IDB Invest, a member of the Inter-American Development Bank (IDB) Group, recently arranged a social bond issue in the amount of USD 75 million to benefit the Banco Nacional de Costa Rica (BNCR), a government-owned bank. The funding is intended to reinforce BNCR’s capital position and increase its financing of micro-, small and medium-sized enterprises (MSMEs) in Costa Rica. IDB Invest will purchase a portion of the bonds totaling USD 45 million, and the Canadian government’s FinDev Canada will invest USD 30 million in the issue.
BNCR has committed to directing 40 percent of the bond proceeds to MSMEs led by women. To support this effort, FinDev Canada collaborated with BNCR to strengthen and expand BNCR’s financial products in line with the UN’s Women’s Empowerment Principles (WEPs). The bond issue has been certified as conforming to the Social Bond Principles of the Switzerland-based International Capital Market Association.
BNCR was established in 1914 and serves individuals and companies of all sizes with total assets of USD 7.2 billion as of 2020. In addition to banking services, BNCR offers fund management, insurance, pension and brokerage services.
IDB Invest seeks to promote economic development through projects in agriculture, financial inclusion, sustainable energy and transportation. As of 2020, it had USD 16.1 billion in development-related assets, deployed via approximately 400 clients in 47 countries. Established in 1959, IDB Group works to promote “environmentally friendly” economic development via improved health, education and infrastructure in Latin America and the Caribbean. During 2020, it reports having issued USD 14 billion in loans and grants, ending the year with assets of USD 152 billion.
FinDev Canada, also known as the Development Finance Institute Canada, was established in 2018 as a subsidiary of Export Development Canada, a government-owned export credit agency. The goal of FinDev Canada is to support job creation and the economic empowerment of women. The institution is active in the private sector in Latin America and the Caribbean as well as sub-Saharan Africa via direct loans, guarantees, structured financing and equity placements. In 2020, FinDev Canada signed new commitments valued at USD 201 million (CAD 257 million).
By Hasnat Aslam, Research Associate
Sources and Additional Resources
IDB Invest press release
https://www.idbinvest.org/en/news-media/idb-invest-findev-canada-bncr-issue-costa-ricas-first-social-bond
BNCR homepage
https://www.bncr.fi.cr/
International Capital Market Association homepage
https://www.icmagroup.org/
WEPs homepage
https://www.weps.org/
FinDev Canada homepage
https://www.findevcanada.ca/
Previous MicroCapital news about FinDev Canada
https://www.microcapital.org/microcapital-brief-idb-invest-dfc-findev-canada-loan-390m-to-davivienda-of-colombia-for-smes-environmental-sustainability-women/
More news from MicroCapital about IDB
https://www.microcapital.org/?s=idb
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