IDB Invest supports Banco Pichincha in the first issuance of green bonds in Ecuador's stock market

  • This bond contributes potentially to six UN Sustainable Development Goals
  • IDB Invest’s participation includes conceptual framework design and a second-party opinion verifying the bond

IDB Invest, a member of the Inter-American Development Bank (IDB) Group, subscribed a $50 million bond issued by Banco Pichincha Ecuador for a total of $150 million. This is the first green bond issued in Ecuador and the proceeds will be aimed at increasing the supply of green financing in the country.

The proceeds derived from this deal are intended to support projects with measurable environmental benefits, specifically in projects related to energy efficiency, renewable energy, clean production, construction and sustainable transport and waste management. In addition, this first green bond issuance improves the supply of sustainable investment financial products in Ecuador’s capital market.

"Green bonds drive sustainable financing and the transition to a low-carbon economy that is resilient to climate change," said Gema Sacristán, IDB Invest’s chief investment officer. "IDB Invest is leading the way in Latin America and the Caribbean, where the financing gap to mitigate the effects of climate change is estimated at up to $80 billion a year until 2030. This deal with Banco Pichincha, which also marks a milestone in the Ecuadorian stock market, is another example of our commitment."

This bond can contribute to six United Nations Sustainable Development Goals (SDGs): Clean Water and Sanitation (SDG 6), Affordable and Clean Energy (SDG 7), Decent Work and Economic Growth (SDG 8), Responsible Consumption and Production (SDG 12), Climate Action (SDG 13) and Partnerships for the Goals (SDG 17).

The International Finance Corporation (IFC) and Proparco, the French Development Agency, have also participated as investors in his first green bond issuance with $50 million each.

In addition to its participation as an investor, IDB Invest supported Banco Pichincha with technical assistance for the design of the conceptual framework of the issuance and the inclusion of a second-party opinion by Deloitte. Through this process, Deloitte verified Banco Pichincha’s bond compliance with the guidelines established in the 2018 Green Bond Principles.

In partnership with financial intermediaries in the region, IDB Invest seeks to promote the issuance of thematic bonds with measurable environmental and social impact. With Banco Pichincha’s green bond, IDB Invest has supported the issuance of ten thematic bonds in eight countries in Latin America and the Caribbean for a total value of $800 million. In this way, IDB Invest is contributing to the creation of a new type of financial asset and to the development of responsible and impact investment.

About IDB Invest
IDB Invest, a member of the Inter-American Development Bank (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 enterprises and projects to achieve financial results that maximize economic, social and environmental development for the region. With a portfolio of assets of $12.4 billion under management and 342 clients in 24 countries, IDB Invest works across sectors to provide innovative financial solutions and advisory services that meet the needs of its clients.

About Banco Pichincha
Banco Pichincha, the largest financial institution in Ecuador, has assets of $10 billion as of December 2018, equivalent to 26 percent of the banking system. After 113 years of activity, it has grown since its inception as a local bank to become an international financial entity with a presence in six countries. In Peru it develops an intense activity in the microfinance segment. In Colombia it focuses on granting educational and vehicle loans; while in Spain it serves migrants, without neglecting the business world. Its operations in Miami and Panama also support bilateral foreign trade transactions