DUSHANBE, December 23, 2015, Asia-Plus – The Humo microfinance institution (MFI) will be the second partner of the European Bank for Reconstruction and Development (EBRD) in Tajikistan under innovative facility that promotes climate resilience.
According to the EBRD Dushanbe Resident Office, the Bank is aiming to help households and businesses in Tajikistan cope with the effects of climate change through a loan to Humo, the third-largest non-bank microfinance institution in Tajikistan.
The US$ 2 million-equivalent credit line will be provided by the EBRD and the Pilot Program for Climate Resilience (PPCR) in equal measure in Tajik somoni.
The loan is the second one provided under a pioneering financing facility, launched on 1 December, as world leaders gathered in Paris for the COP21 climate talks. It is the first financing mechanism in the EBRD region dedicated to projects which help adapt to the effects of climate change.
The first country to benefit from this financing facility is Tajikistan, which depends on rainfall and glaciers for its water supply and electricity, and consequently is highly vulnerable to the impacts of climate change.
Humo has a strong presence outside the capital Dushanbe and in rural areas and serves micro, small and medium-sized enterprises, including small farmers and households which often have no other source of financing. The MFI will on-lend funds to help clients adopt technologies and practices to reduce soil erosion and pressure on water and energy resources.
In addition to funding, the project will benefit from technical assistance funded by the UK government through the Department for International Development (DFID) and by the EBRD Early Transition Countries (ETC) Fund.
Earlier this month, Bank Eskhata became the first recipient of an EBRD loan under the new financing facility.
The EBRD already offers successful credit lines for energy efficiency and small-scale renewable energy in most of its countries of operations. Ahead of the COP21 climate talks in Paris, the EBRD adopted new higher targets for climate financing and aims to invest 40 per cent of its annual volume into sustainable resource projects by 2020.
