A fund to improve access to finance for climate and green-oriented small and medium-sized enterprises (SMEs) in Africa has been established by the Africa Guarantee Fund (AGF), a pan-African non-bank financial institution owned by the African Development Bank (AfDB).
Known as the Green Guarantee Facility, the fund is to enable financial institutions to fund African SMEs whose investments ensure sustainable growth and climate-resilient development in African economies.
The Charge d’Affaires at AGF, Mr Germain K. Dodor, made this known at a press conference yesterday in Accra to announce the Financing for Sustainable Development Conference.
The conference, which is supported by the International Trade Centre (ITC) and the Nordic Development Fund (NDF), seeks to expand access to finance for green growth-focused SMEs in Africa.
The NDF is a joint Nordic finance institution which supports climate change and development in low-income countries, while the ITC is the joint agency of the World Trade Organisation and the United Nations which assist SMEs in developing economies to become more competitive in global markets.
According to Mr Dodor, the objective of the Green Guarantee Facility is to create employment across Africa through the SMEs accessing green financing.
The facility, he said, had a capacity development component for both financial institutions and SMEs to build knowledge and capacity of banks in Africa in the green economy, as well as help to mitigate the risk associated with financing climate-friendly investment.
The establishment of the facility, he said, was also inspired by the Paris Agreement which pushes for governments from around the world to take climate change seriously.
With a strong conviction that the engine of growth in Africa was the SME sector, Mr Dodor said he was certain that the facility would help expand the pool of available financing to SMEs.
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