Catalyzing Renewable Energy Adoption by Small-Scale Cambodian Agri-businesses
A pilot program that has made 15 investments with an aggregate loan value of just over USD 260,000 and average ticket size of USD 17,000
Loan payments terms are designed around the cost savings a farmer can expect from switching to renewable energy
Nexus for Development launched the Clean Energy Revolving Fund (CERF) as a climate change mitigation project in 2016.
CERF loans focus specifically on the energy usage patterns of small and medium agri-businesses (SMAs) in Cambodia. CERF catalyzes the adoption of clean Renewable Energy (RE) technologies by SMAs by calculating and explaining to SMAs how much they can save on energy costs by switching to RE technology. CERF loan repayment schedules are adjusted to match agricultural production cycles and the individual farmer’s expected cost and energy savings. By providing flexible financing terms, CERF encourages an early shift away from fossil fuel-based energy and increases food processing productivity, helping producers, processors, and distributors to compete in the regional economy.
The CERF is a pilot debt fund made possible through grant contributions from the Renewable Energy and Energy Efficiency Partnership (REEEP), the Austrian Government and the Blue Moon Fund.
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Insights and Learnings
Repayment structures linked to agricultural cycles lower the risk of default
A stringent due diligence process can prepare these entrepreneurs for future loans from more traditional lenders and allows borrowers to start building a credit history