WASHINGTON, January 31, 2023 — The Multilateral Investment Guarantee Agency of the World Bank Group (MIGA) has issued a guarantee to Banco Bilbao Vizcaya Argentaria, S.A. of Spain (BBVA) against the risk of Non-Honoring of Financial Obligations of a State-Owned Enterprise of a loan of up to 1 trillion Colombian pesos (approximately $240 million) to Financiera de Desarrollo Nacional S.A. (FDN) for a period of up to 10 years.
The loan provided by BBVA is made in Colombian pesos, and the MIGA guarantee is also denominated in the local currency. FDN is using approximately half the proceeds for on-lending to climate finance projects in areas such as renewable energy, urban mobility, water and sanitation, and energy efficiency. The other half is being used to offer financing for road projects throughout Colombia.
“MIGA’s guarantee will support Colombia’s effort to diversify the country’s energy mix while also promoting economic development and job creation,” said Hiroshi Matano, MIGA Executive Vice President. “Likewise, improving Colombia’s road infrastructure is of critical importance as it handles the vast majority of the country’s internal transport. Better roads will decrease transportation costs and support overall economic activity.”
FDN, a development bank majority-owned by the government of Colombia, specializes in developing and implementing infrastructure projects in the country. It is uniquely positioned to contribute to Colombia’s economic recovery from the COVID-19 pandemic and foster growth.
FDN is expected to use part of the MIGA-covered loan to promote urban mobility projects, contributing to electrification of public transportation in big cities and extending public transit options that will reduce greenhouse gas emissions and improve access to jobs, and to finance renewable energy projects.
FDN will use the remaining proceeds of the MIGA-covered loan in support of projects of the 4G and 5G road concession programs that will contribute to the modernization of the country’s aging road infrastructure. It is expected that these projects will generate significant benefits, including reduction in travel time, improved trade, job creation, and business growth
"This loan, which is in line with our funding strategy and commitment to adopt ESG criteria, allows us to secure resources under favorable conditions to finance green and social infrastructure projects of great impact to the country,” said FDN President Francisco Lozano. “This contributes to the well-being of Colombians and to the development of Colombia.”
Colombia is among the countries in Latin America most at risk from climate events. Economic losses associated with climate-related risks such as floods, droughts, heat stresses, landslides, flash floods, and fires are increasingly affecting the country and are threatening its economic recovery. In this context, the government has set some of the most ambitious goals in the region to reduce GHG emissions and address climate change.
Road infrastructure is critically important to Colombia’s economy, given that it handles up to 80 percent of the country’s transport. The country’s infrastructure lags behind some regional peers, in part due to its complex geography, but also to insufficient investment. FDN’s activity has traditionally focused on road concessions and other strategic transport projects that are considered a priority for economic growth. MIGA’s guarantee will help FDN continue supporting projects in this key economic sector.
“We are proud to partner with FDN to improve urban mobility, road infrastructure and renewable energy projects. The world is changing rapidly and we must embrace these changes supporting transformative technologies and decarbonization,” said Jose Ramón Vizmanos, Head of Global Client Coverage at BBVA. “Our cooperation with MIGA is key to providing pioneering solutions to support our clients in redefining the world. Sustainability is one of our strategic priorities and the recognition as Europe's most sustainable bank for the third consecutive year reaffirms the success of our strategy.”
Financiera de Desarrollo Nacional is a private, specialized, technical, and independent development bank that works to increase liquidity in the infrastructure sector. Its specialization and knowledge in structuring and financing allows it to design sophisticated and innovative solutions, aimed at properly managing risks, attracting investors and funders to participate in financing schemes for infrastructure projects.
BBVA is a customer-centric global financial services group founded in 1857. The Group has a strong leadership position in the Spanish market, is the largest financial institution in Mexico, and has leading franchises in South America. It is also the leading shareholder in Türkiye’s Garanti BBVA and has an important investment, transactional and capital markets banking business in the United States. Its purpose is to bring the age of opportunities to everyone, based on our customers’ real needs: provide the best solutions, helping them make the best financial decisions, through an easy and convenient experience. The institution rests on solid values: Customer comes first, we think big and we are one team. Its responsible banking model aspires to achieve a more inclusive and sustainable society.
MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies by helping mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war & civil disturbance; and offering credit enhancement to private investors and lenders.
Since its creation, MIGA has issued nearly $70 billion in guarantees across 122 developing countries in support of nearly 1,000 projects.
Elizabeth Howton, (202) 458-5922, email@example.com
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