ADB Launches $20M Fund for Women-Led SMEs

The Asian Development Bank and the Cambodian government have teamed up to launch a new initiative a $20 million Energy Efficiency Revolving Fund (EERF) to encourage investment in energy-efficient technologies, reduce carbon emissions and the country's dependence on fuel imports.

The project, which was launched on July 2, will also focus on providing better finance for women-led small and medium enterprises (SMEs), and will help Cambodia meet its climate goal of lowering energy consumption by 19 percent below business-as-usual levels by 2030.

This program will be carried out through a joint cooperation between the ADB, Cambodia's Ministry of Mines and Energy, the SME Bank of Cambodia, the Credit Guarantee Corporation of Cambodia, CIMB Bank PLC, and the Foreign Trade Bank of Cambodia to increase financing opportunities for businesses adopting energy-efficient technologies.

Key Highlights:

• ADB and Cambodia have developed a revolving Energy Efficiency Fund worth $20 million
• This project is targeted towards women-owned SMEs through financing
• This fund helps Cambodia in meeting their target of reducing energy use by 19% by the year 2030

The EERF, a two-part fund, has at its disposal $12 million from the United Kingdom, through the ASEAN Catalytic Green Finance Facility, and $8 million from the Green Climate Fund, via the ACGF Green Recovery Programme. It is expected that the finance will not only assist businesses in becoming more energy-efficient but will also be a source of lower operating costs and reduced greenhouse gas emissions, at the same time.

Speaking at the launch event, Yasmin Siddiqi pointed out that the fund has come at an excellent time as Cambodia and other countries are facing energy insecurity issues because of the unrest in the Middle East. She went on to say that more than 90 percent of the businesses in Cambodia are SMEs, a large number of which have been negatively affected by the very high energy prices.

Yasmin said that Cambodia's economy is very dependent on SMEs but unfortunately, a lot of those small and medium enterprises still find it hard to get loans.

She also said that women- owned and women-led SMEs do face more problems, especially when they are in sectors that financial institutions hardly recognize or understand.

According to her, energy efficiency is one of the areas where businesses face a lot of difficulties in securing funds even though the economic benefits in the long run are quite substantial.

Yasmin stressed that buying energy-efficient equipment/computers means a large investment of money at the beginning but indeed, it will allow profit and energy savings in the future, making the companies more competitive and leading to the lesser use of external fuel. So, the revolving fund is meant to support these financing problems and provide Cambodian small and medium-sized enterprises the chance to receive loans under the Energy Transition Sector Development Programme on more flexible and tailored terms that are appropriate to their needs.