EC&EE Financing Support Programme
Policy measure

According to the Global Environment Facility (2004), the programme Promoting Energy Conservation in Small and Medium Enterprises (PECSME) was approved in 2003 as part of the Vietnam Energy Conservation Program (VECP). The programme was carried out jointly with the United Nations Development Program (UNDP).   


The aim of the PECSME programme is to remove barriers to the uptake of energy conservation technologies, improve management’s focus on energy cost reductions, enhance technician training in energy conservation practices and improve the operation of energy using equipment by SMEs (GEF, 2004). The PECSME programme focuses on the following five SME sectors: bricks, ceramics, textiles, paper and food processing. The total costs of the PECSME programme amount to USD 29.227.250 (GEF, 2004).


Component 5 of the PECSME programme EC&EE Financing Support Programme involves capacity building and support for enhanced EC&EE project investment through a risk-sharing loan guarantee funding mechanism utilizing existing environmental, donor and commercial bank funds” (GEF, 2004). The total costs of implementing Component 5 were estimated to USD 3,545,000. (GEF, 2004)

Implementation

In general, the PECSME Fund comprises USD 28.7 million in total, including USD 5.5 million from Globe Environment Facility (GEF) funds, USD 3.7 million from local and state sectors and USD 19.1 million from the business sector (banks and enterprises). (Nguyen, 2010)

Challenges
No identified challenges.
Outcomes

The objective of the programme was to mobilize the necessary funding for SME EC&EE investments through loan guarantee funds by Year 2 and the development of a sustainable financing system for future SME EC&EE projects by Year 5. According to Nguyen (2010), the Loan Guarantee Fund (LGF) has been effectively operating, guaranteeing a total value of VND 27.3 billion between 2006 and 2010.


A Mid-Term Evaluation Report conducted by UNDP in 2008 shows that the Loan Guarantee Fund has provided SMEs access to loans from commercial banks (Vietinbank) or government funds (VEPF) that are 75 percent guaranteed by the project’s Loan Guarantee Fund (LGF).

References

GEF (Global Environment Facility), 2004. Promoting Energy Conservation in Small and Medium Enterprises. 5th JPO Regional Workshop, Hanoi, 17 June 2004. Available at: www.jposc.org/documents/workshop_hanoi_field_visit.pdf. 


UNDP (United Nations Development Programme), 2008. Evaluation of UNDP/GEF Project: Vietnam – Promoting Energy Conservation in Small and Medium Scale Enterprises (PIMS 2057). Mid-Term Evaluation Report.


Nguyen, Ba Vinh (2010). Project: Promoting Energy conservation in Small and medium scale enterprises in Vietnam: Results and lessons learnt. Sub-regional Workshop for GEF Focal Points in Asia, Hanoi, Vietnam, 10-12 March 2010.