The Inter-American Development Bank (IDB) has approved a $20 million loan and $2 million in nonreimbursable investment financing from the France-IDB Natural Capital Lab Trust Fund (NCL) to increase biobusiness investments in the Amazon region of Peru and contribute to sustainable use of natural capital.
The program will help meet the target market’s diverse needs by offering a menu of innovative financial products for private investment in biobusinesses engaged in the restoration and conservation of the region’s natural heritage.
To this end, the Corporación Financiera de Desarrollo (Development Financial Corporation, COFIDE) will establish and manage a trust that will be capitalized by the Environment Ministry as trustor. This trust will finance eligible projects both directly and through financial institutions that have completed an accreditation process.
To ensure diversification among the beneficiaries, the program will mostly target micro-, small- and medium-sized enterprises (MSMEs). Larger firms will also be eligible in some subsectors and will act as anchor companies in specific value chains.
In addition, the program will receive a $3 million as technical cooperation in the form of nonreimbursable NCL resources to help the Peruvian Amazon region’s biobusiness ecosystem actors such as producers, financial intermediaries, and development banks.
The program will directly benefit nearly 6,500 private biobusinesses. Its indirect beneficiaries include all value chain participants through better coordination and distribution of benefits, and the region’s communities as a whole, thanks to the implementation of practices that promote biodiversity conservation and services promoting sustainable use of the ecosystem.
The operation is aligned with the Bank’s Vision 2025 goals of promoting economic recovery and inclusive growth in Latin America and the Caribbean founded on three key pillars: Support for small- and medium-sized enterprises, fostering gender equality, and fighting climate change.
The IDB’s $20 million loan is for a 10-year term, with a 6-year grace period and interest rate based on LIBOR.
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.