Bank.
14 commercial banks and credit organizations participated in the programme. Loans at affordable interest rates were provided to 643 borrowers for the purchase and renovation
of apartments and construction of family houses. Nearly 40% of the loan amount was allocated to energy efficient housing investments (purchase or renovation), which was one of the most important components of the programme.
During the programme an energy efficiency standard for newly constructed buildings was established and an innovative web-based tool was developed (accessible via the QR code) allowing for the assessment of energy efficient projects and measuring of the climate impact of the investments. Apart from that, 351 bank employees and National Mortgage Company staff were trained in 39 capacity building events, including assessment of energy efficient housing projects.
Within the frames of the program, we have established an energy efficiency standard for newly constructed buildings. In cooperation with several partners, including UNDP, we managed to persuade realestate developers to obtain energy passports for new construction projects.
I am glad that the construction of energy-efficient districts and the demand for energy-efficient apartments and houses have increased in our country.
Benefitting from our consulting group’s synergies
As a member of GOPA, 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 GOPA, AFC-FSD is the competency centre for financial sector development activities.
Since 2007, when GOPA AFC became a member of the GOPA, 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; 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 GOPA is the “Green Climate Fund Readiness Support Programme” which was implemented by several GOPA companies. AFC-FSD provided essential technical inputs in climate-resilient agriculture and in preparing project pipelines, by screening and evaluating investment proposals.
Edmond Vardumyan, CEO, National Mortgage Company, Armenia
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
Since 2021, GOPA AFC has been supporting the East African Development Bank and KfW in onlending climate smart biodiversity finance to the private sector in Uganda. Over EUR 3.5 million have been lent out to over 500 final borrowers so far, to make agricultural enterprises more climate-smart, e.g. through the provision of water ponds. As part of the technical assistance, we trained bank staff using our newly developed e-learning course.
“As a PFI, we have seen tremendous growth of the agriculture portfolio as a result of lending out the Biodiversity Finance Facility. Many of the borrowers have appreciated the benefits of the climate tool to their farms.”
We developed an e-learning course on Climate Finance, Resilience & Financing for Biodiversity (accessible via the QR code). The course can be flexibly structured and studied at own pace; in total it takes about 8-12 hours.
“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.”
Kayita Dan Davis Lule, Agriculture Lending Manager, Finance Trust Bank, Uganda
Edith Batuuka, Agriculture Supervisor, Opportunity Bank Uganda
Elijah Kariuki, Head of Human Resources, Family Bank Kenya
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.
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.
Inclusive green finance policy for Papua New Guinea
During 2021 until 2022, on behalf of the Global Green Growth Institute (GGGI), GOPA AFC has developed the framework foundations for an inclusive green finance policy (IGFP) for the financial sector of Papua New Guinea, in partnership with the Bank of Papua New Guinea and the Centre for Excellence in Financial Inclusion (CEFI).
The IGFP was designed for investors, lenders, and other financial sector participants to identify, track, monitor, and demonstrate the scope and volume of their green and inclusive financial flows, whether it is in the form of a loan, equity, guarantee, or other financial instrument. The IGFP is supported by a roadmap, which sets out practical
action steps necessary to implement an IGFP and taxonomy in Papua New Guinea.
In the process of developing the IGFP, IGFP committee members discussed the key findings of a pilot application of the green finance taxonomy— with strong emphasis on financial inclusion— and provided strategic guidance on its further development. Additionally, various technical working groups were established, with representatives from financial intermediaries, authorities, industrial associations and donors, to steer the further IGFP development at operational level.
Gheorghe Mereacre, Peasant farm owner, Moldova
Providing off-grid electricity access in West Africa
Launched in September 2023, the Regional Off-Grid Electricity Access Project (ROGEAP) aims to establish a regional market for off-grid solar products in 15 ECOWAS countries, plus Cameroon, Chad, Mauritania, and the Central African Republic. The initiative supports stakeholders while managing environmental, social, and gender-related risks.
Funded by the World Bank, the Clean Technology Fund (CTF), and the Government of the Netherlands (DGIS), ROGEAP offers advisory services and financial support. A consortium, including GOPA AFC, provides advisory for the Entrepreneurship Support Facility and the Financial Support Facility. The West African Development Bank (BOAD) manages a credit line for solar businesses and grants for enterprises came from the CTF and the DGIS.
In the first year of the 5-year project, ROGEAP focuses on advising and training off-grid solar SMEs. So far, 567 SMEs have been trained in Burkina Faso, Côte d’Ivoire, Ghana, Mali, Mauritania, Benin, Nigeria, Cameroon, Chad, Gambia, Niger, Sierra Leone, Liberia. By the end of 2024, USD 1.3 million in matching grants and USD 6.5 million in market entry and performance-based grants will be awarded to off-grid solar SMEs. In March 2024, the pilot concluded with a total of 32 awardees. These comprised 11 Matching Grants, 14 Market Entry Grants, and 7 Performance-Based Grants, representing 6 different countries. As of September 2024, 13 countries are participating in the second call, with 422 applicants competing for an additional USD 14 million in grants.
Empowering rural Pakistan with solar energy
In July 2022, GOPA AFC, in collaboration with Intec and Euroconsult, launched the “Access to Financial Services (PMIC SOLAR)” project to boost energy access for households and micro-entrepreneurs in rural Pakistan. We are assisting the Pakistan Microfinance Investment Company (PMIC) in implementing the KfW-funded Renewable Energy Initiative through Microfinance Programme (PRIME).
Our support helps PMIC and its partners finance Solar Home Systems and Solar Irrigation Pumps by enhancing local facilities, improving affordability, and ensuring highquality supply. Our team of financial, ESMS experts, and engineers reviews and enhances key documents and
In Lahore, I had an unforgettable meeting with clients of a micro finance company that received a loan for the purchase and installation of Solar Home Systems Component Based.
frameworks, including the Quality Assurance Framework and Concept Papers.
In February 2024, we trained 122 staff members (including 18 women) from 13 PMIC partner MFIs in Hyderabad, Multan, and Lahore. The training covered the PRIME Program, technology, product offerings, quality assurance, financial details, subsidy schemes, ESMS, grievance mechanisms, consumer awareness, and effective marketing. The project runs until July 2025, with more training sessions and tailored advisory support planned to ensure stakeholder satisfaction.
Victor Gorbachov, Financing expert, GOPA AFC
Enhancing ESMS and Sustainability Policies in Egypt
Since 2023, we have been assisting the Micro, Small, and Medium Enterprise Development Agency (MSMEDA), with funding from KfW, in Egypt. Our aim is to upgrade their Environmental and Social Management System (ESMS) and develop their sustainability policy. The ESMS helps MSMEDA manage environmental and social risks, improve borrower performance, and identify sustainable finance opportunities.
We have been collaborating closely with MSMEDA’s management to integrate environmental and social factors into their risk management framework, develop
their sustainability statement, and create an ESMS standard operating procedures manual. Currently, we are building the capacity of key staff and regional offices on environmental, social, and governance (ESG) practices and client due diligence to ensure compliance with international standards.
Additionally, we are working with MSMEDA’s partner financial institutions, including commercial banks, microfinance institutions, and venture capital funds, to assess and upgrade their environmental and social policies and procedures, and to raise awareness of ESG best practices.
Renewable Energy Programme in Bangladesh
Under the German Financial Cooperation with Bangladesh, the Renewable Energy Programme (REP) aims to boost renewable energy use and reduce electricity costs for commercial and industrial plant owners, particularly in the garment and textile industries. Funded by the German Government through KfW, REP supports projects like utility-scale photovoltaic, wind power, biogas-based electricity, and solar irrigation pumps. The Infrastructure Development Company Limited (IDCOL) leads REP with support from various stakeholders. We, at GOPA AFC, along with Intec, provide strategic consulting to IDCOL.
The solar irrigation pumps initiative has seen notable success, with many projects receiving up to 50% grant funding from KfW. In 2024, our experts reviewed grant requirements for solar irrigation pumps to evaluate their economic viability and suggest ways to reduce grant
dependence. We analyzed data, compared financial structures, examined economic parameters, and developed a cash-flow model to provide key performance indicators. Our findings include recommendations to adjust grant elements for sustainable and economically beneficial SIP investments.
ESG Transformation at Development Bank Ghana
Our KfW project “Accompanying Measure – Reform Partnership: Development Bank Ghana”, which we implement in consortium with CDC Consult from April 2023 until March 2026, fosters inclusive growth and sustainable development. By integrating robust environmental, social, and governance (ESG) frameworks, we are positioning the Development Bank Ghana (DBG) as a leading green finance institution in Africa.
Key efforts include drafting a climate finance policy, developing a green taxonomy, biodiversity finance framework and raising awareness among partner financial institutions. This aligns financial products with environmental sustainability and supports Ghana’s
transition to a low-carbon economy. We have delivered a Sustainable Finance Policy & Framework Paper and a Final Biodiversity Concept Paper and are in the process of developing a Green Finance Facility Manual to guide the accelerator program and training materials. Additionally, we advise DBG on developing tools for Energy Efficiency (EE) and Greenhouse Gas (GHG) emission measurement and management.
DBG aims to measure and disclose GHG emissions to align with the Paris Agreement. This framework supports both domestic development and international compliance. We also empower DBG’s team and PFIs through workshops on business development, leadership, and green finance.
GOPA AFC’s Environmental Management System
In implementing the Environmental Management System, GOPA AFC achieved its Environmental Management System Certificate according to ISO 14001, in November 2020.
Deriving from GOPA AFC’s environmental policy, the following environmental objectives were defined, to further reduce our environmental footprint:
About the GOPA AFC Financial Sector Development department
GOPA AFC’s specialised FSD team was established over 30 years ago. Within the GOPA, AFC-FSD is the competency centre for financial sector development.
Around the globe, AFC-FSD develops tailor-made credit and saving products and establishes appropriate regulation and supervision systems. We advise financial institutions— including commercial and central banks, mortgage companies, microfinance and apex institutions— as well as MSMEs and smallholder farmers.
Our FSD projects in 2023
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THEMATIC FOCUS AREAS
For further questions please contact:
Elena Yunatska joined AFC-FSD in 2021. She has above 20 years of experience in the management of international TA projects, and over 10 years in green finance. Ms Yunatska is a certified green finance expert and an experienced trainer. She conceptualized and monitored implementation of various TA assignments in green finance with focus on access to finance, capacity building, impact assessments, research, sustainability of financial markets, awareness raising, visibility of impact, etc. In addition to Ukrainian– her mother tongue– she is fluent in English, German and Russian.
Contact: elena.yunatska@gopa-afc.de
Alexis Nyamugira joined AFC-FSD in 2021. He has over 5 years of experience in advisory and implementation of technical assistance, including green and biodiversity finance initiatives. Mr Nyamugira has a strong track record in project management, monitoring and evaluation, and research on various topics related to financial sector development. Prior to joining GOPA AFC, he worked at the European Investment Bank in Luxembourg. He has also worked as a research fellow and independent consultant in international development, focusing on financial inclusion in the Democratic Republic of Congo and Kenya. Mr Nyamugira is fluent in French, English, and Swahili.
Contact: Alexis.Nyamugira@gopa-afc.de
Read more about FSD’s work and projects
