The fundraising for creating green projects
Projects have always been set up in various fields, thus providing a service to the community either to meet new needs or to make up for shortcomings. Also, in recent years, in response to the growing awareness of the ecological emergency, more and more so-called “green projects” are being created. Thus, in 2019, the European Investment Bank (EIB) has set itself the objective of investing 1,000 billion euros in green projects for the period 2020-2030. However, a problem remains, that of knowing how these new types of projects are financed?
I- What is a green project?
A project is a finalized set of activities and actions undertaken by a team led by a project manager, with the aim of meeting a specific need defined by a contract within a set timeframe and within the limits of an allocated budget.
It is, therefore, a one-off operation with a beginning and an end, requiring the implementation of human and material resources for its realization.
A Green Project, also known as a sustainable project, is, therefore, a project that has the same characteristics as an ordinary project, but which, unlike an ordinary project, seeks a sustainable development objective, which is one of the main differences. The objective here is to guarantee the protection of the environment and natural resources, social and economic equity.
However, a distinction must be made between green projects and green projects. Indeed, whereas in the first, the aim is essentially to measure, prevent, control, correct (negative) impacts and damage to the environment, in the second, the aim is not truly environmental, but it integrates new competences aiming to take into account the environmental dimension in a significant and quantifiable way.
II- How are green projects financed?
In the framework of a Green Project, the mobilization of Green funds supposes the financing of a Green Project by Bodies, entitled to finance Initiatives and projects wishing to achieve Sustainable Development.
But who are these authorized bodies? The list is not exhaustive, both public and private investors can finance a project. We can cite the United Nations Development Program (UNDP), the United Nations Environment Program (UNEP), the African Development Bank (ADB), the Green Fund for the Environment, the World Bank, the European Environment Agency, the United Nations Framework Convention on Climate Change, the Climate Capital Partner and the Global Environment Facility.
In addition to these, it is not uncommon to see more and more state bodies financing green projects, they are also financed by participatory financing, or “crowdfunding”.
However, it is not impossible that an individual or a structure will self-finance their Green Projects.
The mobilization of funds for a Green Project allows a good follow-up of the project leaders but above all a sober economic growth.
The mobilization of funds for a Green Project is subject to certain stages: the finalization of the project, negotiations, financing.
As far as financing is concerned, it can be released in full or gradually during the execution of the project. Project leaders can be accompanied by an accreditation agency, or else request authorization from a designated national entity.
Whether turning waste into fuel or making clothes out of plastic, one thing is certain, these projects do good for the environment; and, their funding by these bodies provides an incentive to develop further.