Millennium Foundation Kosovo (MFK) together with Millennium Challenge Corporation (MCC) and Kosovo Credit Guarantee Fund (KCGF) hosted an Executive Informative Session for the donor community, the international development and financial organizations in order to provide more information on MFK’s 5 million USD Renewable Energy Independent Power Producer (IPP) Facilitation Project.
The opening remarks were delivered by Lulzim Rafuna, Acting Minister of Finance of the Government of Kosovo, who stated that: ‘The Government of Kosovo is committed to support both the growth of Kosovo Credit Guarantee Fund and the Renewable Energy Sector.” Furthermore, he expressed gratitude towards MFK and MCC for their efforts, reassuring their support and commitment towards opening the Renewable Energy guarantee window.’
MFK’s CEO Petrit Selimi presented the vision of this project and the impact it will have in the renewable energy sector in Kosovo. ‘This is an exciting project for us as MFK, because we are using an innovative blended finance approach to unlock 25 million in commercial finance for renewable energy.’
Following Selimi’s presentation, Sarah Olmstead, MCC Country Director, spoke about the ongoing support to the Kosovo Credit Guarantee Fund in fostering the renewable energy market, thus ensuring Kosovo’s reliable energy future. For context, on October 02, 2019, MFK supported by the U.S. Millennium Challenge Corporation (MCC), has signed an Implementing Entity Agreement with the Kosovo Credit Guarantee Fund (KCGF), Kosovo’s foremost guarantee vehicle to support access to finance for the private sector. This agreement has formalized collaboration between the two organizations to build expertise and open a Project Lending and Solar Renewable Energy Guarantee Window.
Representing KCGF, the organization’s managing director, Besnik Berisha, walked the audience through an elaborated presentation of the current structure of KCGF and the plans for the new renewable energy window. “The cooperation between KCGF and MFK/MCC on the launching of the Solar Renewable Energy Guarantee Window, is going to open doors for the commercial banks in Kosovo towards expanding borders in the credit market, while having a positive impact in the environment we live in.” the Managing Director of the Kosovo Credit Guarantee Fund, Besnik Berisha, stated.
Albert Bossar, MCC’s Associate Director of Trade and Finance at MCC, presented the structure of the program as a chance to transform renewable energy project financing in Kosovo. ‘This highlights a successful case where donors and development partners can work together supporting a key institution for Kosovo while also catalyzing the renewable energy sector.’ – noted Bossar.
The credit guarantee window supported by MFK will focus on three complementary interventions to increase solar energy financing in Kosovo:
1. Providing technical assistance and capacity building to establish a renewable energy guarantee window in project financing
2. Launching a project accelerator focused on qualitative project screening and development of bankable projects by independent power producers
3. Standardizing the market through a toolkit for training and project standardization to help KCGF partner banks assess risk factors when evaluating solar generation projects
MFK, through MCC funded due diligence, spent two years engaging stakeholders and analyzing the role guarantees could play in unlocking commercial financing for small-scale Renewable Energy Independent Power Producers. This research examined the challenges of providing project finance to power producers through local and regional commercial banks. Findings from this analysis informed the Kosovo Renewable Energy Independent Power Producer and Commercial Finance Facilitation Project.
ABOUT THE ENTITIES:
Millennium Foundation Kosovo (MFK) is an independent foundation set up in 2018 to implement the Threshold Agreement between Kosovo Government and the Millennium Challenge Corporation, worth 49million USD. MCC’s Kosovo Threshold Program addresses two key constraints to Kosovo’s economic growth: an unreliable supply of electricity; and real and perceived weakness in rule of law, government accountability and transparency. MCC’s investments are designed to strengthen the power sector by fostering a market-driven approach to lowering energy costs for households and businesses, encouraging energy efficiency, and developing new sources of electricity generation. The program also supports the Government of Kosovo’s efforts to improve decision-making and accountability by increasing the accessibility and use of judicial, environmental, and labor force data.
The Kosovo Credit Guarantee Fund (KCGF) is a local, independent, sustainable credit guarantee facility issuing portfolio loan guarantees to financial institutions to cover up to 50% of the risk for loans for micro, small, and medium enterprises (MSMEs). KCGF plays a key role in facilitating MSMEs obtaining more financing for their growth. By reducing the risk of lending to MSMEs, it encourages KCGF partner financial institutions to lend to MSMEs, to increase the amount of lending to MSMEs, to expand products and services available to MSMEs and improve the terms and conditions for lending. KCGF helps financial institutions lend to viable MSMEs that might not have quite qualified without the guarantee to receive a loan, or, if it had a loan, would not have qualified to obtain the additional financing it needed to grow.