IFC Lends $35 mn to Promote Green Projects in Costa Rica

IFC has signed a loan of US$ 35 million to incentivise the issuance of a green bond by Davivienda Costa Rica, the third largest private bank in Costa Rica

The International Finance Corporation (IFC), a member of the World Bank Group, has signed a loan of US$ 35 million to support and incentivise the issuance of a green bond by Davivienda Costa Rica, the third largest private bank in Costa Rica. 

The loan will contribute to funding a pipeline of green projects in Costa Rica including sustainable buildings, energy efficiency and small-scale renewable energy generation under the standards for green lending described in the Green Bond Principles, published by the International Capital Markets Association in 2017.

Luc Grillet, Senior Manager for Central America and the Caribbean for IFC, said that the loan to Davivienda directly addressed the agency’s strategic objective of increasing capacity for climate-smart and environmentally sustainable development, while also helping the Costa Rican government achieve its goal of becoming carbon neutral by 2021.

IFC is providing longer-term funding beyond what is currently available in the local financial markets and hopes to play eventually the role of an anchor investor and mobilizing resources upon the green bond issuance on commercial terms from institutional and private investors. 

Federico Chaves, Finance Director of Davivienda Costa Rica, said “the loan signed by IFC and Davivienda Costa Rica will finance a series of green projects that include sustainable buildings, energy efficiency and renewable energy generation, with the objective of offering continuous support to our customers and stay aligned to our Sustainability Strategy.”

And he added that the bank wants to lead in green financing for the private sector. “We will continue working and innovating to be a leader among private banks in green financing in Costa Rica.” 

Recently, the financing institution also announced that through its financing for the first two Scaling Solar projects in Senegal, construction could begin on two solar plants that will provide 60 MW of clean and low-cost power.

The plants – sponsored by Engie, Meridiam, and Senegalese Sovereign Wealth Fund for Strategic Investments (FONSIS) – are expected to reduce greenhouse gas emissions in Senegal by 89,000 tons of C02 equivalent per year, the same as removing 17,000 cars from the road. 

IFC is one of the world’s largest financiers of climate-smart projects for developing countries. Since 2005 – when it started to track climate-smart components of investments and advisory services – IFC has provided more than $ 22 billion in long-term financing and raised over $ 15 billion in core mobilisation through partnerships with investors.