IDB Invest, a member of the IDB Group, provided a loan in local currency for the equivalent of $40 million to Los Portales S.A. to finance urban development and social housing projects. The use of the financing includes the purchase of new land for the development of these urban projects.
The deal will allow Los Portales to expand its urban development capacity for low-income families, increase financing to purchase land and expand the supply of social and sustainable housing. Los Portales’ growth will help build more urban developments for low-income populations to access decent housing.
Los Portales' investment plan includes the acquisition of several plots, which will offer access to financing to first-time homeowners for more than 10,000 families in multiple cities in Peru. The goal is to offer a better quality of life, allowing families to acquire urban lots in a formal manner, which includes adequate water standards, electricity and sewage services, green areas and public spaces. In addition, once the payment of the lot has been canceled in the future, the families could benefit from having access to financing from banks, since they would be able to use their land to obtain a mortgage loan.
The available supply of low-income housing in Peru is limited and fails to cover the country's housing deficit. The investment plan to which IDB Invest financing contributes favors the closing of this gap. In addition, 60 new permanent jobs will be created and the construction sector will be strengthened by supporting the Los Portales value chain, made up of a large number of SME suppliers across the country.
This operation potentially contributes to four of the United Nations Sustainable Development Goals (SDGs): No Poverty (SDG 1), Decent Work and Economic Growth (SDG 8), Sustainable Cities and Communities (OSD 11) and Responsible Consumption and Consumption (SDG 12).
Facilitating access to decent housing is one of IDB Invest's objectives to improve the lives of citizens in Latin America and the Caribbean through its work with the private sector. In the context of the economic crisis generated by the COVID-19 pandemic, supporting the growth of the supply of social housing is essential to promote the health, safety and future development of Peruvian families and of the country as a whole.
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 $12.1 billion in asset management and 333 clients in 24 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.
About Los Portales
Los Portales was created on the basis of GR Holding SA, a company owned by the Raffo Group, a Peruvian economic group dedicated to real estate development, urban empowerment, social and residential housing, operation of parking lots and hotels since the 1960s and Grupo ICA of Mexico. Across 18 cities and 13 provinces of Peru, the company operates with four business units: Urban Development and Social Housing Unit, Parking Unit, Multifamily Unit and Hotels Unit. Los Portales is the largest Peruvian real estate company in terms of revenue with an estimated market share of 38 percent in the development of urban empowerment projects in the country.