Lima, Peru, March 20, 2024. The International Finance Corporation (IFC), member of the World Bank Group, and the Japan International Cooperation Agency (JICA) provided the final tranche of a green financing package for US$400 million dollars to BBVA in Peru with the objective to promote sustainable construction and energy efficiency projects in the country.
The first part of the financing, carried out in June 2023 by IFC, was for US$150 million. Today, in a signing ceremony held at the BBVA facilities in Lima, with the presence of the Ambassador of Japan in Peru, Tsuyoshi Yamamoto, the granting of the remaining US$250 million dollars was confirmed, of which US$150 million dollars will be co-financed by JICA.
The green financing package from IFC and JICA will allow BBVA to strengthen its loan portfolio for sustainable construction in the country. The package includes advisory services to provide technical support to real estate developers in EDGE and LEED certifications for residential, industrial and commercial buildings.
In addition, IFC will support BBVA on environmental, social and governance (ESG) guidelines. On the other hand, the financing will also be used to develop energy efficiency projects. This financing agreement was reported by BBVA to the Superintendence of the Securities Market in March 2023.
Alfonso García Mora, IFC vice president for Europe, Latin America and the Caribbean, said: "The sustainable construction sector is still underdeveloped in Peru. In addition to being a strong step in the right direction, this financing aspires to be part of a series of ongoing efforts aimed at ensuring that sustainability is the norm in the construction industry of the Peruvian nation. We are honored to work alongside BBVA to promote sustainability, inclusion and productivity in the country."
Takashi Nishimura, JICA Resident Representative in Peru, pointed out that climate change is closely related to several of the problems that affect society today. Therefore, the growth and development of the country must go hand in hand with actions to mitigate the effects of climate change to achieve sustainable development over time. In this context, green finance that promotes the construction of ecological buildings that comply with international standards is of great importance. This is exactly the objective of this joint project with BBVA.
Fernando Eguiluz, CEO of BBVA in Peru, pointed out that "a fundamental part of the bank's strategy is to have a solid portfolio of products that help people in the transition to a greener and more sustainable world." In that sense, Eguiluz added, "the agreement with the IFC and JICA will promote high-impact sustainable initiatives in the country for the benefit of all sectors of the population."
Over the next decade, IFC estimates that green buildings will represent a significant low-carbon investment opportunity in emerging markets: US$24.7 trillion by 2030. Emerging market cities are expanding at a rapid pace to keep up with high population growth and rapid urbanization. The floor area of buildings is expected to double by 2060. Most of this growth will occur in residential construction, especially in middle-income countries.
About BBVA
BBVA is a global financial group with a customer-centric vision, which currently has more than 71 million active clients and more than 121,000 employees. BBVA has presence in more than 25 countries. With a leading position in the Spanish market, BBVA is the largest financial institution in Mexico and has leading franchises in South America and Turkey. Additionally, it has a significant investment banking, transactional and capital markets business in the US.
About JICA
The Japan International Cooperation Agency (JICA), is an official agency of the government of Japan, has 96 offices abroad, operates in approximately 140 countries and territories and its operations in fiscal year 2022 amounted to 2,745 billion Japanese yen (equivalent to 18.22 billion US dollars). JICA aims to solve socio-economic problems in each country, through technical cooperation, financing of public projects and financing and investment in the private sector. JICA in Peru, in addition to working in the field of mitigating the effects of climate change, also implements projects in the areas of solid waste management, disaster risk management, industry promotion and financial inclusion, promoting innovation transversally in these areas and working in collaboration with public and private entities, NGOs, academia, among others. JICA contributes to the sustainable socio-economic development of Peru. For more information, https://www.jica.go.jp/spanish/overseas/peru/index.html.
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 2023, IFC committed a record $43.7 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 global compounding crises. For more information, visit www.ifc.org.
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