2023-10-28 09:44:33
An annual green investment of $5 trillion by 2025 provides a benchmark for investment in the real economy to assess progress in greening the financial system.
The Tunisian Guarantee Company (Sotugar) hosted, on October 24 and 25, the 7e International Conference of Guarantee Companies and Programs in the Middle East and North Africa (MENA) region under the theme “Guarantee Institutions, Decades of Operations: Realities and Challenges”. The objective of this conference is to address the current economic situation.
Severely altered natural environments
In this context, Mounir Majdoub, expert, specialist in issues related to energy, environment and sustainable development, mentioned in his presentation the guarantee of own financing, friends of the environment and the green economy. He specified that 75% of the terrestrial environment and 66% of the marine environment are “severely altered” to date by human activities, including a 47% reduction in the extent and state of global ecosystems compared to their natural state. estimated.
According to him, around 60 billion tonnes of renewable and non-renewable resources are extracted worldwide each year, an increase of almost 100% since 1980. He also said that 87% of wetlands present in the 18th century were lost in 2000. The loss of wetlands is three times faster than the loss of forests. Majdoub also added that “transformative changes” are needed to restore and protect nature.
Special interests must be overcome for the good of all. To do this, it is imperative to “green” investments. Green investing is not just regarding climate change mitigation. Green investment is any investment that contributes to avoiding and reducing the impacts of economic activities on the environment (such as production and consumption) but also the restoration and regeneration of natural ecosystems, adaptation and climate resilience.
The climate capital deficit remains unchanged. An annual green investment of $5 trillion by 2025 provides a benchmark for investment in the real economy to assess progress in greening the financial system.
Restrictive monetary policies
Sustainable bonds include green, social, sustainable and sustainability-related bonds. The sustainable bond market is expected to show an upward trend in 2023, according to Crédit Agricole’s ESG Fixed Income research team. Global issuance of sustainable bonds might reach €880 billion in 2023, an increase of 30% compared to 2022. In 2008, the World Bank issued one of the very first green bonds in history. “Green” financing would require strong intervention from the State, international institutions and guarantee funds.”
For his part, Tahar Ben Hatira, president and CEO of “Sotugar”, presented a summary of the first day of this meeting, emphasizing that the governor of the Central Bank of Tunisia, Marouane Abassi, had recalled that “he It is now accepted that our low-income countries are evolving in a very complicated geopolitical and economic environment that is undergoing profound change, exacerbated by restrictive monetary policies. The financing of small and medium-sized productive and job-creating projects is the true vocation of the responsible economic and social role of banks and financing establishments.”
Jules Ngankam, general manager of the African Guarantee Fund (AGF) group, recalled in his intervention that only 5% of loans granted by banks are covered by a guarantee mechanism. It is therefore a challenge that all parties will have to work on.
Ben Hatira assured that Najla Bahr, executive director of the “Credit Guarantee Company in Egypt” (CGC Egypt) and president of the “Emgn” network, also drew our attention to the absence of a guarantee institution in certain countries such as Libya, Sudan and Syria. As such, we are launching an appeal to bring all our expertise to these countries to support them in any envisaged approach, especially since these are countries which are going through a period of crisis at different levels and the mechanism of guarantee is undoubtedly extremely necessary to support their economies. We join the call to converge efforts to achieve the objectives, adopt common standards, harmonize legal frameworks and design a more favorable and adapted legislative framework.
Convincing governments through risk sharing
The representative of the World Bank in Tunisia, Alexandre Arrobbio, for his part, reassured that the World Bank was on the verge of developing a suitable framework to allow much greater access to financing for SMEs. The challenge today is to convince governments to participate in risk sharing, as Marijana Oreb, vice-president of the European Association of Guarantee Institutions (Aecm), recalled during her online speech.
Rym Ayadi, president and founder of the “Euro-Mediterranean Economists Association” (Emea), stressed the importance of assigning a score to SMEs over time to monitor them and also to reduce the interest rate of guarantees like this was done in Europe during the pandemic to stabilize the market.
“The credit guarantee system must be backed by a clear legal framework which defines the mission, the mandate, the governance framework (which must be private), the sources of financing and above all the means of financing in a sustainable manner, the financial balance of the entire credit guarantee system,” proposed for his part Nabil Felfel, head of the Financial Stability Unit at the Central Bank of Tunisia.
The most important challenge is therefore how to bridge the financing gap and provide institutions and credit guarantee programs with the necessary financing in a sustainable manner to enable them to achieve their financial and economic objectives and achieve the desired social impact.
We must open the debate with the banks so that they are satisfied with the guarantees provided by the guarantee institutions. Because the development of small projects is a collective responsibility, reminded us Essam El-Quorashy, secretary general of the special account, Arab Fund for Economic and Social Development (Fades).
Homam Abdulaziz Hashem, general director of the Kafalah SME loan guarantee program (Saudi Arabia), mentioned that the experience of Kafalah has shown that women must also be at the heart of the process for their integration into the economic fabric and for job creation in our respective countries.
During the second day, the theme of “investment in the service of the environment and in the service of planet earth” was addressed. Faced with this state of emergency, as Jorge Fernando Figueiredo, president of the mutual guarantee company Agrogarante of Portugal, described it, “we must move towards green investments and we need guarantees in the face of the very high risks of small businesses who do not have sufficient capacity.
“The climate bank is BPI-France,” Virginie Poncet, from the public investment bank BPI-France, told us, which has a very rich offering and assistance for entrepreneurs in their energy investment efforts. To conclude, Tahar Ben Hatira, president and CEO of “Sotugar”, made it known that a change in the mentality of the financier must be evident in supporting innovation and Greens Tech, as also evidenced by the future green guarantee.
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