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Ministry of Finance and MFK, KCGF signed Letter of Intent to start commercial financing of up to 25 million euros for renewable energy and energy efficiency projects

25/09/2020

The Ministry of Finance (MoF), the Millennium Foundation Kosovo (MFK) and the Kosovo Credit Guarantee Fund (KCGF) have signed a Letter of Intent to start commercial financing of up to 25 million euros for renewable energy and energy efficiency projects. The parties signed the Letter of Intent in the presence of the Millennium Challenge Corporation (MCC) and the Delegation of the International Finance and Development Corporation (DFC), of USA, who were visiting Kosovo in to advance cooperation and economic development. The US DFC will work closely with MFK, KCGF and MoF in providing financial instruments that will reduce the risk of bank guarantees for the KCGF Renewable Energy Window and other banking partners.

During the meeting, the parties reaffirmed their efforts and commitment to strengthen cooperation in launching the New Window of Bank guarantees product for investors in renewable energy, which will be provided by KCGF. The creation of the Window is considered an important step in introducing financing for private sector projects in the banking environment in Kosovo. Furthermore, the project is considered to be of great importance for the package of economic measures aimed at mitigating the negative impact of the COVID-19 pandemic on the economy of Kosovo.

Hykmete Bajrami, Minister of Finance in the Republic of Kosovo stated that “The Government of Kosovo is focused on helping the private sector in order to provide the capital and guarantees needed to generate growth and employment but also to promote innovative solutions in the financial sector. We appreciate the hard work done by KCGF and MFK to make this Window a reality and we thank MCC for the financial support provided so far to KCGF. Furthermore, we are ready to work with DFC to provide the necessary safeguards mechanisms towards reducing the overall risk and interest rates for Kosovar companies” asserted Mrs. Bajrami.

 

Sarah Olmstead, Director of MCC for Kosovo asserted: We are pleased to have the opportunity to support the private sector at a crucial time for Kosovo’s economic recovery. This project will not only provide financial support to entrepreneurs in the field of energy, but will also support the banking sector, which we believe will bring great benefits for economic development and job creation in the future.

Petrit Selimi, Chief Executive Officer of MFK stated that  “Today marks an important moment in confirming the multilateral cooperation that is adding value to our work in Kosovo -  by connecting the private investors, the banking system and Kosovo institutions in a way that will unlock new capital and link needed investments in renewable energy and investments in energy efficiency”

Last year, MFK signed an agreement with KCGF to establish a new Guarantee Window for private sector investment in independent energy generation and other energy investments. MFK has also signed a contract with Financial Markets International, Inc. (FMI) based in the US to begin implementation of this project, with support from MCC. This project aims to support KCGF, Renewable Energy EPPs and local banks, by focusing on three complementary interventions in order to increase financing of solar energy.