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Ecuador to Expand Financing and Investment for Amazonian Bio-Businesses, with IDB Support

The Inter-American Development Bank (IDB) has approved a $16 million loan to expand access to credit so that bio-businesses in the Ecuadorian Amazon can grow and diversify, boosting the region’s socioeconomic development.

The Bio-Business Financing for a Sustainable Amazon (BASE) program, which has been approved by the IDB Board of Executive Directors, is the first global credit operation for Amazonian bio-businesses in the Andean region under Amazonia Forever – a holistic, regional umbrella program launched in June 2023 to accelerate sustainable development in the Amazon.

The BASE program will benefit approximately 1,800 bio-businesses in the solidarity economy, primarily enterprises run or owned by women and indigenous communities. Of the beneficiary companies, 80% are expected to be micro-enterprises and small producers, 15% associations and cooperatives, and 5% mid-sized or anchor companies.

"This program will focus on offering loans to bio-businesses in the Ecuadorian Amazon, with the underlying idea that sustainable access to financing is key to overcoming other challenges that these businesses face, like limited access to technology and training and a lack of structured value chains," said Anderson Caputo, chief of the IDB’s Connectivity, Markets and Finance Division.

The program has three components. The first will center on financing bio-businesses by channeling resources through the National Corporation for Popular and Solidarity Finance (CONAFIPS) to savings and loan cooperatives, which will then offer loans with cost and repayment terms that meet the needs of this business segment. The second component aims to establish a fund, to be managed by CONAFIPS, to mitigate risks and mobilize additional resources. Finally, the third component will focus on strengthening the institutional capacity of CONAFIPS and savings and loan cooperatives

CONAFIPS, as a founding member of the Green Coalition of Development Banks in the Amazon, will form the Bioeconomy Financing Task Force with the support of the IDB to coordinate actions and build consensus among multilateral, bilateral and other institutions working on bioeconomy-financing projects in Ecuador.

The program’s first component will be financed by an $8 million investment loan from the IDB's ordinary capital and $8 million from the Green Climate Fund’s Amazon Bioeconomy Fund. The IDB loan has a 25-year repayment term, a 5.5-year grace period, and an interest rate based on the Secured Overnight Financing Rate (SOFR), while the Green Climate Fund’s financing has a 20-year repayment term, a 5-year grace period, and an interest rate based on the Secured Overnight Financing Rate (SOFR). The two additional components – for risk mitigation and capacity strengthening – will be financed with Green Climate Fund resources.

About Amazonia Forever 

Amazonia Forever is a holistic umbrella program that aims to protect biodiversity and accelerate sustainable development on three fronts: expanding funding, boosting the exchange of knowledge, and facilitating regional coordination between the eight Amazonian countries.

The program is based on five pillars: combating deforestation and strengthening environmental control and security in the context of national governments; the bioeconomy, boosting alternative and sustainable economic activities; people, aiming for adequate access to quality education, health and employment; sustainable cities and infrastructure and connectivity; and sustainable and low-carbon agriculture, livestock and forestry. In addition, it focuses on promoting the inclusion of women, indigenous peoples, Afro-descendants and local communities; climate and forest conservation; and strengthening institutional capacities and the rule of law.

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 projects and provides policy advice, technical assistance and training to public- and private-sector clients throughout the region. Take our virtual tour.

Contacts

Molina Medina,Vanessa Carolina

Institutions for Development Sector

vanessamo@iadb.org
Molina Medina,Vanessa Carolina

Cavelier,Andres

Cavelier,Andres
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