In Peru, micro and small enterprises (MSEs) are usually operated from homes and provide 75 % of Peruvian employment. However, they are losing competitiveness due to high energy costs (US 11 cents / KwH) and disruptions in energy supply.
Under the EcoMicro Programme, The IDB-MIF is providing support to the municipal saving bank, Caja Arequipa (CA) to improve micro and small enterprises’ competitiveness through the reduction of energy costs, by developing green loan financing.
A Market Study revealed that only businesses of a large scale are able to afford reliable renewable energies; and that Energy efficiency savings were more appealing to micro and small entrepreneurs compared to renewable energy.
An Assessment of CA’s loan portfolio vulnerability to climate change showed high agricultural vulnerability, particularly for livestock. The assessment mapped climate change risks and their specific impacts on CA’s clients in their specific geographical areas; and a tool was designed to manage these risks and to assist CA’s strategic decision-making. Caja Arequipo therefore designed and offered loans (mainly rural credit products) that were specific to their clients’ needs. Three case studies show how clients benefited.
Since it is important to reduce institutional vulnerability as well as client vulnerability:
• 150 members of Caja Arequipo’s staff were trained in adaptation; energy efficiency and greening of the agency; and 90 energy efficiency audits of their headquarters and satellite offices throughout Peru were conducted.
• An environment policy was developed and included specific recommendations to improve energy efficiency - including the insulation of walls and floors, installation of double glazed windows and use of energy efficient and solar energy equipment. The policy was formally adopted by the agency, demonstrating its commitment to reduce its carbon footprint!