GREENPYME is a technical assistance program that provides small and medium-sized enterprises (SMEs) with expert advisory services including training and energy auditing to help them improve competitiveness and lower their energy costs.
In 2008, the Inter-American Investment Corporation (IIC) launched the GREENPYME Program. The goal was to compliment the basic mission of promoting the sustainable development of SMEs in Latin America and the Caribbean. GREENPYME helps SMEs improve energy efficiency, encourages them to use energy sources that are low in carbon emissions, and offers the tools necessary to implement energy-saving measures.
Helping overcome barriers
By providing direct technical assistance in cooperation with financial institutions and partners at the local level, the GREENPYME Program has been able to lower some of the main barriers to the sustainable development of SMEs, also thereby contributing to the mitigation of climate change in the long term. Despite the advantages that energy efficiency can have, a series of obstacles continues to block investment in energy efficiency. GREENPYME has been designed to deal with the main obstacles that block investment in energy efficiency measures by SMEs, including:
- Market barriers due to information asymmetry, market structure, and price distortions, all of which discourage investment in energy efficiency and lead to high project development costs.
- Financial barriers consisting of high initial investment costs, high-risk transactions, and high additional transaction costs; lack of awareness of the financial advantages on the part of financial institutions; lack of products designed for financing green practices and technologies; and insufficient information on the advantages of energy efficiency as a basis for making investment decisions.
- Barriers to information and understanding that include energy consumers’ lack of sufficient information and knowledge for making rational consumption and investment decisions.
- Regulatory and institutional barriers involving a lack of good incentives for promoting investment in energy efficiency instead of energy generation and the absence of regulations to incentivize demand-side investment.
- Technical barriers, including the high price of energy-efficient technology adapted to local conditions; the need for know-how and training in financial institutions to enable them to structure attractive investments in energy efficiency; and lack of awareness regarding the advantages of adopting energy-efficient technologies.
- Overcoming the barriers to energy efficiency will enable a reduction in dependence on fossil fuels and energy imports; improve commercial competitiveness; and reduce production costs, helping lower CO2 emissions by making the most of the possible advantages of carbon financing and improving public health by reducing pollution locally.
GREENPYME focuses on educating SMEs on the possible commercial, social, and environmental benefits of energy efficiency. It offers training to SMEs in the form of local workshops where they can learn from a practical perspective how to become both more competitive and more environmentally friendly. GREENPYME provides SMEs with the tools they need to analyze, direct, and implement energy efficiency projects. Investing in these measures is one of the most difficult barriers SMEs face due to the lack of know-how among banks and SMEs and the scarcity of long-term financing such investments require. To help overcome these barriers, GREENPYME offers energy audits to SMEs and helps local banks that participate in the program develop financial products.
Improving energy efficiency is considered one of the easiest actions to take to save energy. It is the least expensive method for companies seeking to reduce both operating costs and CO2 emissions. The following table suggests several more solutions for SMEs and lending institutions.