The EIB marks the largest international public bank to support the development and economic activity in the Caribbean with loans and equity investment worth €1.8nbsince its first operation in the region.
Image: The EIB provides finance to Banfondesa and Fondesa. Photo: Courtesy of Ben Albano.
The European Investment Bank (EIB) is providing two Green Loans to Banfondesa and Fondesa to provide renewable energy and energy efficiency finance to micro-borrowers.
The first EIB loan of EUR 3.6 million will be provided to Banco de Ahorro y Credito Fondesa (Banfondesa), a microfinance bank with more than 120,000 clients and 59 branches. This loan will help Banfondesa, over the next two years, to finance renewable energy and energy efficiency investments carried out by micro, small and medium-sized companies, and medium/low income families.
The EIB will additionally lend EUR 1.4 million to Fondo para el Desarollo INC (Fondesa), an NGO which focuses on educational finance programmes and providing technical assistance for strengthening education institutions. This finance will help the bank to finance renewable energy (mainly photovoltaic) and energy efficiency solutions for schools and universities over the next two years.
Both entities and their customers also benefit from a Regional Technical Assistance programme encompassing training and capacity building.
Speaking at the signature ceremony, EIB Vice President, Emma Navarro, responsible for the bank’s activity in Latin America, stated: “As the EU’s climate bank, we aim to mobilise financial resources across the planet for climate-related investments. We are pleased to join forces with Banfondesa and Fondesa to support the development of microfinance solutions for energy efficiency and renewable energy investments in the Dominican Republic.” The EIB Vice-President also highlighted this agreement as “a clear example of our priorities in the region: fighting climate change and promoting economically sustainable and inclusive growth.”
BANFONDESA President, Cristian Reyna said: “For me personally and for BANFONDESA this agreement with the EIB allows us to differentiate ourselves in the market and to offer added value to a large number of clients (families, SMEs and agro-producers). Through this financing programme we expect to reach around 1,600 families and more than 200 SMEs and agro-producers in the Dominican Republic, reiterating our social commitment to contribute to preserving the climate”.
Fondesa Chief Executive, Yudelka Flores said: “Since 2015, FONDESA carries out a service strategy based on sustainable development objectives, specifically SDG4 (good quality education for life for all) and SDG 17 (partnerships to meet these objectives). In this case, the agreement with the EIB provides a great opportunity to widen our strategic horizons – integrating our SDG objectives 7 – access to clean energy. With this agreement we have an aim not only to bring energy solutions in private schools but also to create better environmental awareness and special attention for the planet.”
The European Investment Bank is the world’s largest international public bank and has supported development and economic activity in the Caribbean with loans and equity investment worth EUR 1.8 billion since its first operation in the region. The bank’s activity in the Caribbean is carried out under the Cotonou Agreement – between the European Union and 78 ACP States with the core objective of reducing and eradicating poverty in ACP states, whilst promoting sustainable development and integrating ACP countries in the global economy.
In the Dominican Republic, the EIB has provided a total of EUR 409 million to projects, including in the energy, small business and transport sectors.
The EIB, as the world’s largest multilateral provider of climate finance, aims to dedicate at least 25% (35% outside of the EU) of its investments to climate change mitigation and adaptation, supporting low-carbon growth with climate resilience. Outside of the EU, it aims to dedicate at least 35% of its investments to these targets.
In 2018, the European Investment Bank surpassed its climate financing target for the ninth year running, dedicating EUR 16.2bn to promoting climate action, which represents 29% of its total business. Mobilising finance for climate action is one of the EU bank’s priorities. Its goal is to be a leader in mobilising the finance needed to keep global warming under 2°C and to limit the temperature increase to 1.5°C in order to meet the Paris Agreement objectives.
The EIB is the world’s largest issuer of green bonds and was the first to make an issue on this market.
Source: Company Press Release.