January 12, 2022
Belmopan – A signing ceremony was held in Belmopan, for the CARICOM Development Fund (CDF) – Credit Risk Abatement Facility Master Guarantee Agreement between the CDF and DFC.
The CDF Credit Risk Abatement Facility (CRAF) is an Energy Efficiency (EE) /Renewable Energy (RE) Credit Enhancement Program, geared at promoting SME access to financial resources for investments in EE and RE technologies.
The CRAF comprises a Credit Risk Instrument, which will provide credit risk Comfort via partial credit guarantees to DFC as a lender for financing credits to clients who would otherwise be unable to secure such for investments in EE/RE. CRAF will provide support for eligible projects ranging between BZD $50,000 and BZD $ 1.5 MN. The program also entails a Technical Assistance (TA) grant component geared at assisting SMEs to design bankable projects, which CRAF can support. The TA will also assist the DFC to better evaluate energy projects by enhancing staff capacity to identify and evaluate opportunities for RE/EE for its clients.
CRAF is a first for the DFC and Belize, with the Master Guarantee Agreement culminating after extensive negotiations between the CDF, and the DFC. Belize is now one of five CARICOM countries to adopt CDF’s – CRAF, the other nations being Barbados, St. Lucia, Guyana and Suriname.
When successfully implemented, CRAF will serve as a basis for designing other credit enhancement programs to support SME access to credit for productive investments.
Key signatories to the CRAF Master Guarantee Agreement were Mr. Rodinald Soomer, CEO of the CARICOM Development Fund and Mr. Henry Anderson, Chairman of the DFC.
In his delivery, Mr. Soomer stated, “The Caribbean region has committed to reduce its reliance on fossil fuels as a source of energy and embraced the use of renewable energy sources such as wind and solar which are abundant in the region.” He added, “Financing RE projects remain a major difficulty, especially for SMEs, in Belize and the wider CARICOM Region, as SMEs are typically disadvantaged in accessing financing given the nature of their business, particularly since the onset of the COVID-19 pandemic, therefore dedicated financing with risk reduction measures can increase investments in these projects.”
DFC’s Chairman, Henry N. Anderson shared, “With a facility like this, it allows the DFC to lend to Small and Medium Enterprises without taking land collateral (for EE/RE Investments), and we can lend at lower interest rates. We don’t require collateral because we, the DFC, now have a partial guarantee under the CRAF facility, and what it does for the entities with an energy efficient project, you save; and so by saving, it creates the cash flow to repay the loan – so it is a real win-win situation for all parties involved.”
DFC expresses sincere gratitude to the CDF – its development partner, to the National Focal Point for CDF – CEO Osmund Martinez and the staff of the Ministry of Economic Development for facilitating another landmark project for Belize.
For more information, contact:
Climate Champion | Consultant – Development Finance Corporation
822-2350 / 2360