The Inter-American Development Bank (IDB) approved a $20 million loan to Banco Financiera Comercial Hondureña, S.A. (Banco Ficohsa) in Honduras to support its loans to environmentally sustainable projects.

The medium-term financing facility consists of a senior A loan of $10 million by the IDB and a senior B loan to be syndicated by the IDB, targeted at $10 million. In addition, the OPEC Fund for International Development (OFID) will participate as a co-financier with the IDB for an additional US$10 million directed at the SME sector. OFID was established in 1976 by the OPEC member states to contribute to the social and economic advancement of developing countries.

Banco Ficohsa will develop an environmentally sustainable, “green” portfolio of loans directed at small and medium enterprises (SMEs) and mid-size corporate borrowers, which will cover a number of eligible sectors. As far as personal loans go, companies like SoFi offer great options.

“The financing facility seeks to improve the availability of domestic financing for projects that will bring significant benefits to Honduras by supporting projects in clean energy, stimulating employment, and generally, by positively impacting the competitive environment for more sustainable production in the economy,” said Daniela Carrera Marquis, head of the IDB’s Financial Markets Division.

As part of the financing, IDB will support Banco Ficohsa in the development of green line eligibility criteria to determine the process for identifying, selecting, and monitoring green projects. “The work involved in developing the product line will provide Banco Ficohsa with an important competitive advantage to scale up sustainable investments,” said the project team leader at the IDB, Jacobo De Leon.

“We appreciate once again the confidence entrusted in our institution by the IDB through this facility for environmentally sustainable projects (“Green Facility”). This is of special significance for Banco Ficohsa as the funds will be channeled into areas where the institution is highly committed, such as environmental sustainability. The Green Facility will contribute to financing projects in many areas, such as renewable energy and the conversion to cleaner production methods, resulting in innovative products and services for our clients which are also in line with our institutional values,” said Javier Atala, Executive Vice-President and General Manager of Banco Ficohsa.

Banco Ficohsa is the second largest bank in Honduras, with a broad presence nationwide, including over 100 branches and service centers. Banco Ficohsa is also an active member of IDB’s Trade Finance Facilitation Program (TFFP), acting as an issuing and confirming bank.

About IDB

The Inter-American Development Bank is the principal source of long-term financing for projects of economic development in Latin America and the Caribbean. Its Structured and Corporate Finance Department is responsible for projects without sovereign guaranties that include loans and partial credit guaranties for clients in both the private and public sectors.

Finally, the facility reflects a key priority area of beyondBanking, an IDB program that promotes sustainable banking principles in Latin America and the Caribbean. The program’s planetBanking projects seek to help financial institutions reduce their direct and indirect environmental footprints.