81311582-Resource Efficiency, Green Quality Management and Business Development

To improve the green competitiveness of Palestinian MSMEs, the contract focuses on three key areas: 1) Environmental management systems (EMS) and international sustainability standards, 2) Green product improvement and development, and 3) Access to green finance. Setting up and implementing EMS is crucial for Palestinian MSMEs to systematically identify and manage environmental risks, reduce resource consumption and waste generation, comply with regulatory requirements, enhance their reputation, and demonstrate their commitment to sustainability. According to the focus of the GGP project on greengrowth and competitiveness, EMS are also seen as a means to enable entering new markets by complying with international requirements on sustainability. In this regard, the step of building up EMS within MSMEs is connected to introducing sustainability standards. To this end, the objective of the contract in the area of EMS and international sustainability standards is A) to introduce EMS to 60 MSMEs (pre-selected in work package 1) and B) to select out of this group 10 MSMEs suitable for acquiring an internationally recognized sustainability certificate and support and consult them during the process of applying and preparing for an audit to acquire a respective standard, implement corrective actions, and successfully achieve certification. Besides measures to reduce and manage resources, green product development can significantly contribute to the improved competitiveness of a company. Developing and offering environmentally friendly products can shape a company"s market differentiation and lead to an improved reputation of a brand. Against the background of an internationally growing demand for sustainable products, green product development enables access to new markets. Green product development can also lead to cost savings and operational efficiencies by reducing resource consumption, waste generation, and environmental impact throughout the product lifecycle. For example, implementing energy-efficient manufacturing processes, sourcing sustainable materials, and designing products for recyclability can lower production costs and improve overall efficiency, contributing to the company's bottom line. Developing green products can help companies stay ahead of regulatory requirements and mitigate risks associated with environmental regulations and standards. By proactively addressing environmental concerns and adopting sustainable practices, companies can minimize the risk of regulatory fines, penalties, and reputational damage resulting from non-compliance with environmental laws and regulations. When implemented adequately, green product development will improve a company"s capacities in research and development, in that it anchors an iterative process of learning and innovation in the company culture. For these positive impacts to unfold, a company needs to have a clear understanding of the demand for green products within the respective sector to ensure that the green products will find outlet markets. Companies suitable for interventions in the field of green product development therefore need to be able to conduct market research and cost-benefit analyses that will serve as the foundation of any effective product development process. The objective of the contract within the area of product development and improvement is to support these 30 companies throughout the whole development process of designing, prototyping, and producing new sustainable products and/or improving existing products.

Access to green finance: Under any given circumstances, MSMEs need to be aware that the transformation to green production- and consumption methods requires initial investments. Following the conviction of the GGP project, these investments will improve the competitiveness of MSMEs and lead to an increased return on investment in the medium term. Ideally, the entrepreneurial risk of making such investments is cushioned by specific green financing products, either provided through private finance institutes (e.g., green bonds, green loans) or by public sources (e.g., green grants, green subsidies). In the specific local context of Palestine, the availability of, and access to green finance is particularly challenging due to various factors, e.g.: political and economic instability making Palestine a high-risk market, limited financial infrastructure, etc. Overall, MSMEs seeking green investments in Palestine need a range of legal, business, and growth support to help them navigate the challenges of obtaining suitable financing in a complex banking environment, with low financial literacy of MSMEs. The contract activities within this area are designed to complement these ongoing activities in that it offers tailored support to MSMEs that already operate with robust finance management structures, are aware of the benefits of green investments, and are willing to take an entrepreneurial risk through accessing green finance. The objective is to support MSMEs in accessing green finance through scouting and selecting suitable financing options, developing the application documents, applying and obtaining financial support, and setting up a structure for finance monitoring and managing of the investment.

Beneficiaries of the contract Within the theory of change underlying the GGP project, this contract is focused on the micro-level of the private sector ecosystem. Building on that, the contract is designed to directly support MSMEs on a more advanced technical level. Respectively, the target group of this contract has already been pre-selected during the preceding activities. It constitutes 90 MSMEs from selected sectors (Stone and Marble, Food Processing, Recycling, Building and Construction) that are economically viable and therefore ready to receive advanced technical support.