The International Finance Corporation (IFC), part of the World Bank Group, has announced a landmark $100 million investment in Ecuador’s Produbanco to support biodiversity conservation, climate-smart projects, and expanded access to finance for women-owned small and medium-sized enterprises (SMEs). This investment, made in the framework of COP16 in Cali, Colombia, marks Ecuador’s first loan with a biodiversity-focused component and aligns with the country’s needs for sustainable development.
Produbanco will leverage this funding to advance projects that conserve and restore Ecuador’s natural biodiversity, promote climate resilience, and bridge the financing gap for SMEs, particularly those owned by women. The IFC has committed $50 million directly and mobilized an additional $50 million through credit insurance from its Managed Co-Lending Portfolio Program (MCPP), a syndication platform attracting institutional investors to sustainable development projects.
Supporting Ecuador’s Rich Biodiversity and Climate Resilience
Ecuador, renowned for its biodiversity, faces significant environmental threats from deforestation and climate change. The coastal regions are particularly vulnerable to rising sea levels and natural hazards, placing Ecuador 118th out of 187 countries on the University of Notre Dame’s Global Adaptation Initiative for climate vulnerability. By investing in biodiversity-focused and climate-smart projects, Produbanco aims to address these challenges, helping conserve natural resources and enhance the resilience of Ecuador’s vital agricultural sector.
According to Rubén Eguiguren, CEO of Produbanco, this partnership is a unique step toward integrating biodiversity conservation into project financing. “Aligned with our values, Produbanco is dedicated to supporting clients, especially SMEs, in implementing projects that also prioritize biodiversity conservation and habitat restoration. We’re proud to be Ecuador’s first bank to adopt a biodiversity-centered financing approach with IFC’s support,” Eguiguren noted.
Bridging the SME Financing Gap and Expanding Economic Opportunities
SMEs are a crucial part of Ecuador’s economy, yet many struggle to access the financing necessary to grow and sustain their operations. This $100 million investment will help address the financing gap, allowing SMEs, particularly those owned by women, to expand. IFC’s Vice President for Europe, Latin America, and the Caribbean, Alfonso García Mora, highlighted Produbanco’s commitment to sustainability, stating, “Through past collaborations, Produbanco has shown strong dedication to SME financing, climate projects, and the blue economy. By investing in Produbanco, we aim to drive sustainable economic growth, job creation, and natural resource protection in Ecuador.”
Enhancing Financial and Advisory Support for Sustainable Development
Along with the financial investment, IFC will provide advisory services to strengthen Produbanco’s capacity for biodiversity finance and climate risk assessment. The IFC anticipates that its involvement will draw additional institutional investors, building momentum for sustainable finance in Ecuador and furthering the impact of its investment.
This funding will contribute to Ecuador’s goals under the COP16 biodiversity and climate frameworks, underscoring a joint commitment by IFC and Produbanco to foster sustainable development and inclusive growth across the country.
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Publish date : 2024-10-29 20:58:00
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