Washington, D.C./Buenos Aires, Argentina,
June 2nd, 2016 – IFC, a member of the World Bank Group, will provide
$130 million to Banco Galicia to expand the bank’s long-term lending to
small and medium enterprises (SMEs) and to develop a new program to finance
sustainable energy projects in Argentina. Banco Galicia is a leading source
of financing for SMEs in Argentina. Currently, it supports more than 70,000
SMEs, including in the agribusiness sector.
IFC’s financing package consists of a five-year
tranche to expand access to long-term finance for SMEs in Argentina, mainly
in the agribusiness sector; and a seven-year tranche to support sustainable
energy projects. Long-term funds are important to fund capital expenditure
and capacity expansion programs for SMEs. An active SME sector is important
for job creation and to ensure a dynamic supply chain production system.
Similarly, fostering investments in clean energy sources, including solar,
wind, biomass and geothermal sources, as well as energy efficiency and
water efficiency projects promote better use of resources and reduction
of greenhouse gas emissions compared to traditional sources.
While still in its early days, sustainable
energy financing has significant potential in Argentina. The country is
blessed with unique wind and solar resources, and a grid structure which
allows to take advantage of them. In addition, the energy sector in Argentina
is undergoing a process of extensive reform, with substantial investment
expected over the next few years. IFC’s new financing comes at a time
when Argentina is positioning to resume its path of economic growth, and
expects an expansion of the financial sector through the resumption of
long-term lending and ensuing investments in the real sector.
“IFC’s investment in Banco Galicia will
help strengthen our leadership position in the Argentine financial system,
by restarting lending to SMEs at longer tenors in Argentina, particularly
in the agribusiness sector, which is an essential engine of economic growth
in the country. Galicia is also excited to contribute to the development
of sustainable energy sources, a strategic sector for the Argentine economy,”
said Fabián Kon, CEO of Banco Galicia.
“Working with financial institutions such
as Banco Galicia is essential to IFC’s strategy of promoting economic
growth in Argentina. Banco Galicia, a leader in Argentina’s financial
sector, has demonstrated a commitment to sustainability and innovation.
IFC looks forward to strengthening its long-term partnership with Banco
Galicia by helping the bank continue serving productive sectors in the
Argentine economy,” said Salem Rohana, IFC Country Manager for Argentina,
Chile, Paraguay and Uruguay.
In Argentina, IFC has committed over $1.6
billion in sustainable private sector projects over the past twelve months,
becoming the largest international source of financing to the country’s
private sector during this period. IFC’s strategy in Argentina is focused
on financing projects with significant development impact for spurring
economic growth, innovation and job creation. Priority sectors include
agribusiness, infrastructure and renewable energy; competitive manufacturing;
strengthening long-term financing for companies, including small and medium
enterprises (SMEs); and helping improve investment climate for business
start-ups and SME growth. For more information about IFC in Latin America
and the Caribbean, visit www.ifc.org/lac.
IFC, a member of the World Bank Group, is
the largest global development institution focused on the private sector
in emerging markets. Working with more than 2,000 businesses worldwide,
we use our capital, expertise, and influence, to create opportunity where
it’s needed most. In FY15, our long-term investments in developing countries
rose to nearly $18 billion, helping the private sector play an essential
role in the global effort to end extreme poverty and boost shared prosperity.
For more information, visit www.ifc.org
About Banco Galicia
Founded in 1905, Banco Galicia is a full
service bank that offers a full range of financial services to over 3 million
customers, both individuals and corporations. Banco Galicia is one of the
largest private-sector banks in the Argentine financial system and a leading
financial services provider in the country, operating one of the most extensive
and diversified distribution networks in the system, with more than 425
branches and client service locations. Grupo Financiero Galicia S.A., a
financial services holding company, owns 100% of the shares of Banco Galicia.
For more information, visit: www.bancogalicia.com