The European Investment Bank (EIB), the long-term lending institution of the EU, recently loaned USD 100 million to Corporación Financiera de Desarrollo (COFIDE), a development bank owned by the Peruvian government, to provide support to small businesses and projects to reduce the climate impacts of energy usage. This includes investments in equipment that improves energy efficiency or creates renewable energy. COFIDE plans to direct the funding via commercial banks, including USD 30 million that is earmarked for small and medium-sized enterprises negatively affected by the COVID-19 pandemic. To support these efforts, the Latin America Investment Facility (LAIF), an entity of the EU, is donating EUR 3.7 million (USD 4.5 million) for technical support to “COFIDE’s environmental and social risk management systems.”
COFIDE aims to promote “sustainable” and “socially responsible” development in Peru. Its areas of focus include decentralized financial services as well as supporting micro-, small and medium-sized enterprises (MSMEs). In response to the COVID-19 pandemic, it created the “Reactiva Peru” fund, directing USD 60 billion to struggling companies.
The goal of LAIF is to promote “equitable” and “sustainable” socioeconomic development within Latin America by bringing public money to projects that include private funding. It is active in sectors such as MSME, clean water, renewable energy and energy efficiency in 17 countries. During 2019, LAIF mobilized EUR 1.5 billion (USD 1.8 billion), including EUR 69 million (USD 84 million) from its own accounts.
Founded in 1958, EIB is “focused on innovation, SMEs [small and medium-sized enterprises], infrastructure and climate,” primarily in EU member states and potential future member states. During 2019, the institution disbursed EUR 48 billion (USD 57 billion), about 90 percent of which it deployed within the EU.
By Sai Bommineni, Research Associate
Sources and Additional Resources
EIB press release
https://www.eib.org/en/press/all/2020-390-european-investment-bank-provides-usd-100m-to-cofide-to-support-smes-and-climate-projects-in-peru
EIB homepage
https://www.eib.org
EIB Facts and Figures 2019
https://www.eib.org/attachments/general/the_eib_group_facts_and_figures_2019_en.pdf
COFIDE homepage
https://cofide.com/
COFIDE initiatives
https://www.cofide.com.pe/COFIDE/detalles1.php?id=1
LAIF homepage
https://www.eulaif.eu
LAIF financials
https://www.eulaif.eu/en/facts-figures
Previous news on EIB by MicroCapital.
https://www.microcapital.org/?s=EIB
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