Financing Institutions

Financing institutions facilitate the green freight investments, instruments and mechanisms to mobilize green freight programs to reduce fuel use and emissions.

Many of the hindrances to establishing or to sustaining green freight programs can be traced back to either lack of information or lack of capacity. Available funding and resources from traditional sources such as the national or regional government budget may be inadequate for implementing green freight programs. Furthermore, shippers and operators have financing needs to purchase technologies and implement strategies, especially in developing nations where small and medium enterprises represent a large fraction of businesses. To ensure that green freight programs are realized, combining public and private sector budget with financial instruments, grants and loans will be necessary. Multilateral and national development banks can play key roles in providing financial assistance that for green freight programs. Aside from funding freight transport-related physical infrastructure (e.g. road networks and ports), these financial institutions can provide access to financial mechanisms that can provide loans for piloting and demonstrating programs and technologies, for assisting small and medium shippers and operators to adopt to efficient technologies and vehicles as well as for capacity building activities and training for drivers, government officials and other key people in the freight sector, and provide technical assistance for policy research.

Financial institutions need sound information to engage in financing schemes by green freight programs. As they are mainly concerned with ensuring that they generate profit from their financing instruments, green freight programs can be useful in generating trust and interest from financing institutions to contribute to financing schemes. Green freight programs can also be channels for enabling small operators which may not have the necessary requirements to access funding for adopting cleaner trucks and technologies.