Argentina’s Banco de Galicia to launch sustainable facility with IDB support

The Inter-American Development Bank approved a $30 million loan to Banco de Galicia y Buenos Aires to create an innovative sustainable facility to scale up private sector financing for projects with strong environmental benefits.

The loan will support the development of a long-term “green” portfolio of private sector projects in the areas of renewable energy, energy efficiency and agriculture, among others.

The operation reflects a key priority area of beyondBanking, an IDB program that promotes sustainable banking principles in Latin America and the Caribbean. The program’s planetBanking projects seek to help financial institutions reduce their direct and indirect environmental footprints.

“Through the six priority areas of beyondBanking we seek to promote sustainability principles among financial institutions in the region. This planetBanking project with Banco de Galicia will demonstrate the environmental, social and economic benefits of sustainable banking practices,” said IDB Financial Markets Division Chief Daniela Carrera-Marquis.

One of the main challenges for an effective response to climate change in the region is the lack of financing for private sector investments. Financial institutions can play a key role in reducing carbon emissions by providing green loan portfolios and scaling up sustainable investment.

“The sustainable facility with IDB is a new business opportunity for Banco de Galicia. This initiative is aligned with our sustainability strategy and our commitment to support environmentally and socially responsible businesses in Argentina,” said Banco de Galicia CEO Daniel Llambías.

Working with one of the leading financial institutions in South America, the IDB will address two main barriers in the financial sector through this project: the limited access to long-term funding by financial institutions and the lack of relevant expertise and capacity to analyze and structure green investments.

“This sustainable facility will provide not only financial support but also technical expertise to properly identify and serve ‘green’ investments,” said IDB project team leader Diego Flaiban. The IDB will support the development of a toolkit to identify, select and monitor projects that meet climate-friendly criteria and foster Banco Galicia’s capacity to identify investment opportunities to access CDM markets.

Through this innovative sustainable facility the IDB is raising awareness among the region's financial institutions and expects to work in the following year with other banks in the region to promote the establishment of more sustainable portfolios.

Subject to market conditions, the IDB loan to Banco de Galicia may be complemented with additional financing in the form of a “B” loan from other sources.

About Banco de Galicia 

Founded in 1905, Banco de Galicia is one of Argentina’s leading commercial banks. Through traditional and alternative channels, it offers a broad range of financial products and services for individuals and businesses. Banco de Galicia operates a vast and diversified distribution network with than 350 branches and ATMs, as well as more than 200 service centers for regional card companies. This year Banco de Galicia joined the IDB’s Trade Financing Facilitation Program as an issuing bank, marking an important milestone in its relationship with the IDB.

About the IDB

The Inter-American Development Bank is the leading source of long-term financing for economic and social development projects in Latin America and the Caribbean. Its Structured and Corporate Finance Department is responsible for non sovereign-guaranteed operations, which involve loans and partial credit guarantees for private and public sector borrowers.