Green financing for local businesses
ZGJP, through its Access to Finance component, is collaborating with the Africa Guarantee Fund (AGF) on a training programme to develop capacity for the local financial sector to provide green finance to home-grown business entities.
The initial phase of the partnership involves training all the nineteen locally registered banks in the concepts of green finance and thereby demonstrating the economic value of promoting environmentally responsible business practices through their products and services. It also aims to appeal to a higher sense of business responsibility from an environmental custodianship perspective amongst business practitioners.
The training will be followed by bilateral negotiations between the AFG and local banks on being supported in offering green finance to local businesses through the AFG's Green Guarantee Facility, a guarantee scheme aimed at offering some risk mitigation for bank's exposure to SMEs that are operating green businesses.
Through its inclusive green growth and private sector development approach, ZGJP aims to tackle access to finance challenges that small enterprises in the green building construction sector are confronted with. The programme's role in the collaboration with AGF is to facilitate the training in partnership with the United Nations Environment Programme Finance Initiative (UNEP FI) and to facilitate linkages between the Fund and the local financial sector as well as between SMEs and the financial service provider under the Africa Guarantee Fund- Green Guarantee Facility. ZGJP is also planning on engaging local funds to participate in this scheme to help unlock locally available and cheaper funds for SME lending.
Finance remains one of the most imperative aspects determining the survival and evolution of Medium, Small and Micro Enterprises (MSMEs) in both the developed and developing worlds. In order for MSMEs to be more competitive and sustainable, the Zambia Green Jobs Programme facilitates capital and business linkages for these business entities who need resources to scale up production, improve technologies and change or upgrade products or services.
The overall objective of the AGF Green Guarantee Facility is to promote green growth and climate resilient development in African economies by catalyzing bank lending to SMEs for projects and investments linked to climate change adaptation and mitigation.