MICROCAPITAL BRIEF: Eco.business Fund Loans $10m to Banco Davivienda Costa Rica to Promote Biodiversity

The Luxembourg-based eco.business Fund, which was launched in 2014, announced recently that it has lent USD 10 million to Banco Davividenda Costa Rica, a unit of Colombia’s Bolivar Group, for on-lending to companies that work in sectors such as agriculture, forestry and fisheries, and are certified for their sustainability and contribution to biodiversity by entities such as the Germany-based FairTrade International or the US-based Rainforest Alliance. Referring to the recent financing, Dr. Jens Mackensen, the Chairperson of the Board of Directors of the eco.business Fund, said that the entity is “delighted to team up with Banco Davivienda Costa Rica, a dynamic and forward-looking institution focused on selecting responsible agricultural clients and on the sustainable use of natural resources.” Referring to Costa Rica as the first active country for the fund’s investments, Dr. Mackensen added, “Local support for our mission is strong and so is awareness of the importance of environmental protection.”
The eco.business Fund will also assist Banco Davivienda in promoting businesses getting biodiversity certification through in-house technical workshops. Arturo Giacomin, the CEO of Banco Davivienda Costa Rica, said that his organization strongly supports the efforts of companies to achieve sustainability and is “proud to contribute to their growth as part of an economic strategy for the country.”

The seed capital of EUR 17 million (approximately USD 19 million) for the eco.business Fund was provided by the German Federal Ministry for Economic Cooperation and Development (also known by its German acronym BMZ), with the German development bank Kreditanstalt für Wiederaufbau Entwicklungsbank (KfW) serving as the project leader.

For the half-year ended June 30 2014, the Banco Davividenda Costa Rica’s reported net income was USD 3.3 million.

By Arpita Sarkar

About eco.business Fund

The eco.business Fund was launched in late 2014 to promote the conservation of biodiversity and sustainable use of natural resources through financing and technical assistance. It is structured as a public-private partnership that receives contributions from donors, multilateral organizations and development finance institutions. The seed capital of EUR 17 million (approximately USD 19 million) for the fund was provided by the German Federal Ministry for Economic Cooperation and Development (also known by its German acronym BMZ), with the German development bank Kreditanstalt für Wiederaufbau Entwicklungsbank (KfW) serving as the project leader [1]. The fund’s other investors include the impact asset management firm Finance in Motion, which is headquartered in Frankfurt, and the US-based NGO Conservation International.

The fund provides financing mainly to financial institutions for on-lending to promote activities that conserve nature and biodiversity. Eligible end-borrowers include both to companies that hold eligible certifications and those which aim to make adjustments to meet the fund’s nature and biodiversity conservation goals. It invests in sectors including agriculture, fishery, forestry and eco-tourism seeking both financial and environmental returns. Technical assistance to the lending institutions and eligible end-borrowers are provided through the eco.business Development Facility.

About Banco Davivienda Costa Rica

Founded in 2006, Banco Davivienda Costa Rica (formerly known as Banco HSBC Costa Rica S.A.) is a financial institution that operates in the corporate and retail banking sectors. It belongs to the Bolivar Group, a conglomerate based in Colombia. It offers various financial products and services, including trade products, corporate credit facilities, credit cards, payments and cash management, treasury services, insurance, asset management and brokerage house services. For the half-year ended June 30 2014, the company’s reported net income was USD 3.3 million [2].

Sources and Additional Resources:

[1] eco.business Fund Press Release: “Finance in Motion, KfW and Conservation International launch first biodiversity fund in Latin America, http://www.ecobusiness.fund/fileadmin/user_upload/downloads/2014-12_Finance_in_Motion__KfW_and_Conservation_International_launch_first_biodiversity_fund_in_Latin_America.pdf

[2] Bloomberg profile: Banco Davivienda (Costa Rica), S.A.: http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapid=20551769

eco.business Fund Press Release: “eco.business Fund and Banco Davivienda Costa Rica team up to support biodiversity,” http://www.finance-in-motion.com/media/public/pdf/press-releases/2015/2015-05-ecobusiness-fund-and-banco-davivienda-team-up-to-support-biodiversity.pdf

MicroCapital Universe Profile: Banco Davivienda Costa Rica, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Banco+Davivienda+Costa+Rica

MicroCapital Universe Profile: eco.business Fund,  https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=eco.business+Fund#Contact_Information

MicroCapital Universe Profile: KfW, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=KfW+Entwicklungsbank+%28KfW%29

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