Why is this catalytic financing initiative needed, both globally and in North Macedonia?
Financing for sustainable development is facing a critical inflection point. With a US$4 trillion annual gap in SDG financing, the international community is struggling to align financial flows with development needs. Traditional financing systems—largely shaped in a different era—are not delivering for today’s world, especially in countries experiencing overlapping crises. While efforts to reform the global financial architecture are underway, including through the Bridgetown Initiative and the Pact for the Future, countries urgently need tools that can deliver results now.
In North Macedonia, the urgency is real. Skopje, our capital, suffers from some of the highest air pollution levels in Europe. Meanwhile, energy costs continue to strain household budgets and business operations. Small and medium-sized enterprises and underserved households often lack access to affordable finance for clean energy solutions, further deepening inequality.
This is where the Green Financing Facility (GFF) comes in. The GFF was created to close the gap between ambition and access—to help North Macedonia shift to cleaner, more inclusive growth by mobilizing capital for renewable energy and energy efficiency, especially for those traditionally left behind.
How does the programme work in practice?
The Green Financing Facility operates through a multi-layered model that brings together government, the United Nations system, development banks, and local financial institutions. At the center of the mechanism is a €30 million credit line provided by the European Bank for Reconstruction and Development (EBRD) to local commercial banks. These banks—including Sparkasse, ProCredit, Silk Road Bank, and others—on-lend the funds to small businesses and households who wish to invest in green technologies.
Once projects are completed and verified, beneficiaries receive performance-based grants—up to 10 percent cashback for small businesses, and 30 percent for households. These financial incentives lower repayment burdens and help de-risk investment for first-time adopters. The loans are complemented by technical assistance, helping both banks and clients identify viable, cost-effective solutions.
The programme is implemented by UNDP as the lead technical agency, alongside IOM and UNECE. My office, as UN Resident Coordinator, provides system-wide coordination, ensuring that all efforts align with national priorities and SDG financing frameworks. The Government of North Macedonia, through the Prime Minister’s Office and key ministries, provides strategic direction and oversight, embedding the GFF into broader policy and institutional frameworks.
Critically, the programme was designed with inclusion at its core. It prioritizes women-led households, single parents, families with persons with disabilities, Roma communities, returning migrants, and small businesses. By expanding access to finance and offering tailored support, the GFF ensures that the clean energy transition is not only climate-smart—but also fair and equitable.
What results have been achieved so far—and what lessons are emerging?
By May 2025, the Green Financing Facility had disbursed over $15.8 million in green loans, supporting a total of 115 investment projects across households and enterprises. This includes 57 projects from small and medium-sized enterprises—spanning sectors such as transport, energy, manufacturing, retail, and medical services—and 58 underserved households, including those led by women, single parents, persons with disabilities, and returnees. The initiative has enabled the installation of nearly 5 megawatts of renewable energy capacity and is expected to avoid over 4,100 tons of CO₂ emissions annually.
The results demonstrate that when public and private actors work together—under a unified strategy—systems can shift. We’ve seen how local banks can become enablers of sustainability when equipped with the right tools and incentives. We’ve learned that performance-based grants can drive behavior change. And we’ve confirmed that when financial solutions are tailored to meet people where they are uptake increases, and impact multiplies.
Most importantly, the GFF has reinforced the value of the Resident Coordinator system as a platform for aligning UN expertise, government ownership, and international financing in a way that truly accelerates progress on the ground.
What message does this send to the global community for the FFD4?
North Macedonia’s experience with the Green Financing Facility sends a clear and timely message: catalytic financing works when it is country-led, inclusive, and backed by strategic coordination. As the world prepares for FfD4, we urge the international community to shift from piloting ideas to scaling what’s proven. The GFF is not a hypothetical model—it’s a living example of what’s possible when capital, policy, and people move in unison.
We need more concessional capital to unlock private investment. We need stronger support for countries to develop and implement Integrated National Financing Frameworks. And we need a bold recommitment to financing mechanisms that leave no one behind.
In North Macedonia, we’ve shown that even a small country can lead the way with the right mix of vision, partnership, and tools. The opportunity now is to take this model further—not only for us, but for the region, and for every country seeking a fairer, greener, more sustainable future.
Note
All joint programmes of the Joint SDG Fund are led by UN Resident Coordinators and implemented by the agencies, funds and programmes of the United Nations development system. With sincere appreciation for the contributions from the European Union and Governments of Belgium, Denmark, Germany, Ireland, Italy, Luxembourg, Monaco, The Netherlands, Norway, Poland, Portugal, Republic of Korea, Saudi Arabia, Spain, Sweden, Switzerland for a transformative movement towards achieving the SDGs by 2030.
