The International Finance Corporation (IFC), part of the World Bank Group, said Tuesday that it granted a $120 million loan for Brazilian financial co-operative Sicredi to fund renewable energy projects with a focus on solar investments.
The loan is the first deal with a Brazilian co-op to receive certification from the Climate Bonds Initiative (CBI), a UK-based organization that promotes investments in the low-carbon economy. The loan also aligns with the Green Loan Principles, IFC said in a press release.
IFC added that it will advise Sicredi on identifying eligible projects to avoid so-called “green-washed” investments.
Sicfredi signed an agreement with IFC in 2011 for equity and debt financing as well as access to the Global Trade Finance Program. It expanded the agreement in 2013, according to its website.
The co-op received a four-year loan for $50 million from IDB Invest, then called the Inter-American Investment Corporation (IIC), in December 2016 to fund small farmers in Brazil. Sicredi has more than 5 million members at over 2,000 branches in 24 states and the Federal District.
IFC BACKS NBFIs AND MSMEs IN MEXICO
IFC also said Tuesday that it granted a MXN1 billion ($50.5 million) loan to private debt firm Altum Capital to finance non-banking financial institutions (NBFIs) and micro-, small and medium-sized enterprises (MSMEs) in Mexico.
The financing will also allow Altum to increase its green loan portfolio as Mexico is expected to spend up to $791 billion to reduce greenhouse gas emissions by 22% by 2030, IFC said in a press release.
“Given that only 1.4% of financing in the Mexican banking sector is considered green, IFC’s funding is critical to support private sector financiers such as NBFIs that can channel capital to a wider range of business activities that address climate change,” the US-based lender said.
According to IFC, MSMEs in Mexico account for 99% of the country’s businesses and more than 70% of jobs but face a financing gap of $163 billion.
Altum requested the loan in March this year. The firm previously raised MXN1.81 billion from the sale of development equity certificates, known as CKDs, in the local market in August 2019.