China Co-Financing Fund for Latin America and the Caribbean loan provides $50 million loan to Davivienda for on-lending to small- and medium-sized enterprises in Colombia (Linked to Record ID#86526)

Project narrative

On September 24, 2020, the China Co-Financing Fund for Latin America and the Caribbean signed a $50 million loan agreement with Banco Davivienda S.A. (Davivienda) — a private regional bank that operates in six countries (Colombia, Panama, Costa Rica, El Salvador, Honduras, and the United States) — for on-lending to small- and medium-sized enterprises in Colombia. The loan carries a term of up to 10 years and a purchase option at year 5. The other borrowing terms of the loan are unknown. However, it is known that the borrower was expected to use the loan proceeds to support access to financing for small and medium-sized enterprises (SMEs) by making lines of credit available to alleviate the effects of the COVID-19 situation. Another purpose of the loan was to incentivize better climate change risk analysis at the bank and increasing its funding for green projects. The loan from the China Co-Financing Fund for Latin America and the Caribbean was secured alongside four additional loans: a $100 million loan from the Inter-American Investment Corporation (IDB Invest), a $20 million loan from Development Finance Institute Canada (FinDev Canada), a $20 million loan from the Canadian Climate Fund for the Private Sector in Latin America and the Caribbean - Phase II (C2F), and a $250 million loan from the U.S. International Development Finance Corporation (DFC).