Original disclosure @ IFC website
Updated in EWS Mar 5, 2021
Disclosed by Bank Feb 24, 2021
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The proposed investment consists of a 7-year loan of up to US$120 million to Banco Cooperativo Sicredi S.A. (Bansicredi or the Bank) to support the Bank’s sustainable energy finance (SEF) program focused on renewable energy (specifically photovoltaic) projects in Brazil
Stakeholders effect - Increased access to climate finance: IFC expects that this Project will increase access to finance for climate finance in Brazil specifically through the engagement with the agriculture and energy sectors. Brazil is ranked as the 13th largest emitter in 2018 with 457MtCO2 per year and the agriculture and energy sectors are together responsible for over 60 percent of the GHG emission in Brazil. The Country is projected to continue to increase its emission stemming from the rapidly increasing agriculture production. Through the Project with IFC, Bansicredi will strengthen the operational capacity to better identify opportunities to expand its climate asset portfolio, promoting more sustainable agricultural practices. Bansicredi has an extensive reach in the rural areas and agribusinesses in Brazil, through which the Project will promote the sustainable practices in the agriculture production and the energy use. To measure the progress against this outcome, IFC will track the number and volume of outstanding climate-smart loans.
Sustainability: IFC expects that the Project will contribute to an increased sustainability of the Brazilian financial sector by introducing a green funding instrument to finance green assets. An increased sustainability will be fostered via demonstration and replication, and innovation. IFC aims at achieving this via its partnership with Bansicredi, who will introduce a GLP certified funding, a first time use in the Brazilian financial sector. GLP compliant loans give transparency and comfort to the investors, as the principles provide clarification and guidance on use of proceeds permitted, process for evaluation and selection of assets, management of projects, and reporting. This way, the GLP effectively helps investors avoid opportunities that are "green washed". At the same time, GLP compliant loans may be more economically attractive for smaller institutions, for whom bond issuances are not a viable option.
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