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EIB provides $100 m loan for SMEs, climate action in Peru
The European Investment Bank (EIB) is providing a 100 million dollar framework loan to Peru’s development bank, Corporación Financiera de Desarrollo S.A. (COFIDE), to finance small businesses and climate action investment projects, primarily in the renewable energy and energy efficiency sectors.
As a response to the COVID-19 crisis, the EIB loan will provide approximately $ 30 million to small and medium sized businesses, targeting companies impacted by current economic challenges. The loan will be channelled to eligible investment projects through local commercial banks.
The investment will also benefit from a EUR 3.7m ($ 4.5m) EU Latin America Investment Facility (LAIF) grant blending resources. LAIF funds would primarily be deployed in the form of technical assistance support, aimed at strengthening COFIDE’s environmental and social risk management systems, enabling private investment in the sustainable energy sector in Peru.
EIB Vice-President, Ricardo Mourinho Félix responsible for Latin America said: “Investing in micro, small and medium entreprises is crucial to create jobs and drive economic development and innovation. We are pleased to be signing this agreement with COFIDE to provide additional financial support to Peruvian small businesses impacted by COVID-19, and to further boost the development of the sustainable energy sector in the country. The agreement is a good example of joint EU efforts under “Team Europe” and highlights our priorities in Latin America: contributing to sustainable and inclusive growth and promoting Climate Action.”
Carlos Linares, President of COFIDE, said “As part of our role as a development bank in Peru and aligned with our triple bottom line strategy that seeks to achieve positive economic, social and environmental impacts, we are very pleased with this agreement with the European Investment Bank that will benefit MSMEs in their search for finance allowing them to reactivate their businesses, especially after this difficult situation at all levels. It will also help us to continue contributing to closing the infrastructure gap, but with an emphasis on green projects, which COFIDE has been financing for several years now.”
EU Ambassador to Peru, Diego Mellado, said:“The existence of climate and environmental effects are a smoldering problem for Peru and the world. In this context, supporting sustainable projects, such as renewable energy or urban mobility or green housing, are essential to face these risks and these projects are also in line with other efforts such as the European Green Pact. The investment of the European Investment Bank, precisely, will promote and help to carry out initiatives and business support that help to mitigate against these climate risks. This will have a very positive impact on the future of Peruvians.”