IFC, Canada Continue Supporting Sustainable Energy Financing in Lebanon
The FINANCIAL -- IFC, a member of the World Bank Group, with the support of the Government of Canada, is helping Fransabank, the third largest banking Group in Lebanon, scale up its lending to businesses that are looking to adopt renewable and energy-efficient technologies and mitigate climate change.
IFC will provide a loan package of US$20 million to Fransabank to help increase its lending for energy efficiency and renewable energy projects. This is expected to help businesses save energy, reduce greenhouse gas emissions, and promote sustainable development. The financing package includes a US$14 million loan from IFC’s own account, and a US$6 million loan from the IFC-Canada Climate Change Program.
The investment marks IFC’s fourth loan to Fransabank Group in sustainable energy finance (SEF). In May 2014, IFC provided a US$10 million loan to the Bank and a US$3 million loan to its leasing arm, the Lebanese Leasing Company SAL (LLC). Both loans were fully utilized. In January 2016, a US$ 7 million loan was also granted to LLC, according to IFC.
“The Bank has financed till date projects in different sectors, such as Agriculture, Industry, Green Buildings, Education, Health, Tourism, etc. This additional investment from IFC and Canada will help Fransabank to support clean energy technologies and encourage sustainable practices that will improve competitiveness of local companies and increase their profitability,” said Adnan Kassar, Chairman of Fransabank Group.
"Supporting energy efficiency and renewable energy projects is key to fostering a sustainable future in Lebanon and other parts of the region,” said Mouayed Makhlouf, IFC Regional Director for the Middle East and North Africa. “This loan to Fransabank highlights a growing demand for cost-effective and energy-efficient solutions among Lebanese businesses."
The Government of Canada's contribution to the IFC-Canada Climate Change Program has helped make this financing package viable. To date, Canada has provided CA$271 million to the program, to enable climate change investments that are generating significant environmental and economic benefits in developing countries.
“Climate change affects everyone, and we must work together to find the solutions the world needs. The Government of Canada’s investment in renewable energy initiatives in Lebanon is helping to encourage the adoption of a greener economy, achieve GHG reductions and foster a cleaner, more prosperous global future,” said the Honourable Catherine McKenna, Canada's Minister of Environment and Climate Change.
Lebanon’s greenhouse gas emissions have increased by 28 percent since 1994 and continue to rise. The project will help reduce those emissions by 95,000 tons per year by year 2020, and strengthen sustainable energy financing in Lebanon.
Sustainable Energy Finance is part of Fransabank Group ‘Go Green Strategy’. Fransabank is looking to further increase its SEF portfolio by targeting new market segments. This will help it improve the risk profile of its portfolio and enhance its social and environmental image.
The initiative is part of IFC’s Sustainable Energy Finance Program, which aims to develop the capacity of banks and financial institutions to extend sustainable energy financing to the private sector. To date, through the program, IFC has supported 125 financial partners through 135 sustainability and climate projects in 37 countries, providing US$4.5 billion in financing that has helped reduce greenhouse gas emissions by over 25 million tons.