MICROCAPITAL BRIEF: Green for Growth Fund (GGF) Loans $1.7m to Microfinance Institution Alter Modus to Finance Energy Efficiency in Montenegro

Alter Modus, a microlender in Montenegro, recently agreed to borrow EUR 1.5 million (USD 1.67 million) from the Green for Growth Fund (GGF), a public-private partnership based in Luxembourg, in order to boost Montenegro’s energy efficiency (EE) finance market. GGF also aims to boost Alter Modus’ expertise in EE lending by providing the microfinance institution with technical assistance. This deal will increase the ability of Alter Modus to re-lend to existing clients in order to support reductions in energy usage and emissions at both residences and businesses. GGF previously disbursed a loan of EUR 3.1 million (USD 3.5 million) to Alter Modus in 2016.

Ana Kentera, CEO of Alter Modus, said, “the potential for investing in energy efficiency projects in Montenegro is growing year by year. By sensitizing the public on the benefits of energy and emission reduction measures, we are hoping to develop the sector in Montenegro. In this way, we affirm our position as a socially responsible institution that has recognized the importance of energy efficiency in raising the quality of life in Montenegro.”

Founded in 1999, Alter Modus offers loans ranging in size from EUR 1,000 (USD 1,130) to EUR 50,000 (USD 56,600) from 18 offices in Montenegro. The microlender’s loan portfolio amounted to EUR 46.7 million (USD 52.5 million) as of 2018. Its 21,000 customers are mainly microentrepreneurs, small enterprises, salaried employees and pensioners. The organization’s investors include Dutch investment manager Triple Jump, the UK-based European Bank for Reconstruction and Development, and the Luxembourg-domiciled European Fund for Southeast Europe.

GGF, founded in 2009 by the EU’s European Investment Bank and Germany-based Kreditanstalt für Wiederaufbau (KfW) Development Bank, supports financial institutions and small businesses in efforts to increase energy efficiency and promote the usage of renewable energy in Southeastern and Eastern Europe as well as in the Middle East and North Africa. The organization holds an investment portfolio of EUR 507 million (USD 567 million), distributed to 57 partner institutions in loans that range from EUR 1 million (USD 1.1 million) to EUR 40 million (USD 44.8 million). GGF’s investors include the World Bank Group’s International Finance Corporation; the Netherlands Development Finance Company, which is also known by its Dutch acronym FMO; and Germany-based Gemeinschaftsbank für Leihen und Schenken (GLS) Bank.

By Anna Gravois, Research Associate

Sources and Additional Resources

GGF press release
https://www.ggf.lu/pressnews/detail/ggf-grows-energy-efficiency-market-in-montenegro-with-additional-eur-15-million-loan-to-alter-modus/

Alter Modus homepage
https://altermodus.me/

GGF homepage
https://www.ggf.lu/

GGF 2019 fact sheet
https://www.ggf.lu/downloads/fact-sheets/

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