Banco de Galicia launches sustainable finance facility

5 August 2010
Argentina’s Banco de Galicia y Buenos Aires is launching a $60 million facility to support environmental projects at small and medium-sized companies.


The bank will finance projects with high environmental and social benefits in Argentina, particularly in the areas of agriculture, biofuels, renewable energy and energy efficiency.

The Inter-American Development Bank (IDB) is backing the facility with a $30 million loan. The remaining $30 million is to be financed by private investors and could be extended, depending on market conditions.

The loan is part of the IDB’s Beyond Banking programme, supporting sustainable banking principles in Latin America and the Caribbean. The project with Banco de Galicia “will demonstrate the environmental, social and economic benefits of sustainable banking practices", said IDB financial markets division chief Daniela Carrera-Marquis.

The IDB said one of the main challenges for an effective response to climate change in the region is the lack of financing for private sector investments. “Financial institutions can play a key role in reducing carbon emissions by providing green loan portfolios and scaling up sustainable investment,” the bank said.

IDB project team leader Diego Flaiban said: “This sustainable facility will provide not only financial support but also technical expertise to properly identify and serve ‘green’ investments.” This will include fostering Banco de Galicia’s capacity to identify investment opportunities accessing the Clean Development Mechanism.

Last year, the IDB lent $20 million to support Banco General, Panama’s second largest commercial bank, in growing a portfolio of green projects.

Christopher Cundy