MicroEnergy Credits (MEC) is a for-profit social enterprise that is reaching over 150,000 households with clean energy products worldwide. MEC helps microfinance institutions (MFIs) start clean energy programmes and supplement funding gaps through revenues realized in the carbon markets. The organization’s focus is to develop clean energy lending programmes together with MFIs, including solar lighting, efficient cooking, water purification, efficient housing and efficient heating. When clients implement emission reduction activities under the lending programmes, MEC manages the generated emission reduction rights and sells them on the carbon markets, passing the majority of the proceeds back to the MFIs involved. The carbon revenues are used by the MFIs to expand or sustain their clean energy lending programmes.

Operating under such a model, MEC is the CME of a number of PoAs registered under the CDM and the Gold Standard. After initial due diligence, MEC signs a partnership agreement with the MFI and provides a staff person at the institution for one to two years to help the organisation establish a financially sustainable clean energy programme that can operate under a carbon crediting scheme. The PoA platform is an effective way of facilitating project implementation as it reduces the transaction costs associated with setting up separate, individual project activities. Aside from benefitting from quick access to the carbon markets, MFIs also leverage the cloud-based carbon monitoring system (called Credit Tracker), which interfaces with the MFI’s core banking system and connects both the monitoring of the necessary usage parameters as well as the users’ financial records.

Not every MFI has the necessary financial resources at their disposal. Through engagement with MEC’s PoAs, the carbon markets become a scalable source of funding that enables MFIs to operate a clean energy lending programme on a sustainable basis. Carbon revenues are earmarked to finance client education and marketing, after sales service and maintenance, energy product supplier lines of credit, reducing interest or principal to the client and internal capacity building. By connecting MFI’s financing to the carbon markets, carbon revenues are thereby used as a catalyst to move MFI financed energy programmes forward.