People and businesses in SEE became aware of climate crisis, benefits of green energy

People aware climate crisis green energy Mejra Juzbasic Bajgoric interview

Photo: Mejra Juzbašić Bajgorić


February 19, 2021






February 19, 2021





Renewables were once a niche but are now in high demand, while the public is more attuned to the urgency of climate action than a decade ago, which can be seen in the expansion of the energy efficiency sector in the region, said Mejra Juzbašić Bajgorić, Regional Director for Southeast Europe at Finance in Motion and an advisor for the Green for Growth Fund. In an interview with Balkan Green Energy News, she underscored micro and small businesses and households can achieve meaningful results in protecting the environment and cut energy costs if they have access to green finance.

The Green for Growth Fund or GGF has been active for more than a decade. Southeast Europe accounts for two thirds of the Luxembourg-based investment company’s portfolio, developed in partnerships with banks and microfinance institutions through on-lending. But Juzbašić Bajgorić says funding alone isn’t enough and that promoting sustainable development, for instance through awareness raising and capacity building, is also necessary for the green transformation.

The region of Southeast Europe was where the Green for Growth Fund started its impact investment journey in 2009. What are the fund’s biggest achievements in the region in terms of green energy financing, resource efficiency, and climate impact?

When the GGF was launched over ten years ago, energy efficiency wasn’t really at the forefront of people’s minds here in Southeast Europe – let alone something they were actively pursuing in homes and small businesses. But today it’s a different story. There is more of a consciousness now that insulating doors and windows, for example, not only saves energy costs for families and businesses, but also contributes to reduced carbon emissions.

I’d say that, in general, the public is more attuned to the urgency of climate action than they were a decade ago. Since then, requests for funding to enact energy-saving measures have boomed. To date, the GGF has enabled more than 21,000 loans for such measures.

The GGF co-financed the first large-scale wind power plants in Serbia

The same goes for the use of renewable energy. What was once a niche product is now in high demand, especially for commercial energy creation.

Take, for example, two wind farms in Serbia, Alibunar and Čibuk 1. These were co-financed by the GGF in 2018 as the very first large-scale wind farms in the country. Today, they are producing 200 MW worth of energy, reducing CO2 emissions by approximately 50,000 tons per year.

Financing big green projects is usually seen as the most impactful way to protect the environment, but great impact can be also achieved by enabling micro and small business and households’ access to green finance. That is one reason why the fund launched the Green for All program just last year.

By collaborating with partner microfinance institutions (MFIs) and other financial service providers focused on micro and small enterprises, the GGF is exploring diverse ways – particularly through technical assistance – to support MFIs institutionalise green transformation within its own organisations in order to provide better access to green finance.

Well-delivered microfinance can grow businesses, create jobs, and improve livelihoods, in addition to making a positive difference in our environment

By exploring these kinds of questions and discussing solutions collaboratively, we are well on our way to delivering green microfinance to those who need it most. And one cannot deny that there is huge potential in this: research shows that well-delivered microfinance can grow businesses, create jobs, and improve livelihoods, in addition to making a positive difference in our environment.

So we see that momentum is gaining in the region for investments that actively protect the climate. The GGF’s activities prevent more than 365,000 tons of CO2 emissions in Southeast Europe per annum. That is the same as taking 80,000 passenger vehicles off the road for a whole year!

People of climate crisis green energy Mejra Juzbasic Bajgoric interview
Photo: GGF secured the loan for the construction of a solar power plant in Plyskiv in Ukraine (Finance in Motion)

Which are the major financial institutions that the GGF cooperates with in the region?

The fund works with a variety of financial institutions but the two groups that form the majority of GGF’s portfolio are large banks and specialized microfinance institutions. One example of a green finance dedicated partner is ProCredit Bank Serbia, an example of an institution going above and beyond in the pursuit of a green transformation.

UniCredit Bank Serbia is also a long-term partner of the Fund, which finances renewable energy projects and energy efficiency projects. When it comes to microfinance institutions, Partner MCF Bosnia and Herzegovina was the first microfinance institution to become a partner of GGF and successfully implement green lending to small businesses and households.

In general, financial institutions in the region are pursuing green lending with greater appetite and some are doing much more than just designing new types of loans for green purposes; they are devoting resources for awareness-raising campaigns and training sessions for their own staff in order to enable them to improve the environmental performance of the clients they work with.

For example, many financial institutions are implementing an environmental management system (EMS) as an integral part of their business model. Essentially, the aim of this system is to develop and implement measures that mitigate environmental impact and ensure compliance with relevant legislation and international standards.

In what way does the Fund support its partners in the region apart from providing financing?

I strongly believe that finance alone is not enough to create a tangible long-term impact. It is essential, yes, but not sufficient on its own. Only by promoting sustainable development that works in tandem with investments can we truly drive the green transformation.

That’s why the GGF launched its Green Academy, which provides capacity building activities and training. This allows the fund to build and deepen the green finance markets in which it operates. It does so by supporting its partners in enhancing their knowledge on topics related to sustainability, resource efficiency, energy efficiency, and renewable energy finance.

The Green Advisory Program provides expert advice, supported by a grant, to clients implementing green measures

The GGF also sees itself as a market enabler, which is why the GGF Technical Assistance Facility initiated the Green Advisory Program in 2019. Essentially, the program provides expert advice, supported by a grant, to clients implementing green measures to ensure they are done sustainably.

For example, when a client takes out a green loan to buy new machinery that is more energy efficient, the Green Advisory Program would help that client in implementing their energy and resource efficiency projects based on tailored, expert advice. Through this type of awareness raising on the potential impact of green investments, we aim for more and more people to view green finance not as something with abstract benefits but as mainstream and desirable.

According to the fund’s portfolio, which energy measures are the most popular in the region? Can you provide some concrete examples?

As mentioned before, there is a great demand for energy efficiency improvements for businesses and households, as well as upgrades for processes and process-related equipment, including agricultural equipment. This could include an energy-efficient machine to cut glass, or new automated equipment for harvesting agricultural products.

One business client from one local bank, for example, is an innovative producer of biomass pellet heaters, who used the financing to buy a laser-cutting tool to help them save resources; another is a wood cutting business that was able to improve productivity and lower energy costs by purchasing new equipment.

Firms are looking to save resources and energy by upgrading processes and equipment

When looking at households, the fund has worked with partner institutions to on-lend for measures that run a diverse range: I mentioned insulating doors and windows, putting facades on their houses, buying energy-efficient household devices like fridges and washing machines, or purchasing hybrid or electric vehicles. All these measures add up.

It goes to show just how important green investments are, whether it be for a family home or a thriving business. To put it into perspective, the energy saved by the fund could power almost 10,000 homes for an entire year!

People became aware climate crisis green energy Mejra Juzbasic Bajgoric interview
Photo: Biomass pellet heater manufacturer KEPO from Serbia bought a resource-saving laser cutter with an energy efficiency loan enabled by the GGF (Finance in Motion)

Has the COVID-19 pandemic reduced the interest in investments in renewable energy projects?

Due to the economic recession caused by the global pandemic, the appetite for investments has decreased overall, not just for green investments. But one crisis does not push out the other: climate action is just as urgent today as it was a year ago.

Despite the turbulent environment, now more than ever is the time to future-proof our homes, businesses, and communities. That means continuing to drive the green transformation and ensure that businesses and households post-COVID-19 are resilient and sustainable.

In addition, the GGF Technical Assistance Facility established the COVID-19 Response – Early Stage Green Innovation Support Initiative to assist negatively impacted green entrepreneurs by providing financial support for the implementation of innovative crisis continuity measures.

What makes the fund different from others in the investment industry? How does the fund support businesses in their transformation to a green and circular economy?

It has been a wonderful journey for me to see how the GGF has achieved such tremendous scale in the past decade by leveraging the network and outreach of financial sectors while expanding into new markets. This ability to expand into new regions, reach out to more beneficiaries, and target a broader set of technologies and sectors reveals the fund’s ability to innovate and adapt to deliver green impact.

This is especially important now as the world still fights with the COVID-19 crisis where businesses, particularly across the SEE region, are struggling to remain operational or stay employed. The fund’s ability to quickly act and inject capital to those partner institutions who in turn support businesses and households in staying afloat financially is crucial for a robust and an even greener economic recovery to ensue.

The fund is also ramping up awareness-raising campaigns for green finance with partner institutions. It is only by communicating the importance of resource efficiency and sustainability can all of us contribute to the transition of a circular economy that is strong and resilient.

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