MIGA Supports Local Currency-Denominated Lending for Climate Finance, Health, and Education Projects in Colombia
WASHINGTON, D.C., November 28, 2022 — The Multilateral Investment Guarantee Agency of the World Bank Group (MIGA) has issued a guarantee to JPMorgan Chase Bank N.A. amounting to 877 billion Colombian pesos ($201 million) to cover a loan to Financiera de Desarrollo Territorial S.A. (Findeter), a development bank that is majority-owned by the government of Colombia.
The three-year guarantee protects the bank against the risk of non-payment of the loan, which will be made in Colombian pesos. MIGA’s guarantee will also be denominated in the local currency.
Findeter will use the loan’s proceeds to finance its lending operations in Colombia. A major portion of the loans will go to climate finance projects that will contribute to Colombia’s objectives of diversifying its energy mix and fostering a green economic recovery. The loan will also support investment projects in the key strategic social sectors of education and health, which were severely impacted by the effects of the COVID-19 pandemic. It is anticipated that these projects will involve the expansion of current infrastructure, research and development, procurement of equipment and machinery, and maintenance work to improve the delivery of educational and health services.
“MIGA’s guarantee will facilitate commercial financing in local currency at longer tenors than currently available in the domestic market,” said Hiroshi Matano, MIGA Executive Vice President. “We are pleased to help Colombia make progress toward its climate goals and build resilience in other key economic sectors such as health and education.”
Findeter is a development bank created to support economic and social development in Colombia by generating access to credit resources and technical services for investments in key economic sectors. It operates mainly as a second-tier bank, providing rediscount loans to private and public financial intermediaries, which in turn lend the funds to local departments and municipalities, as well as public and private companies involved in regional or urban infrastructure development.
Findeter is uniquely positioned to contribute to the country’s sustainable economic recovery and growth. MIGA’s coverage will support Findeter’s local lending operations while addressing the domestic shortage of longer-term funding sources. Findeter will be in a stronger position to manage its liquidity constraints over the next three years, allowing it to continue supporting regional and urban infrastructure development at the same pace and with the same favorable terms.
“JPMorgan is proud to have worked in a trailblazing local currency transaction for Findeter in partnership with MIGA to support projects that address climate change and social inclusion in Colombia,” said Geraldo Guanaes, Executive Director at JPMorgan.
With respect to climate finance activities, Findeter has agreed to implement a climate finance action plan, which includes developing a procedure to screen projects in alignment with MIGA’s eligibility criteria and methodology and providing training to its staff on this topic.
About JPMorgan Chase Bank, N.A.
JPMorgan Chase (NYSE: JPM) is a leading financial services firm based in the United States of America, with operations worldwide. JPMorgan Chase had $3.7 trillion in assets and $294.1 billion in stockholders’ equity as of December 31, 2021. The firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. Under the J.P. Morgan and Chase brands, the firm serves millions of customers in the United States and many of the world’s most prominent corporate, institutional and government clients globally. For more information, please see www.jpmorganchase.com.
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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