The energy and land use sectors are responsible for the majority of greenhouse gas emissions in many Latin American countries. Approximately 40 per cent of emissions in the region are from agriculture, forestry and other land use sectors. The energy sector is also a major source, although it varies substantially from country to country.
Small to Medium-Sized Enterprises (SMEs) account for over 90 per cent of all enterprises in the region, generating more than half of all jobs, and a quarter of GDP.
Investments in low-carbon technologies and low emissions land use practices are effective investments for climate change mitigation – in particular for SMEs. Yet the adoption of such practices is limited due to the lack of sufficient green-loan programs with suitable interest rates and loan tenors. The finance gap for SMEs in Latin American is over USD 1,000 billion.
The objective of the green climate financing facility is to reduce greenhouse gas emissions in Latin America through locally financed and locally implemented climate change mitigation projects in the renewable energy, energy efficiency and land use sectors.
The programme will make blended green credit lines available to local financial institutions for on-lending to SMEs and framers in selected countries. The programme also involves awareness raising, capacity building and technical support activities, including matchmaking events between local financial institutions, technology and solution providers, and SMEs, including agriculturalists. The local financial institutions will also be supported to put in place appropriate environmental safeguards, social and gender policies, and monitoring and reporting systems.
