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The International Finance Corporation (IFC), part of the World Bank Group, together with the Japan International Cooperation Agency (JICA), has completed the provision of a $400 million green finance package to BBVA in Peru. This initiative is designed to bolster sustainable building and energy efficiency projects across the nation.

Initiated in June 2023 by the IFC with a $150 million contribution, the scheme reached its final phase with a signing event at BBVA’s premises in Lima. The disbursement of the concluding $250 million was confirmed at the event. JICA is set to co-finance $150 million of this amount.

This green finance endeavour by the IFC and JICA is set to enhance BBVA’s lending capabilities for sustainable building projects in Peru. It encompasses advisory services to aid real estate developers in obtaining EDGE and LEED certifications for various types of buildings including residential, industrial, and commercial.

Moreover, the IFC will assist BBVA in aligning with environmental, social, and governance (ESG) standards. Additionally, the funds will support the development of energy-efficient projects. BBVA disclosed this finance agreement to the Superintendence of the Securities Market in March 2023.

Alfonso García Mora, IFC’s Vice President for Europe, Latin America, and the Caribbean, said, “The sustainable construction sector is still underdeveloped in Peru. In addition to being a strong step in the right direction, this financing aspires to be part of a series of ongoing efforts aimed at ensuring that sustainability is the norm in the construction industry of the Peruvian nation. We are honored to work alongside BBVA to promote sustainability, inclusion and productivity in the country.”

Takashi Nishimura, JICA’s Resident Representative in Peru, highlighted the critical connection between climate change and contemporary societal challenges. He said, “Therefore, the growth and development of the country must go hand in hand with actions to mitigate the effects of climate change to achieve sustainable development over time. In this context, green finance that promotes the construction of ecological buildings that comply with international standards is of great importance. This is exactly the objective of this joint project with BBVA.”

Fernando Eguiluz, CEO of BBVA in Peru, remarked on the bank’s strategy, “a fundamental part of the bank’s strategy is to have a solid portfolio of products that help people in the transition to a greener and more sustainable world.” He further noted, “the agreement with the IFC and JICA will promote high-impact sustainable initiatives in the country for the benefit of all sectors of the population.”

Looking ahead, the IFC forecasts a notable investment opportunity in green buildings within emerging markets, projecting a potential $24.7 trillion by 2030. With cities in these markets growing rapidly to accommodate increasing populations and urbanisation, the total floor area of buildings is expected to double by 2060, predominantly in residential construction within middle-income countries.