Bogota, Colombia, July 28th, 2022. In a bid to increase access to climate finance, IFC is providing an up to $200 million loan to Banco Bilbao Vizcaya Argentaria Colombia S.A (BBVA Colombia), one of the largest banks in the country. The aim is to promote a greener financial sector, supporting the nation's goal of becoming carbon-neutral by 2050.
IFC's financing package will support the bank's lending program for climate-smart projects, with a focus on green buildings and green construction. Additionally, it will increase funding for other climate-smart projects across sectors, including agriculture, housing, and renewable energy. IFC's support will contribute to reducing the country's CO2 emissions—7,184 tons per year between 2022 and 2027 and thereafter.
This is the first loan to be supported by the UK Market Accelerator for Green Construction (MAGC) Program, which is sponsored by the UK Department for Business, Energy and Industrial Strategy with the purpose of scaling-up green construction markets by incentivizing financial intermediaries to develop new green construction finance products in Colombia. The Program will support the scale up of green buildings certified with the Excellence in Design for Greater Efficiencies (EDGE) Advanced certification. EDGE, an IFC innovation, is a global green building certification system. 'Advanced' certification is awarded to buildings with energy savings of at least 40 percent, as compared to 20 percent savings for standard EDGE certification.
Colombia has committed to reducing greenhouse-gas (GHG) emissions by 51 percent by 2030. Yet, the land use, transport, and energy sectors along with the construction industry generate around 85 percent of GHG. Decarbonizing these sectors is essential to achieve the country's climate change goals and shift toward a low-carbon economy.
"At BBVA we are committed to meet the ambitious environmental goals set by the country and permanently promote sustainable financing in Colombia. This loan will allow us to add resources to continue promoting the fulfillment of the Sustainable Development Goals (SDGs), such as the construction of sustainable cities and communities, and thus continue accompanying Colombians in the transition to a greener and more inclusive future," said Mario Pardo, BBVA´s Country Manager in Colombia.
IFC is also supporting BBVA Colombia to align its internal green financing processes with the recently launched Green Taxonomy of Colombia, making it IFC's first green loan to apply local taxonomy. The system defines what types of projects are considered "green," providing clarity to the growing number of individual and institutional investors interested in environmentally friendly investments.
Alicia Ferrer, FIG Andean New Business leader of IFC, said: "One of IFC's regional priorities in Latin America and the Caribbean is to address climate change through the expansion of green finance. In alignment, IFC's funding will promote greater market sustainability by supporting an emerging green asset class in the local market. It will demonstrate the viability of climate financing, motivating other players to apply good green finance practices and enabling green growth in Colombia."
In 2022, with the World Bank Group's support, Colombia launched a green taxonomy, climate risk management guidelines, and disclosure regulations for ESG and climate matters. IFC also played a key role in catalyzing the green buildings market. As part of these strategic efforts on climate, this current project will support one of the leading banks in Colombia to scale up green finance in the country.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit www.ifc.org.
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