Energy Efficiency Procredit Guarantee - Energy Efficiency Procredit Guarantee Subsidy Energy Efficiency Procredit Guarantee The proposed intervention falls under the Results Strategy for Sweden’s reform cooperation with Eastern Europe, Western Balkans and Turkey, 2014-2020. The support areas relevant for this contribution are Enhanced economic integration with the EU and development of market economy, as well as,Competitive small and medium-sized enterprises make up a greater share of the economy.

The envisaged contribution is a Sida USAID loan portfolio co-guarantee intended to promote access to finance for Micro Small and Medium sized enterprises (SME) in Bosnia and Herzegovina (BiH), working in the productive sector to encourage increase production, access to export market, job creation and improve overall economic growth. The guaranteed party is ProCredit Bank. 

The total guarantee facility, which is non-revolving, is US $5,756,805. Sida's share is US $2,500,000 and USAID US $3,256,805. Sida's guarantee ceiling is 22,825,000 SEK at 9.13 USD/SEK exchange rate which represents Sida’s maximum liability. Sida's and USAID's risk coverage is up to 60%. 

A particular focus will be on Green Loans, defined as loans with a purpose to be invested in Renewable Energy (RE), Energy Production (EP), as well as, Resource Efficient and Cleaner Production (RECP). The estimate is that about 20 percent of the loans (disbursed amount) under the guarantee will serve investments for green purposes. Den föreslagna insatsen faller under Sida's resultatstrategi för reformssamarbetet med Östeurpoa, Västra Balkan och Turkiet, 2014-2020. 
Supportområden relevanta för insatsen är utökad ekonomisk integration med EU och utveckling av marknadsekonomi, samt större andel konkurrensmässiga små och medelstora företag som en del av ekonomin.

Den planerade insatsen är en portföljgaranti i samarbete mellan Sida och USAID för att främja tillgång till finansiering för små och medelstora företag (SME:s) i Bosnien och Hercegovina (BiH), vilka är aktiva i produktiva sektorer för att främja ökad produktion, tillgång till exportmarknader, arbetsskapande samt för att förbättra den ekonomiska tillväxten över lag. Garantitagare är ProCredit Bank. 

Den total garantifaciliteten som är icke revolverande är 5 756 805 USD. Sida:s del är 2 500 000 USD och USAID 3 256 805 USD. Sida:s garantitak är 22 825 000 SEK vid en kurs om 9,13 USD/SEK vilket representerar Sida:s maximala åtagande. Sida och USAID täcker risk under garantin upp till 60%. 

Ett särskilt fokus inom insatsen är främjandet av gröna lån som definieras som lån med syfte att investeras i förnybar energi (RE), energiproduktion (EP) och resurseffektiv och renare produktion (RECP). De gröna lånen förväntas utgöra cirka 20% av lånen under garantin (utbetalat belopp). Through the provision of a Sida-USAID co-guarantee to ProCredit Bank in Bosnia Herzegovina, the objective is to facilitate the access to finance for SMEs that often lack requirements of collateral. To promote the access to finance for SMEs is expected to contribute to much needed growth and employment in BiH, as well as, to support higher levels of export. The contribution is also aimed at increasing the share of competitive SMEs in the economy.  
Expected Results: The overall aim is to increase economic development and job creation through increased lending to the under served high growth potential SMEs in sectors that the Guarantee targets.The expected outcome upon expiration of the guarantee is:- Expansion of the borrowing enterprises in terms of scale of operation, profit, number of employees etc.- increased and continued lending to the target groups, esp SMEs with green investments, upon expiration of the guarantee by the partner banks and other lenders- Lower requirement for collateral for the borrowers by lenders, and generally improved loan conditionsDesired impact:- Demonstrate to the rest of the financial sector the market for SME loans for business expansion, including green lending, where collateral requirements and lack of capital markets is a problem for the SMEs.-The development impact is that increased access to credit will promote development and upscaling (into higher value chains) of the productive SMEs, leading to economic growth and more employment opportunities.
Apart from utilization percentages, and economic sector distribution (20% target of green lending) other targets are not seen to be part of the results dialogue with the bank as it utilizes the guarantee. Therefore the result framework has only two main indicators.  One on utilization and the other on green lending to SMEs.  Neither target is contractual, i.e. inserted into the agreement.  Rather both targets are established and monitored through dialogue. 
What this means practically is that impact can only be measured through an evaluation and not through regular monitoring of the bank's guaranteed portfolio.     
Previous USAID guarantees were independently evaluated and confirmed to have increased employment 50% on average for business with guarantees loans (USAID DCA in Kenya)  In Haiti, 87% of guaranteed borrowers were able to continue financing after the guarantee ended. 
An evaluation would be needed in BIH to measure and verify that similar achievements are possible in Bosnia Herzegovina.  Of course the level of ambition needs to be adjusted to the overall context (size of companies, export potentials, guarantee volumes, presence of other instruments, and a long list of other factors). 
After such an evaluation (which probably should be conducted in 2020) it would be possible to establish a realistic baseline and targets for future guarantees.