IFC, a member of the World Bank Group, with the support of the Government of Canada, will help Lebanon’s largest leasing company provide lending to businesses to boost the adoption of energy-efficient technology, thus contributing to climate change mitigation.
IFC will provide a US $7 million loan to the Lebanese Leasing Company SAL (LLC), the leasing arm of Fransabank Group. The loan includes US $3.5 million from IFC’s own account and another US $3.5 million from the IFC-Canada Climate Change Program. This is the third IFC loan for Sustainable Energy Finance (SEF), after two loans for US $10 million to Fransabank SAL and US $3 million to LLC, both granted in May 2014 and fully utilized, according to IFC.
The new loan will help LLC strengthen its SEF lending program and channel funding to high-impact renewable energy and energy efficiency leasing projects. The investment is also expected to help reduce greenhouse gas emissions in Lebanon, which have increased by over 27 percent (11,445 tons) since 1994.
“The investment from IFC and Canada will help us increase our support to small businesses seeking to invest in clean energy, reaching out to more of them while mitigating climate change and supporting clean energy technologies,” said Adel Kassar, Chairman of LLC.
The investment is part of IFC’s strategy to support investments that address climate change mitigation through financial institutions helping borrowers reduce risk, lower operating costs and become more resilient to the impact of climate change. IFC works with Lebanese banks and leasing companies to help scale up energy efficiency projects and SEF in order to reduce greenhouse gas emissions and promote sustainable development.
“One of the key challenges Lebanon is facing is an energy shortage, which impacts the productivity of the country’s private sector. Supporting investments in energy efficiency and renewable energy is key to helping Lebanese businesses secure a sustainable future and reduce expensive energy costs,” said Mouayed Makhlouf, IFC Regional Director in the Middle East and North Africa.
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 close to $292 million Canadian dollars to the program, to enable climate change investments that generate environmental and economic benefits in developing countries.
“Climate change is a problem that impacts us all, and Canada is committed to providing leadership and working with its international partners to help us move towards a sustainable and resilient world,” said the Honourable Catherine McKenna, Canada's Minister of Environment and Climate Change.
The initiative is part of IFC’s Sustainable Energy Finance Program, which aims to strengthen 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 over 25 million tons of greenhouse gas emissions.