Green Finance among MFIs and NGOs
Developing countries face climate change problems in different ways. In Yemen, the environmental treatments for these problems greatly differ, affecting the overall lives of Yemenis, especially with the floods that occurred last summer due to the heavy rains and hurricanes that hit the south and southeast of Yemen; the latest of which was ‘cyclone Luban’, which led to losses at the level of infrastructure, erosion of agricultural lands, and uprooting trees, as well as excessive deforestation owing to the lack of cooking gas and its high cost to Yemenis. The high humidity and temperatures, specifically in coastal areas, have considerably influenced the comfort of the population, especially the vulnerable groups with no access to energy that helps reducing climate effects.
There are some efforts being made by microfinance institutions (MFIs) and non-governmental organizations (NGOs) that endeavor to reduce the effects of these problems, in particular to provide livelihoods for the neediest groups in Yemeni society. We can call them green financing projects, which aim at achieving sustainable development by reaching economic growth that lessens carbon emissions, brings waste down, and improves efficiency of natural resources (OECD). This actually is a model that directs community towards environmentally friendly investments and fulfills the goals of sustainable development 2030.
The Yemeni humanitarian crisis aggravated the need to attain a sustainable economy as the war has destroyed many livelihood sources. NGOs have a big role in alleviating people’s suffering through food for assets projects, cash for work programs, and economic empowerment projects for farmers and fishermen from vulnerable groups that were funded by international organizations. These projects have alleviated the deteriorating economic situation and put a large group of beneficiaries on the right path to rely on their new capabilities.
Moreover, there has been an effort empowering the vulnerable groups by MFIs that have made huge efforts to mitigate the suffering of small and medium projects owners, farmers, and fishermen. All of which was done by providing affordable small loans enabling them to continue and develop their businesses. On top, the support reached the stage of defaulters’ exemption to let them continue. Recently, after the Covid-19 virus outbreak, NGOs and MFIs intensified support for environmentally friendly projects in a clear effort to mitigate climate change and highlight commitment towards achieving sustainable development. To illustrate, Al-Amal Bank for Microfinance contributed, since 2020, to financing 550 projects with a value of 1.5 billion Yemeni Riyals. In 2021, it generously financed 329 agricultural projects with a value of 505,156,000 million YRs, all in rural areas.
Additionally, 8,400 agricultural projects were funded until November 2022 from Azal Microfinance Program. Besides, UNOPS has funded the emergency project to access energy, which targeted poor rural families who do not have access to lighting. Successfully, high-efficiency solar energy systems were distributed in 2021 in 6 governorates to 550 beneficiaries for a total amount of 8,554,000 Yemeni riyals.
FAO indicates that the food and agricultural sectors are responsible for a third of the total greenhouse gas emissions, yet they are strongly affected by climate change. Therefore, agriculture must form part of a sustainable solution to climate change. It is working in Yemen on this issue through green financing for environmental agriculture, withstanding climate change that will reverse the path of biodiversity loss, control emissions, adaptation, and resilience. Indeed, these efforts would promote sound ecosystems and healthy food patterns. This green financing obviously applies to all sectors, such as fisheries, biodiversity, conservation of water resources, and reclamation of agricultural lands.
Since the end of 2019, Neshwan, a chemical engineer, and his friend, Wed who is an IT engineer, began implementing a project notion of treating solid wastes resulting from the sawdust and animal feces. More, the remainder of energy generation process, producing 100kWh, is used as natural fertilizer for farm plants around the station. Beneficiaries reached 44 in Lahj province, South of Yemen.
Neshwan said that the launch of the project was supported by green funding from UNDP, and that their project was the first in Yemen and the whole region. "In this process, waste treatment aimed at reducing environmental pollution resulting from fossil fuel power generation and providing job opportunities for youth. The entire project is an idea that can be intelligently expanded." He clarified. Wed added, "At the end of last year, we saw our project on reality after two years of continuous work and persistence, despite the impact of the Corona pandemic on life and projects. I am proud of myself, my friend, and the entire work team. This is the beginning of the path to complete dependence on clean energy, reducing climate changes, and obtaining the goals of sustainable development 2030.”
