End-User Financing in Lebanon: The Case of Green Essence

Amidst an ongoing nationwide economic and fuel crisis in Lebanon and worldwide rising energy prices, many Lebanese businesses are struggling to stay in operation. Farmers in particular face rising oil and gas prices on a daily basis, which affects their ability to provide adequate irrigation of their production, interrupts transportation chains of their crops, and diminishes the purchasing power of their customer base. Commodities and daily necessities are priced out of reach for the average citizen, and sustainability or environmental protection concerns are pushed to the bottom of the list. Yet, WE4F’s innovators work hard to alleviate the burdens on the Lebanese population.  Green Essence is one of these businesses. The innovator offers renewable energy solutions for food and solar pumping processes to enable smallholder farmers to save money while combating environmental deterioration.  

Why End-User Financing

Renewable energy is often financially out of reach for low-income farmers. This is where Green Essence comes in with a financing model that decreases the monetary burdens on farmers and increases their resilience. After acquiring loans from investors, Green Essence offers end-user financing instruments to the farmers. The loan consists of a high down payment and an end-of-season lower payment, which decreases the interest load on the farmer. 

Green Essence also engages with marginalized populations. For example, they give trainings and recruit the Lebanese youth in public schools, which aids trainees’ activities as workers on the farms where the solar systems are installed. This contributes to promoting sustainability while empowering the farmers and supporting their livelihoods. 

Green Essence’s Saad Maakaron – presenting the latest technologies in the solar field under the title of “24 Hours of Sun” during a training event the company hosted on their premises in Zahlé in May 2022.

“Currently, there is no direct relation between the investor and the farmer. We are the medium: we are obtaining loans from the investor and offer end-user financing options for the farmers.” Francois Farage – General Manager 

Lessons Learned for Other Innovators

During fruitful seasons with high production, Green Essence was able to support farmers without major risks. However, as climate change continues to impact seasonal agricultural output, the current end-user financing approach is putting the innovator at risk. As production decreases, farmers are unable to pay the innovator back, which increases Green Essence’s interest load when repaying the investor. To reduce these risks and update their current end-user financing strategy, Green Essence is on the hunt for impact investors with a socially driven focus. A new investor will help accelerate their customer base and deploy other end-user financing models that decrease stakeholders’ vulnerability. Additionally, the innovator hopes to build bridges between the farmers and investors in order to be able to share the loan pay-back responsibilities with the farmer.      

Receiving support from WE4F’s Technical Assistance and Investment Readiness team plays a big role for Francois and his team: “WE4F is helping us find de-risking mechanisms which could help us compensate any first loss on loans that we give to our farmers (customers) who buy solar-powered irrigation pumps from us.” 

Explore End-User Financing

Would you like to learn more about end-user financing mechanisms and glimpse into case studies from WE4F’s own global pool of end-user-oriented innovations? Take a look at our End-User Financing Guidebook, fresh off the press, at: https://we4f.org/wp-content/uploads/2022/08/WE4F-End-User-Financing-Guidebook.pdf  

You can also read other innovators’ stories about their end-user financing: https://we4f.org/category/end-user-financing

Or watch our World Water Week session (which features Green Essence!): https://youtu.be/KdY2mqY14FE

Find out more about Green Essence’s work at: https://www.greenessencelebanon.com