MICROCAPITAL BRIEF: IFC to Loan $50m to Itaú Argentina for SMEs, “Green” Lending

The International Finance Corporation (IFC), a member of the World Bank Group, recently agreed to provide Itaú Argentina, a subsidiary of Brazil-based Itaú Unibanco, with USD 15 million to expand funding for small and medium-sized enterprises (SMEs) as well as USD 35 million for “sustainable” energy projects. The energy projects “will be certified under the Green Loan Principles,” which were established by the Loan Market Association, a UK-based group of 660 lenders and other organizations, to “increase transparency in the market by ensuring that borrowers apply the funding to green projects and conduct evaluation and reporting following international standards.” IFC and Itaú Argentina expect that this investment will prevent the emission of nearly 35,000 tons of carbon dioxide per year.

As of 2017, Itaú Unibanco has total assets of BRL 1.43 billion (USD 337 million), a gross loan portfolio of BRL 493 million (USD 118 million) and BRL 403 million (USD 97.6 million) in client deposits.

IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2017, it has 184 member countries and total assets of USD 92.3 billion.

The World Bank Group is a multilateral organization whose goal is “to end extreme poverty and promote shared prosperity in a sustainable way.” As of 2018, it has 189 member nations. The group encompasses (1) the International Bank for Reconstruction and Development and the International Development Association, which make up the World Bank; (2) IFC; (3) the Multilateral Investment Guarantee Agency; and (4) the International Centre for Settlement of Investment Disputes. During 2017, the World Bank Group disbursed a total of USD 44 billion.

By Michelle Fleming, Research Associate

Sources and Additional Resources

Press release: IFC Provides $50 to Itaú Argentina
https://ifcextapps.ifc.org/ifcext/pressroom/ifcpressroom.nsf/1f70cd9a07d692d685256ee1001cdd37/f042bd47a54b333f852582eb00519140

Bloomberg: Itaú Argentina
https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapid=9477881

Itaú Unibanco Financial Report 2017
https://www.itau.com.br/_arquivosestaticos/RI/pdf/en/Itau_RAC_2017_ing.pdf?title=Consolidated%20Annual%20Report%202017

Loan Market Association homepage
https://www.lma.eu.com/legal-regulatory

MicroCapital Brief: International Finance Corporation (IFC) Syndicates $81m Loan for Banco Industrial do Brasil (BIB) to Support Small, Medium-sized Enterprises (SMEs)
https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-syndicates-81m-loan-banco-industrial-brasil-bib-support-small-medium-sized-enterprises-smes/

MicroCapital Brief: IFC Issues $2b in Bonds for Climate-focused, Infrastructure, Women-entrepreneurship Projects in Developing Countries
https://www.microcapital.org/microcapital-brief-ifc-issues-2b-in-bonds-for-climate-focused-infrastructure-women-entrepreneurship-projects-in-developing-countries/

World Bank homepage
https://www.worldbank.org

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