IDB Invest, a member of the IDB Group, is mobilizing financing worth $80 million for the Ecuadorian company Corporación Favorita C.A., the largest self-service store chain in Ecuador and one of the largest companies in the country.
The deal involves a resource mobilization financing with funds from IDB Invest to Corporación Favorita in 2020. A separate $230 million loan will serve to partially finance the company's multi-year growth plan in Ecuador. Resource mobilization, on the other hand, will support its expansion in Panama through the construction of a new national distribution center for its subsidiary Rey Holdings Corp., one of the largest self-service chains in that country.
The financing seeks to increase the access of the local population to quality products both in Ecuador and Panama, also having a positive impact on Corporación Favorita’s value chain. The deal also provides for increased employment, growth in exports of products from small- and medium-sized Ecuadorian companies to Panama, and greater accessibility to quality food and products in underserved areas due to a greater number of points of sale.
The financial package, led by IDB Invest and syndicated with seven international banks, includes an uncommitted $5.5 million worth of blended financing from the Canadian Climate Fund for the Private Sector of the Americas (C2F). C2F's participation will focus on the installation of photovoltaic solar roofs to meet on-site energy needs.
The deal potentially contributes to three of the United Nations Sustainable Development Goals: Decent Work and Economic Growth (SDG 8), Responsible Consumption and Production (SDG 12) and Partnerships for the Goals (SDG 17).
As a result of the work with IDB Invest, Corporación Favorita is committed to improving the functioning of its corporate governance and its environmental and social risk management system. In addition, the advisory services will support Corporación Favorita in the implementation of actions aimed at increasing gender equality, diversity and inclusion in the company.
About IDB Invest
IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social and environmental development in the region. With a portfolio of $13.1 billion in asset management and 385 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries
About Corporación Favorita
The Ecuadorian company was born in 1952 as a small venture for the sale of household items, in downtown Quito; in 1957, it became the first self-service store in the country. At present it develops its activities with subsidiary firms in the commercial, industrial and real estate sectors; it’s one of the largest job-creators in the country and was one of the first national firms to open its capital to the public, in 1976. The value chain of the company and its subsidiaries, in Ecuador and Panama, is made up of more than 18,000 direct collaborators; a network of 11,000 small, medium and large providers; and, more than 18,000 shareholders, of which around 30% are associates and former company associates. It is estimated that the activities of the company and its subsidiaries also generate about 260,000 indirect jobs. Corporación Favorita permanently seeks to improve the quality of life of all those involved in its value chain, offering the best products, services and experiences, in an efficient and sustainable way, being responsible with society and the environment.