IDB Invest and Los Portales Announce the Issuance of the First Social Housing Bond in Peru
IDB Invest structured and subscribed the totality of the first social housing bond in Peru issued by Los Portales, the leading company in housing and construction in the country, for an amount equivalent to $35 million in Peruvian soles and over a period of 10 years.
The funds will finance the development of urban rehabilitation and social housing projects with a focus on vulnerable populations, benefiting more than 6,800 families each year.
The project will contribute to Los Portales increasing urban development in the country, totaling around 46,000 urbanized lots (around 3.8 million square meters) during the period 2022–2027, of which 55% will be destined to vulnerable populations. The project is of great relevance for Peru, where 93% of urban expansion is considered informal and approximately 750,000 families need housing and cannot afford it.
Additionally, the project will help build around 15,000 social housing units, equivalent to 1 million square meters for the social government programs of Mivivienda and Techo Propio.
The project is expected to create more than 320 new permanent jobs and increase purchases from the domestic supply chain of some 2,100 providers for an annual amount of $270 million.
IDB Invest reaffirms its commitment to the region's private sector, with innovative financial solutions with a social focus that have a proven effect in the capital market.
IDB Invest assisted Los Portales in the design of the methodological framework for the use of social bond funds, containing the criteria for the selection, follow-up and evaluation of projects and aligned with the Principles of Social Bonds of the International Capital Markets Association (ICMA). The social bond received a second opinion from Moody’s, a company specialized in these types of transactions.
This deal is expected to contribute to five United Nations Sustainable Development Goals (SDGs): No Poverty (SDG 1), Clean Water and Sanitation (SDG 6), Decent Work and Economic Growth (SDG 8), Reduced Inequalities (SDG 10), and Sustainable Cities and Communities (SDG 11).
About IDB Invest
IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social, and environmental development in the region. With a portfolio of $15.3 billion in asset management and 375 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.
About Los Portales
Los Portales is a Peruvian and Mexican company operating five business units: Urban Housing, Social Housing, Apartments, Parking Lots and Hotels. Its main goal is to build dignified and affordable housing for people with fewer resources, and to provide direct credit loans to its customers to purchase properties.