Jun 14, 2011
IDB approves innovative $90 million facility to support energy efficiency, cleaner production and renewable energy projects in Colombia
The flagship facility will support Bancolombia and other financial institutions, furthering IDB’s commitment to climate change mitigation
The Inter-American Development Bank (IDB) approved a $90 million facility to support on-lending to energy efficiency, cleaner production and renewable energy projects through Colombian financial institutions.
The Facility’s first utilization is a transaction with Bancolombia in collaboration with International Finance Corporation (IFC) and Clean Technology Fund (CTF). The approved project with Bancolombia marks the first ever “green” risk sharing guarantee not only in Colombia but also in the region. The project will support Bancolombia’s origination of loans to small and medium enterprises and corporations that seek to adhere to higher environmental standards. The risk sharing mechanism between Bancolombia, IDB and IFC will support a portfolio of up to COP200,000. Further technical assistance to Bancolombia will support internal capacity building, energy efficiency audits and knowledge creation.
“Through our collaboration with IFC, CTF and Colombian banks, we aim to mobilize $3 for every $1 that IDB lends. This promises to extend financial access to ”green” projects which would otherwise face limited or unaffordable financing options and fill a critical market void”, said Diego Flaiban, Financial Institutions Officer.
The Facility and Bancolombia project are part of IDB’s strategy to respond to climate change and reduce the environmental footprint of financial institutions in order to stimulate innovation, productivity and economic growth. The Facility plays a pivotal role in the financial markets strategy of the Structured and Corporate Finance (SCF) Department and is at the center of the beyondBanking program, specifically aligned with the program’s planetBanking pillar which targets the development of “green” financial products.
“This Facility represents a cutting edge approach by the IDB to respond to climate change with market-ready financial products. It underscores the catalytic role of financial institutions to turn risks into opportunities and influence private sector behavior in a responsible and sustainable manner”, said Daniela Carrera-Marquis, Chief of the Financial Markets Division.
Bancolombia is headquartered in Medellín, Colombia. The Bank has 714 branches and 2,223 automatic teller machines (ATMs) across Colombia.Bancolombia and its subsidiaries provide stock brokerage, investment banking, leasing, factoring, consumer finance, fiduciary and trust services, asset management, pension fund administration, and insurance, among others. The Bank’s shares are listed in the New York Stock Exchange since 1995, in addition to the Colombian Stock Exchange.