Sparkasse Bank AD Skopje has successfully secured a senior unsecured loan of up to €7 million from the European Bank for Reconstruction and Development (EBRD) under the Green Finance Facility (GFF). The loan will be divided into two tranches of €2 million and €5 million, and it is specifically earmarked to provide funding for small and medium-sized enterprises (SMEs) in North Macedonia to invest in renewable energy (RE) and energy efficiency (EE) projects.
The main objective of the loan is to support Green Economy Transition (GET) investments, with 100% of the funds allocated for this purpose. This initiative has received a transition impact score of 65, indicating its potential to significantly contribute to the Facility objectives and promote the qualities of being green and competitive.
By targeting the high energy and carbon intensity of the private sector in North Macedonia, the project aims to bolster the country’s transition to a green economy. This transition will be accomplished by financing RE and EE technologies for SMEs, thereby enhancing the competitiveness and sustainability of their operations.
Furthermore, the proposed project will also contribute to enhancing the capacity of Sparkasse Bank AD Skopje for financing green investments, ultimately leading to a more competitive financial sector in the region.
This initiative is of particular significance as Sparkasse Bank AD Skopje holds the position of the 5th largest bank in North Macedonia with a market share of 12.6% by total assets as at YE 2023, solidifying its pivotal role in the country’s financial landscape.
The added value of this project lies in combining long-term financing with technical support and targeted investment incentives to encourage green investments that will ultimately enhance the competitiveness of SMEs in the region.
Given the nature of this project, compliance with environmental and social management standards is paramount. Sparkasse Bank AD Skopje must adhere to EBRD’s Performance Requirements (PRs) 2, 4 and 9, including compliance with the EBRD E&S Exclusion and Referral lists. The Bank will also be required to submit annual environmental and social reports and ensure that any sub-borrowers also comply with national environmental, health, safety, and labour (EHSL) requirements.
The implementation of the project will be supported by comprehensive technical assistance to Sparkasse Bank AD Skopje and the sub-borrowers, funded by the United Nations Development Programme (UNDP) and the Government of North Macedonia. This support includes a grant component in the form of investment incentives, further highlighting the commitment to driving the green transition in the country.
Given the substantial investment and potential impact of the project, it is clear that thorough due diligence is essential. The EBRD’s Office of the Chief Compliance Officer (OCCO) is actively involved in conducting integrity due diligence on all Bank clients to ensure that the projects adhere to the highest standards of integrity and comply with international best practices.
The EBRD is also dedicated to disclosing information and consulting with its stakeholders. The implementation of its Access to Information Policy and the Independent Project Accountability Mechanism (IPAM) reflects the Bank’s commitment to fostering transparency, accountability, and sustainability across all its initiatives.
In conclusion, the collaboration between Sparkasse Bank AD Skopje and the EBRD’s Green Finance Facility signifies a crucial step towards advancing green investments in North Macedonia, with the potential to transform the landscape of the private sector and lead the country towards a sustainable and competitive future.