Bogota, Colombia, April 25, 2017—Davivienda,
one of the country’s largest banks, has concluded a record green bond
issue in Colombia as part of its efforts to offer financing to customers
seeking to develop sustainable projects that help to mitigate climate change.
The International Finance Corporation (IFC),
a member of the World Bank Group, which is considered to be one of the
main promoters of green investments globally, is the sole investor of the
COP$433 billion bond issuance (approximately US$150 million) at a tenor
of 10 years and a rate of IBR+2.13 percent.
Green bonds are an investment tool to leverage
financing for projects that help mitigate climate change, such as renewable
energy, sustainable construction, cleaner production, and energy efficiency.
This is the largest green bond issue by a
private financial institution in Latin America, demonstrating Davivienda’s
commitment to financing projects with a positive climate and environmental
impact. The issuance responds to Colombia’s target of reducing its pollutant
emissions 20 percent by 2030. The funds will be used to finance projects
in the areas of sustainable construction, cleaner production, energy efficiency
and renewable energies (water, biomass, wind and photovoltaic solar energy).
Projects aimed at mitigating the risk of
flooding and promoting water management, reduction of CO2 emissions
and thermal energy generation for the production of cleaner energy are
a few examples of projects that may potentially access these resources.
“The green bonds issuance is part of our
Sustainability Strategy, which focuses on the development of responsible
and inclusive criteria in our business operations, including the mitigation
of environment impacts, adaptation to climate change, and strengthening
of our community programs and initiatives,” explains Efraín Forero, President
IFC and Banco Davivienda have a long standing
relationship, dating back to 1973 when IFC made its first investment in
Grupo Bolívar, Davivienda’s parent company and one of the main financial
groups in Colombia. Since that time, IFC has provided lines of credit and
capital investments to the bank. In 2007, IFC provided financing to support
Banco Davivienda’s purchase of Granbanco (formerly Bancafé) in Colombia.
Irene Arias, IFC Director for Latin America
and the Caribbean, notes that the bond issue is another example of Davivienda’s
leadership in promoting Colombia’s sustainable development. “With this
issue, Davivienda is taking another step in support of the development
of the green bond market in Colombia and Latin America. Davivienda is committed
to combating the factors that cause climate change and, by purchasing this
issue, IFC is demonstrating the importance of green bonds in the financing
of sustainable projects.”
“As part of IFC’s strategy in Colombia,
it is essential to promote the development of the capital market as an
important source of financing that reduces dependence on foreign debt and
strengthens the capacity to adapt to economic shocks. The green bond, which
is a relatively new instrument on the local market, is an important step
in the development of the capital market,” says Marcelo Castellanos, IFC
Manager for the Financial Institutions Group in Latin America.
IFC has identified more than US$1 trillion
in climate financing opportunities in Latin America and the Caribbean through
to 2040. In Colombia, the potential alone for financing of renewable energies,
for example, totals US$27.5 billion. IFC will continue to support the development
of financial instruments such as green bonds to ensure that the capital
markets continue to perform their function of promoting climate financing.
At the global level, IFC has issued US$5.6 billion in green bonds in various
IFC, a member of the World Bank Group, is
the largest global development institution focused exclusively on the private
sector in emerging markets. Working with more than 2,000 businesses worldwide,
IFC uses its six decades of experience to create opportunity where it is
needed most. In FY16, our long-term investments in developing countries
rose to nearly $19 billion, leveraging our capital, expertise, and influence
to help the private sector end extreme poverty and boost shared prosperity.
For more information, visit www.ifc.org.
Davivienda is a Colombian bank belonging
to the Grupo Bolívar. Since 1972 it has provided services to individuals,
businesses, and the rural sector. Its comprehensive portfolio of products
and services meets its customers’ needs with constant innovation and exclusive
offers for each customer segment. It has a team of over 17,300 employees
to serve more than 8.8 million customers through 753 offices, over 3,100
Daviplata service locations and some 2,200 ATMs throughout the region.
In addition to its operations in Colombia, it is active in Panama, Costa
Rica, Honduras, El Salvador, and Miami, United States.