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Colombia to Foster Sustainable, Resilient Growth with IDB Support

The Inter-American Development Bank (IDB) has approved an $800 million policy-based loan to support sustainable and resilient growth in Colombia. Of this total, $100 million will proceed from the Korea Infrastructure Fund (KIF), and another $100 million from the risk-transfer mechanism established between the IDB and the Government of Sweden through the Swedish International Development Cooperation Agency (ASDI).

Financing for the operation will be complemented with $228 million (€200 million) in cofinancing from the French Agency for Development and $170 million (€150 million) form the German Development Bank (KfW); additionally, the United Kingdom Government, through its UK-SIP program, will provide technical cooperation resources to help develop the program’s public policies.

The program will support several recovery activities in the context of the health emergency caused by COVID-19, including strengthening the Colombian Government’s ability to plan, manage, and finance climate action. Among other measures, the program will facilitate the publication of the updates to the country’s Nationally Determined Contributions (NDCs), of a long-term decarbonisation strategy by 2050 for public consultation, and of the Framework for issuing Sovereign Green Bonds.

It will also foster economic opportunities based on the sustainable use of natural capital and the development of circular economy models, focusing on sustainable forestry management and usage, climate-smart agriculture, and green business.

This program also aims at promoting the country’s energy transition by encouraging alternative energies in transportation, through the approval of the Energy Transformation Act, the publication of the draft resolution for public consultation on low- and zero-emissions vehicle technologies, the issuance and publication of the resolution to encourage the establishment and use of mixed stations with charging spots, and the decree on preferential parking for electric vehicles.

Society at large will benefit from the resulting decline in net greenhouse gas (GHG) emissions, reduced air pollution caused by internal combustion vehicles, and the development of a diversified, cleaner, and more resilient energy matrix. In addition, the country’s nearly two million agricultural producers (about 30% of them women) will benefit from the knowledge transfer for improved productivity with the inclusion of principles of climate-smart agriculture and good practices for climate change resilience.

This operation is in line with Vision 2025 – Reinvesting in the Americas: A Decade of Opportunities, created by the IDB to achieve recovery and inclusive growth in Latin America and the Caribbean, in the fields of digital economy, gender and inclusion, and climate change.

The $700 million IDB loan is for a 20-year term, whereas the $100 million KIF credit has a 25-year amortization term. Both have a seven-year period of grace.

About the IDB

The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.

Contacts

Borges De Padua Goulart Janaina

Borges De Padua Goulart Janaina

Lobera,Jose Luis

Lobera,Jose Luis
Additional Contacts

Salazar Echavarria,Carlos Alberto

Salazar Echavarria,Carlos Alberto
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