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Expert group meeting of financial engineering instruments to promote cleaner production investments

Kaunas/Paris /Nairobi, November 1999 - How to prepare creditworthy investment proposals to financial institutions for small- and medium-scale industrial projects that would be good and efficient business without depleting resources and burdening the environment.

The Division of Technology, Industry and Economics of the United Nations Environment Programme (UNEP/TIE) has recently started the implementation of the project "Strategies and mechanisms for promoting cleaner production investments in developing countries" to address this issue. The project is funded by Norway.

One of the challenges of the project is to develop tools and instruments that can be transferred to financial and service institutions to gradually integrate cleaner production into the due diligence process for investment. To review experience gained in related pilot projects and to compare tools currently used by those creating and assessing investment plans in SMEs, UNEP/TIE organised an Expert Group Meeting.

The Meeting, held in Lithuania from 18 to 20 October 1999, was hosted by the Institute of Environmental Technology (Apini) of Kaunas University of Technology, which has extensive experience in identifying, preparing, promoting and monitoring credits for the implementation of cleaner production investments.

The Meeting brought together financial, accounting and cleaner production/pollution prevention expertise from the public and private sectors. The experts discussed financial engineering tools to address less tangible items usually omitted from project analysis, time horizons for calculating profitability and other related issues. They also tested an eco-efficiency software tool for financial analysis and made recommendations on the curricula of interactive training activities of the project.

To increase the demand for bankable cleaner production investments to financial institutions, lessons learned at the Expert Group Meeting will be transferred to the demonstration countries selected for the project. This will start in Zimbabwe in January 2000 and continue in Tanzania and Vietnam soon thereafter. It will be supplemented by the introduction of a software to facilitate calculations, comparison of different scenarios and impact of parameters, training, and promotion of the portfolio of investment proposals that will gradually emerge as the field activities progress.

Banks and other lenders are looking for good investments projects with low risk, reasonable cash flow and efficient management. Cleaner production options often provide a potential win-win solution. The brainstorming session in Kaunas resulted in a focussed menu of methods to show the economic merits of this solution. These methods will now be tested and adapted before wider dissemination.

For more information, please contact:
Mr. Ari Huhtala,
Project Manager (CP Financing),
UNEP Division of Technology, Industry and Economics,
Tel. +33-1-4437-1431, fax: 33-1-4437-1474,
e-mail:, webpage:

UNEP Information Note 1999/34

Thursday 11 Nov 1999
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