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BANCO PICHINCHA
In Ecuador, Proparco has subscribed to a green bond issue by the bank “Banco Pichincha” to support the financing of projects that improve the energy efficiency of its clients. The project should help Ecuador achieve its objectives for a low-carbon path set out in the Paris Agreement.
Client presentation

The bank “Banco Pichincha” is Ecuador’s leading bank. It has been a client of Proparco since 2012. It is a universal bank and the leader on the microfinance market. It is a private bank, the majority shareholder being Fidel Egas Grijalva, which holds over 90% of the capital.  

Project description

The project involves Proparco’s subscription to a “green” bond issued by Banco Pichincha. The financing will go towards projects that improve the energy efficiency of its clients. The project should help Ecuador achieve its objectives for a low-carbon path set out in the Paris Agreement.

The issue is listed on the Quito Stock Exchange and has a 5-year maturity. It is structured for a maximum amount of USD 250m. Tranche A (USD 150m), which was issued on 20/12/2019, was subscribed to by Proparco with USD 50m (including a 50% AFD subparticipation), alongside IFC (USD 50m), IDB and IDB Invest (USD 25m each).

Project impact

Two-thirds of the green bond issue by Banco Pichincha should go towards financing new projects, mainly in the renewable energies, energy efficiency and water saving sectors. 

While the projects could have major impacts in terms of reducing the carbon footprint of SMEs and effects on the indirect jobs of these companies, it will only be possible to accurately estimate them when the portfolio has been put together. The eligibility criteria for underlying projects have been defined collectively by the 4 investors and BP. Furthermore, each project financed by the bank will be assessed by an independent expert who will confirm that the operation complies with the Green Bond Principles. 

Impacts are also expected in terms of effects on the private sector through training on the health, safety and environmental aspects which BP offers to some of its clients.

12/12/2019
Date of signature of the project
Ecuador
Location
Financing tool
47 376 168 Euros
Amount of funding
USD 50m loan
Financing details
BANCO PICHINCHA
Client
CES