CARTAGENA, Colombia – The Inter-American Development Bank (IDB) and the Corporación Nacional de Finanzas Populares y Solidarias (CONAFIPS) are preparing a new project that will promote the bioeconomy – nature-based productive activity that does not degrade the environment – in the Ecuadorian Amazon.

The project was announced during the Finance in Common Summit (FiCS). The project includes $21.3 million in IDB financing for CONAFIPS and is subject to approval by the IDB's executive board.   

The Ecuadorian Amazon holds bio-businesses potential with an estimated $124 million in initial demand for financing. This demand is concentrated mainly in micro and small enterprises that are part of the popular and solidarity economy. However, lack of supply from the local financial system continues to be a major barrier to the development of bio-businesses.;

In this context, the project will increase access to credit and investment in bio-businesses through CONAFIPS. This initiative will benefit an estimated 2,000 bio-businesses in the country's popular and solidarity economy, including microenterprises and small producers, producer associations and cooperatives, and medium-sized companies.

The project includes an innovative combination of different IDB financial instruments, including loans and non-reimbursable resources for investment and technical assistance. CONAFIPS will channel the credit through savings and loan cooperatives located in the Ecuadorian Amazon.

The project will have three components. The first will focus on financing bio-businesses, with terms and conditions that match their risk profiles. The second will establish a loss coverage fund administered by CONAFIPS to help reduce the perception that bio-businesses are high-risk. The third will focus on strengthening the institutional capacity of CONAFIPS and the savings and loan cooperatives.

This initiative is part of the IDB-led Green Coalition that was formed to help implement critical sustainable development objectives. The coalition brings together development banks operating in the Amazon region under the umbrella of the Amazonia Forever program and creates a space for collaborative and coordinated solutions.