[China Co-Financing Fund] IDB administers 5 million USD loan from CHC to Produbanco for SMEs and green credit line

On July 19, 2018, the private sector institution of the Inter-American Development Bank (IDB) Group, IDB Invest (formerly Inter-American Investment Corporation, or IIC), signed a loan package with Banco de la Producción, S.A. (Produbanco) in Ecuador for the expansion of the bank's small and medium-sized enterprises (SMEs) portfolio, as well as its Green Credit Line. The loan package included a 5 year loan for 25 million USD from IDB Invest, a 20 million USD subordinated loan also from IDB Invest, and a 5 year loan for 5 million USD from the People's Bank of China via the China Co-Financing Fund for Latin America and the Caribbean (CHC). Some IDB Invest reports indicate a 1 year grace period (see comments for more information). The IDB approval date for this loan financing was May 1, 2018, and it refers to this project as "PRODUBANCO," project code 12117-01. According to the ESRS, sub-loans using the funds from this project will be capped up to US$2 million, and will focus on energy efficiency and machine replacement primarily across the following six sectors: food, beverage, textiles, leather, manufacturing, and agribusiness. This is consistent with IDB Invest's press release, which characterizes Produbanco’s Green Credit Lines program as "promot[ing] environmentally friendly production, through the financing of energy efficiency projects or updates in machinery, with the aim of improving its infrastructure and encouraging industry growth." The China Co-Financing Fund was established on 14 January 2013 with a contribution of 2 billion USD by the People's Bank of China, and it is administered by the IDB. For more information, see umbrella project ID #86526.

Additional details

The IDB Invest project page ("PRODUBANCO") gives additional information regarding the loan details (includes a one-year grace period, for example) and the amounts in the loans provided by IDB's ordinary capital/IDB Invest. However, given the tentative language used in the project description ("through a potential co-financing", "The remaining terms and conditions are subject to negotiation with the client, once the B lender formally confirms its participation in this operation"), it is assumed that the press release ("IDB Invest supports credit expansion..." is the more recent/updated information about the loan details and amounts coming from additional financiers. The CHC loan is 5 million USD in both sources, however, and thus the transaction amount has a very high level of confidence.

Number of official sources

5

Number of total sources

5