As an island nation, Antigua and Barbuda is vulnerable to the impacts of climate change and, despite recent classification as a middle-income country, pockets of poverty heighten this risk for some parts of society. Recognising this challenge, the Sustainable Island Resource Framework (SIRF) Fund was established in 2019 as a financial vehicle to deliver climate and environment-related projects and programmes both domestically and across the Eastern Caribbean.
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Following the success of its micro-financing Revolving Fund Programme for Adaptation, the SIRF Fund is looking to expand financial support beyond concessional loans, and offer additional forms of concessional capital to support small and medium-sized enterprises (SMEs) to decarbonise and become more resilient to climate change. The aim is to target the most climate vulnerable sectors and most vulnerable SMEs first and, in doing so, improve resilience to climate change, gender equality and productivity.
This report discusses how the Government of Antigua and Barbuda can develop a gender-responsive, micro-equity, blended financing facility to be delivered by the SIRF Fund. Informed by inclusive stakeholder consultations across the government and financial sectors, and a defined sample of vulnerable agricultural SMEs, it offers design recommendations for a gender-responsive, micro-equity, blended financing window (BFW) that will provide financial and technical assistance to SMEs in Antigua and Barbuda that are impacted by climate change and seeking to adapt to it, and/or have the potential to avoid or reduce greenhouse gas emissions and are seeking to transition to low-carbon practices in line with Antigua and Barbuda’s Nationally Determined Contributions (NDCs) targets.
Specific targets are:
- a 25 per cent increase in access to financing for businesses related to the transition to a low carbon, high resilience economy by 2030
- a 20 per cent increase in the number of women-led businesses implementing renewable energy and adaptation interventions by 2030.
The BFW comprises the following.
- A technical assistance grant package covering pre-application advice; technical, financial and business development support; plus gender and inclusion training.
- An in-kind micro-equity investment for the adoption and transfer of climate smart/renewable technology (of up to EC$500,000 or US$185,000). The insured technology remains the property of the SIRF Fund until the full cost of the technology is recovered, and legal ownership is then transferred to the SME according to an agreed flexible, long-term schedule of market price-linked in-kind or cash repayments via accredited channels.
- A concessional financial loan (of up to EC$500,000 or US$185,000) at 2 per cent interest rate is repaid according to an agreed schedule.
Due to the heightened vulnerability of women to climate change, compounded by persistent challenges in women’s access to finance, gender-specific portfolio-level financial and eligibility targets were established: 40 per cent of the financial portfolio will be awarded to SMEs in which women comprise 30 per cent or more of the owners, management or staff.
