IDB Invest, a member of the IDB Group, issued a Standby Letter of Credit (SBLC), a flexible financial guarantee instrument, in favor of Bancóldex for approximately 2.3 billion Colombian pesos and with a tenor of 13 months.

The deal aims to provide access to financing to seven electricity distribution companies, four of them small and medium-sized enterprises (SME), to fulfill their contractual commitments and allow them to meet their electricity demand with renewable energy.

This project will counter guarantee the payment bonds that Bancóldex will issue in favor of XM Compañía de Expertos en Mercados, the electricity market operator in Colombia, by the order and account of seven electricity distribution companies. The guarantees will back these companies’ contractual commitments as offtakers under the power purchase agreements signed as a result of the CLPE Renewable Energy Auction No. 02-2019.

With IDB Invest’s support, these electricity distribution companies that serve mainly low-income areas will be able to guarantee their long-term purchase commitments while meeting electricity demand with clean energy.

This deal potentially contributes to the United Nations Sustainable Development Goal (SDG) of Affordable and Clean Energy (SDG 7).

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 $12.1 billion in asset management and 333 clients in 24 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.

About Bancóldex
Bancóldex is Colombia’s development bank for businesses, supporting productive transformation with an emphasis on MSME, driving exports and promoting environmental sustainability and the creative economy of the country. It offers financing solutions for the modernization of companies and strengthens the capacities of entrepreneurs through consulting, training and technical assistance