MICROCAPITAL BRIEF: Germany’s Gemeinschaftsbank für Leihen und Schenken (GLS), Federal Ministry for Economic Cooperation and Development (BMZ) Together Invest $34m in Green for Growth Fund Southeastern Europe (GGF)

Gemeinschaftsbank für Leihen und Schenken (GLS), a German bank that focuses on investing in social and ecological projects, reportedly has invested EUR 22 million (USD 23 million) in the Green for Growth Fund Southeast Europe (GGF), a Germany-based fund that invests in energy efficiency (EE) and renewable energy sources. The German Federal Ministry for Economic Cooperation and Development (BMZ) has also invested EUR 9 million (USD 10 million) in GGF. The additional capital is expected to be used to finance energy efficiency and “small scale” renewable energy projects for businesses and households via retail financial institutions within southeast Europe.

BMZ is also donating EUR 1 million (USD 1.1 million) in the GGF’s Technical Assistance Facility. These funds are expected to be used to assist partner institutions with developing financing instruments for energy efficiency and renewable energy projects, as well as to help design and implement such projects. The funds will also be used to increase public awareness of the benefits of investments in renewable energy and energy efficiency.

With these investments, GGF has grown to hold EUR 28.5 million (USD 30.2 million) in  private capital, accounting for approximately 10 percent of the fund’s total capital.

As of 2014, GGF operates in 13 countries in southeast Europe. GGF reported total assets of EUR 242 million (USD 326 million), a gross loan portfolio of EUR 170 million (USD 229 million) and net annual profit of EUR 430,000 (USD 579,000) as of December 31, 2013. As of December 2014, BMZ reported total assets of EUR 6.44 billion (USD 7.37 billion). As of 2013, GLS had total assets of EUR 3.2 billion (USD 4 billion), deposits of EUR 2.8 billion (USD 3.5 billion), a gross loan portfolio of EUR 1.7 billion (USD 2.1 billion) and 165,000 customers.

By Makai McClintock, Research Associate

About Gemeinschaftsbank für Leihen und Schenken (GLS):
Gemeinschaftsbank für Leihen und Schenken (GLS) was established in 1974 by Wilhelm Ernst Barkhoff and Gisela Reuther under an “ethical” model that focuses on investing in social and ecological projects. Among other efforts, the bank finances sustainable energy programs, housing programs for people with low incomes, and the operations and capital needs of small and medium-sized enterprises (SMEs). As of 2013, GLS had total assets of EUR 3.2 billion (USD 4 billion), deposits of EUR 2.8 billion (USD 3.5 billion), a loan portfolio of EUR 1.7 billion (USD 2.1 billion) and 165,000 customers.

About Green for Growth Fund (GGF):
Germany-based Green for Growth Fund, Southeast Europe (GGF) focuses on extending the use of renewable energy sources and enhancing energy efficiency in Southeast Europe. GGF finances and refinances energy efficiency initiatives and invests in small to medium-scale renewable energy projects. Furthermore, GGF offers technical support and funding to local financial institutions. GGF was established in 2009 by Germany’s Kreditanstalt für Wiederaufbau (KfW) and the Luxembourg-based European Investment Bank (EIB) with the financial support of the EU’s European Commission, the German Federal Ministry for Economic Cooperation and Development (also known by its German acronym BMZ), and the European Bank for Reconstruction and Development (EBRD). As of 2014, GGF operates in 13 countries: Albania, Armenia, Azerbaijan, Bosnia and Herzegovina, Croatia, FYR Macedonia, Georgia, Kosovo, Moldova, Montenegro, Serbia, Turkey and Ukraine. GGF reported total assets of EUR 242 million (USD 326 million), a gross loan portfolio of EUR 170 million (USD 229 million) and a an annual profit of EUR 430,000 (USD 579,000) as of December 31, 2013.

Sources and Additional Resources:

GGF Press Release: BMZ Invests Further EUR 10 Million in GGF

GGF Press Release: EUR 22 Million GLS Bank Investment in GGF Fuels Green Energy Finance

MicroCapital Universe Profile: Gemeinschaftsbank für Leihen und Schenken (GLS)

MicroCapital Universe Profile: Green for Growth Fund (GGF)

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