IFC Invests in Davivienda’s Biodiversity Green Bond to Promote Sustainable Practices in Colombia
Cali, Colombia, October 28, 2024 – In a significant move towards promoting sustainable finance and biodiversity conservation, the International Finance Corporation (IFC), a member of the World Bank Group, has announced an investment of up to US$50 million in a biodiversity green bond issuance by Banco Davivienda. This initiative aims to finance projects dedicated to conserving, protecting, and restoring Colombia’s rich biodiversity, a crucial step in addressing environmental challenges in the region.
Financing Biodiversity Projects
The proceeds from the biodiversity bond will be allocated to a variety of projects that focus on climate-smart and regenerative agriculture, reforestation, and sustainable freshwater and marine production. By channeling funds into these initiatives, Davivienda is set to play a pivotal role in promoting sustainable practices that align with the preservation of Colombia’s diverse ecosystems. This bond issuance is not just a financial instrument; it represents a commitment to environmental stewardship and sustainable development.
Davivienda’s Commitment to Sustainability
As the second-largest bank in Colombia, with a presence extending to Central America, Davivienda has demonstrated a robust commitment to sustainability. The bank has set an ambitious goal of ensuring that at least 30 percent of its loan portfolio comprises sustainable loans by 2030. This commitment is further strengthened by IFC’s support, which includes advisory services aimed at enhancing Davivienda’s green framework. Through this collaboration, Davivienda will improve its capacity to identify, finance, and monitor biodiversity projects effectively.
Innovative Financing for Biodiversity
The participation of IFC in this bond issuance marks a significant milestone, as it supports the second biodiversity bond to be issued globally. This innovative financing instrument is expected to attract interest from international investors who prioritize sustainable finance. IFC’s involvement not only enhances the credibility of the bond but also mobilizes essential resources for biodiversity protection. This initiative is part of a broader effort by the World Bank Group, in collaboration with the Financial Superintendency of Colombia, to integrate biodiversity considerations into Colombia’s green taxonomy.
A Vision for Sustainable Development
Alfonso García Mora, Vice President of IFC for Europe, Latin America, and the Caribbean, emphasized the importance of this investment, stating, “IFC and Davivienda have a long track record of working together to promote Colombia’s sustainability. This investment in the biodiversity bond aims to increase access to financing for initiatives that conserve, restore, and protect Colombia’s biodiversity.” His remarks underscore the shared vision of both organizations to foster sustainable development and environmental protection in Colombia.
Expected Environmental Impact
The investment in Davivienda’s biodiversity bond is anticipated to yield significant environmental benefits, contributing to biodiversity conservation and fostering positive outcomes for nature. IFC envisions that this project, alongside policy dialogues and advisory services, will inspire other market participants in Latin America and the Caribbean to offer biodiversity debt instruments. This could catalyze the growth of sustainable finance markets and promote a nature-based economy throughout the region.
Davivienda’s Role in Sustainable Agriculture
Javier Suárez, President of Davivienda, highlighted the bank’s commitment to supporting clients in adopting agricultural practices that promote sustainability. He stated, “We accompany and encourage our clients in the adoption of agricultural practices that promote reforestation, the use of biological alternatives for crop nutrition, the protection of native species, and climate resilience with nature-based solutions.” Through the biodiversity bond, Davivienda aims to finance projects with agrosustainable certifications that mitigate land-use change and conserve sensitive ecosystems.
Context of the Announcement
The announcement of the bond issuance coincided with the COP16 activities held in Cali, Colombia, from October 21 to November 1. This timing reflects the global urgency to address climate change and biodiversity loss, positioning Colombia as a key player in the international dialogue on sustainable development.
About Davivienda
Davivienda is committed to simplifying the financial lives of individuals, communities, businesses, and cities. With a workforce of over 18,000 employees and a customer base exceeding 24.3 million, the bank operates more than 660 branches and 2,800 ATMs across Colombia and its international subsidiaries. As part of the Bolívar Group, Davivienda is dedicated to financial inclusion and sustainable development.
About IFC
The International Finance Corporation (IFC) is the largest global development institution focused on the private sector in emerging markets. Operating in over 100 countries, IFC leverages its capital, expertise, and influence to create markets and opportunities in developing nations. In fiscal year 2024, IFC committed a record $56 billion to private companies and financial institutions, underscoring its commitment to fostering a world free of poverty on a livable planet.
For more information about IFC, visit www.ifc.org.
This investment by IFC in Davivienda’s biodiversity bond is a promising step towards fostering sustainable finance and protecting Colombia’s invaluable natural heritage. As the world increasingly recognizes the importance of biodiversity, initiatives like this will be crucial in ensuring a sustainable future for generations to come.