The FINANCIAL — IFC, a member of the World Bank Group, signed an agreement to provide $60 million to Banco Consorcio in Chile to finance non-conventional renewable energy projects in the country.
IFC’s long-term financing will help scale-up commercially viable technologies and diversify the country’s renewable energy matrix, including in small hydropower, biomass, solar, geothermal and wind projects. Banco Consorcio will also join the IFC Global Trade Finance Program, which will give it access to a trade line to help finance the growth of trade flows in the Latin America and Caribbean region, according to IFC.
“Through this credit line, Banco Consorcio will be able to expand long-term financing on terms that are viable for non-conventional renewable energy developers in Chile, with whom we are committed to financing, and this partnership with IFC will strengthen our capacity to provide solutions to our clients in the long term”, said Francisco Ignacio Ossa, CEO in Banco Consorcio. “This is a very interesting alliance for Banco Consorcio, and we value this agreement which allows us to project a long-term relationship with IFC”, he highlighted.
According to international estimates, Chile’s electricity demand will increase about 5 percent every year through 2020, which will require large investments in power generation. In this context, creating generation capacity in Chile will be essential to lower the price of electricity for consumers and to support industry growth and thus job creation. Supporting renewable energy projects is key for the country’s sustainable development.
“IFC looks forward to this partnership with Banco Consorcio, which will help develop cleaner energy sources in Chile,” said Paulo de Bolle, IFC Head of Financial Institutions Group for Latin America and the Caribbean. “With this project, IFC confirms its commitment to provide innovative solutions in Chile and to contribute to achieve the country’s development goals.”
Banco Consorcio also joined IFC’s Global Trade Finance Program, providing the bank access to a global network of confirming banks to support the growth in trade finance. IFC’s Global Trade Finance Program supports trade in emerging markets by providing partial or full guarantees for individual trade transactions through an effective mitigation instrument, the IFC’s triple-A credit rating. As a member of the program, Banco Consorcio will be able to provide trade finance solutions to Chilean exporters and importers in key industries.
“By joining the Global Trade Finance Program, Banco Consorcio will be able to establish stronger and far reaching relationships with banks in countries that trade with Chile. These linkages are a key element of IFC’s strategy for strengthening international commerce in the region.” said Susanne Kavelaars, Head of Trade and Supply Chain Finance for Latin America and the Caribbean.
By December 2014, IFC’s Global Trade Finance Program had already supported more than US$12.8 billion in trade flows in Latin American and the Caribbean countries through its guarantees. Nearly 40% of these transactions have benefited local small and midsize businesses and over 65% have supported trade flows between emerging market countries, reinforcing IFC’s goal to be an important facilitator of South-South investment.
IFC’s financing to Banco Consorcio is part of IFC’s focus on supporting local financial markets to achieve development impact. IFC aims to achieve these goals through the use of innovative financial products and mobilization, fostering micro, small and medium enterprises, encouraging corporate social responsibility, protecting natural resources through environmentally-sustainable business practices, and promoting business expansion into other emerging markets.
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