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Add to Preferred SourcesIFC, a member of the World Bank Group, approved a USD 80 million credit facility to Produbanco, part of Promerica International Financial Group, to increase the bank’s lending to climate-smart projects and to bolster its lending to small and medium-sized enterprises (SMEs).
This credit facility places Produbanco at the forefront of Ecuador’s nascent climate finance market, significantly increasing its capacity to support climate-smart projects. Produbanco’s sustainability strategy is built upon the principles of the 2030 Agenda and it includes funding for energy efficiency projects and upgrades to manufacturing equipment to improve infrastructure and promote industrial development.
This financing will also boost Produbanco’s SME loans. Financing for SMEs remains very limited in Ecuador while they are essential to the country’s economic diversification. They account for about 34 percent of Ecuador’s formal employment and 25 percent of the gross domestic product. As a result, Produbanco’s increased lending in this segment will help fuel job creation in the country.
IFC will provide advisory services to the bank in order to identify potential climate-smart transactions in its portfolio and develop eligibility guidelines for climate-smart projects. Produbanco’s expanded climate finance operations will contribute to the reduction of Ecuador’s CO2 emissions under the COP21 international agreement to combat climate change.
“We are committed to helping Ecuador develop its climate finance market and to help SMEs obtain the necessary financing so they can become an engine of economic growth and job creation,” said Juan Gonzalo Flores, IFC’s acting manager for the Andean region. “This investment fills important gaps, particularly for small companies that need financing to grow as well as for the financial sector, so it can support the climate-smart projects in the country,” he said.
IFC’s strategy in Ecuador is centered on promoting financial inclusion and climate finance. IFC also focuses on providing financing and technical assistance to businesses that have a strong positive impact on the export sector. IFC looks for projects that tackle climate change, create jobs and benefit underserved populations. IFC’s support to Ecuador began when the country became a member of the institution in 1956, and since that time, it has invested some USD 750 million in Ecuador.
Original source: IFC
Published on 5 December 2018