LAC Green Debt Fund (IDBI-13976-01)

Regions
  • Latin America and Caribbean
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • IDB Invest (IDBI)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Proposed
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
FI
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Sep 13, 2022
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
Regional
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Finance
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Equity
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 50.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Bank Documents
Primary Source

Original disclosure @ IDBI website

Updated in EWS Aug 23, 2022

Disclosed by Bank Jun 10, 2022

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

The Project objective is to increase the access to Climate Finance solutions to mid-market companies in Latin America and the Caribbean ("LAC") through the provision of tailored long-term growth financing solutions for climate investments to mitigate and adapt to Climate Change impacts across the region.

The Project consists of an IDB Invest investment of up to US$50 million in the DIC Latin American Fund IV, L.P. ("LAC Green Debt Fund" or the "Fund"), the first private credit climate finance fund in LAC.

The Fund will be managed by Darby International Capital ("Darby" or the "Manager"), an independent investing firm, founded in 2020 as a result of the team spinning-off from Franking Templeton's private debt arm, focused on private credit solutions for mid-market companies across LAC. Darby's management team is led by Richard H. Frank Jr. and Ignacio Aicardi, both seasoned investors and former heads of Franklin Templeton private credit strategy in LAC.

With a target size of US$450 million, the Fund's investment strategy is built around providing tailored credit solutions to around 10-12 mid-market companies (with EBITDAs of US$5 million-US$20 million), consisting mainly in senior secured loans with equity kickers (i.e., warrants, income participation, among others). The Fund will be focused on financially sound companies with natural currency hedges, proven management track records, moderate operating and financial risk profiles, and strong competitive positions within their respective sectors, but lacking adequate financing for its business model and expansion plans. The Fund will invest at least 30% of the portfolio in climate investments, with an aspirational target of 50%. The Fund will have a five-year investment period and a total life of 10 years, with the possibility of two one-year extensions.

The Fund can play a key role in developing tailored Climate Finance solutions for mid-market companies across LAC's private credit market to support sustainable economic growth while mobilizing local and international investors' capital towards the advancement of the Climate Finance agenda in the region.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.
Private Actor 1 Private Actor 1 Role Private Actor 1 Sector Relation Private Actor 2 Private Actor 2 Role Private Actor 2 Sector
IDB Invest Buyer Finance contracts with DIC Latin American Fund IV, L.P. Client Finance

Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

EMAIL: requestinformation@idbinvest.org

PHONE: +1(202)-566-4566

ADDRESS: 1350 New York Ave NW, Washington, DC 20005

ACCESS TO INFORMATION

You can submit a request for information disclosure at: https://www.iadb.org/en/access-information/information-request

ACCOUNTABILITY MECHANISM OF IDB / IDB INVEST

The Independent Consultation and Investigation Mechanism (MICI) is the independent complaint mechanism and fact-finding body for people who have been or are likely to be adversely affected by an Inter-American Development Bank (IDB) or Inter-American Investment Corporation (IDB Invest)-funded project. If you submit a complaint to MICI, they may assist you in addressing the problems you raised through a dispute-resolution process with those implementing the project and/or through an investigation to assess whether the IDB or IDB Invest is following its own policies for preventing or mitigating harm to people or the environment. You can submit a complaint by sending an email to MICI@iadb.org. You can learn more about the MICI and how to file a complaint at http://www.iadb.org/en/mici/mici,1752.html (in English) or http://www.iadb.org/es/mici/mici,1752.html (Spanish).

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How it works