The International Finance Corporation (IFC), member of the World Bank Group, and the Japan International Cooperation Agency (JICA) provided the final tranche of a green financing package for US$400 million dollars to BBVA in Peru with the objective to promote sustainable construction and energy efficiency projects in the country.
The first part of the financing, carried out in June 2023 by IFC, was for US$150 million. Today, in a signing ceremony held at the BBVA facilities in Lima, with the presence of the Ambassador of Japan in Peru, Tsuyoshi Yamamoto, the granting of the remaining US$250 million dollars was confirmed, of which US$150 million dollars will be co-financed by JICA.
The green financing package from IFC and JICA will allow BBVA to strengthen its loan portfolio for sustainable construction in the country. The package includes advisory services to provide technical support to real estate developers in EDGE and LEED certifications for residential, industrial and commercial buildings.
In addition, IFC will support BBVA on environmental, social and governance (ESG) guidelines. On the other hand, the financing will also be used to develop energy efficiency projects. This financing agreement was reported by BBVA to the Superintendence of the Securities Market in March 2023.
Alfonso García Mora, IFC vice president for Europe, Latin America and the Caribbean, said: "The sustainable construction sector is still underdeveloped in Peru. In addition to being a strong step in the right direction, this financing aspires to be part of a series of ongoing efforts aimed at ensuring that sustainability is the norm in the construction industry of the Peruvian nation. We are honored to work alongside BBVA to promote sustainability, inclusion and productivity in the country."
Takashi Nishimura, JICA Resident Representative in Peru, pointed out that climate change is closely related to several of the problems that affect society today. Therefore, the growth and development of the country must go hand in hand with actions to mitigate the effects of climate change to achieve sustainable development over time. In this context, green finance that promotes the construction of ecological buildings that comply with international standards is of great importance. This is exactly the objective of this joint project with BBVA.
Fernando Eguiluz, CEO of BBVA in Peru, pointed out that "a fundamental part of the bank's strategy is to have a solid portfolio of products that help people in the transition to a greener and more sustainable world." In that sense, Eguiluz added, "the agreement with the IFC and JICA will promote high-impact sustainable initiatives in the country for the benefit of all sectors of the population."
Over the next decade, IFC estimates that green buildings will represent a significant low-carbon investment opportunity in emerging markets: US$24.7 trillion by 2030. Emerging market cities are expanding at a rapid pace to keep up with high population growth and rapid urbanization. The floor area of buildings is expected to double by 2060. Most of this growth will occur in residential construction, especially in middle-income countries.
