Micro, Small and Medium-sized Enterprises (MSMEs) worldwide show a great potential for cleaner production and resource efficiency technologies as there production processes and facilities are in many cases somewhat outdated and contribute to pollution and resource wastage. In many developing countries and emerging economies, the MSME sector makes up the major part of the economy. Reaching enterprises with technical solutions, knowledge and financial means for allowing cleaner production processes is therefore a key prerequisite for creating cleaner and more environmentally-friendly industries worldwide.
MSMEs often do not possess the necessary knowledge and the technical and financial capacities to produce their goods and services in an environmentally-friendly and resource efficient manner. Knowledge on cleaner production techniques is increasingly being disseminated by the industry and public institutions as well as donor organisations. Yet, the access to finance allowing enterprises to invest in such measures is often limited. One of the reasons for this is, that cleaner production and resource efficient technologies are often relatively new. Therefore, loan officers at the local bank branch are hesitant to sanction a loan for a technology they are not familiar with. Additionally, loan officers are not always aware of the business case of resource efficient production (reducing production inputs, saving costs and resources).
Against this background, the KfW Entwicklungsbank established an environmental credit line for MSMEs in Costa Rica. KfW provided a line of more than 30 million euros to the Banco Nacional de Costa Rica (BNCR) for refinancing loans to MSMEs whose investments contribute to the reduction of pollution and the efficient use of natural resources. Furthermore, the programme strengthened the financial sector in Costa Rica by establishing long-term loans for financing environmental investments through selected financial intermediaries.
In cooperation with its partners greendevelopment, Lexincorp and Österreichische Bundesforste, adelphi supported BNCR in the set-up of a Fund of Environmental Technical Assistance whose purpose it was to promote the environmental credit line, strengthen the institutional structures of BNCR and provide assistance to MSMEs for identifying and analysing environmental investments and submitting loan applications.