OPIC Loan Links Micro Borrowers to Clean Energy Products Through Carbon Markets
December 2, 2011
DURBAN, South Africa – Low-income populations’ access to clean energy products such as clean stoves for cooking and heating, water purifiers and solar lighting will be made easier and more affordable through a $10 million loan from the Overseas Private Investment Corporation (OPIC) to a financial intermediary which links the purchase of those products to carbon markets.
MicroEnergy Credits (MEC), based in Seattle, will use the OPIC loan to pay for the development of carbon credit programs with MEC’s partner microfinance institutions, which will offer clean energy products to low-income micro borrowers around the world. OPIC will be repaid by income generated through MEC’s sale of carbon credits in carbon markets using Emissions Reductions Purchase Agreements.
Micro borrowers will benefit from affordable access to new clean energy technologies which are not readily available in the market place. Those products will in turn reduce borrowers’ energy costs, improve their household health – for example, by reducing smoke inhalation caused by less efficient cook stoves – and enhance their productivity by extending their hours of business operation through the use of solar lighting.
“Making clean energy technology available to individual micro borrowers and micro entrepreneurs on a widespread basis is an important – and often overlooked – part of the international effort to reverse climate change,” said OPIC President and CEO Elizabeth Littlefield. “This landmark project has the potential to transform low-income populations’ access to affordable clean energy products, and in the process improve both their health and prospects for economic growth. Partnering with MicroEnergy Credits to deliver innovative financing through the use of carbon credits only makes the project more remarkable.”
April Allderdice, CEO of MicroEnergy Credits, said “we believe microfinance institutions, with their enormous market reach, have an important role to play in providing access to clean energy products and services to people at the bottom of the economic pyramid. OPIC’s investment will help MicroEnergy Credits accelerate our growth in high potential markets with significant unmet demand for affordable clean energy products.”