IDB Invest Supports Global Bank in the Expansion of its Green Portfolio in Panama
- Financing includes the mobilization of resources from international banks, including Banco Santander.
IDB Invest and Global Bank Corporation, one of the main private banks in Panama, have signed an up to US$100 million loan to support the financing and expansion of its green portfolio. The agreement was announced at the FELABAN Annual Assembly, which is held in Miami, Florida between November 3 and 6, with the participation of Marisela Alvarenga, managing director of the Financial Sector Division of IDB Invest, and Otto Wolfschoon, deputy general manager and executive vice president of Global Bank.
The 5-year tenor deal seeks to solidify Global Bank's strategy and specialized offering in green finance. IDB Invest reinforces its commitment to contribute to promoting green portfolios in Panama, funding up to $50 million of the loan, up to $40 million of which will be contributed by IDB Invest, and up to $10 million through blended financing. Likewise, the project has attracted additional investors, including Banco Santander, who contributed an additional $50 million, to add up to the total $100 million financing package.
Panama is one of three countries worldwide that has the “carbon negative” classification, meaning that they absorb more greenhouse gases (GHG) than they emit; however, Panama is vulnerable to the effects of climate change, such as, the increase in sea level or the decrease in its aquifer sources. Panama has committed to reducing its net carbon dioxide emissions by 20% by 2030, which is aligned with the goals of the Paris Agreement by 2050.
The project has a blended financing component, through support from the Canadian Climate Fund for the Private Sector of the Americas – Phase II (C2F2), which includes a set of performance-based incentives to support green portfolio goals and corporate objectives to adopt best practices in climate-risk disclosure. IDB Invest will also provide Global Bank with advisory services.
During the signing, Marisela Alvarenga, managing director of the Financial Sector Division of IDB Invest, said: “At IDB Invest we are committed to supporting our clients with a value proposition to mitigate and adapt to the effects of climate change. We are proud to join forces with Global Bank, and promote the growth of climate investment in Panama. We are catalyzing additional investment from international partners, a mixed financing component aligned with the goals of both institutions, and providing robust and high-impact technical advice.”
Otto Wolfschoon, executive vice president of Global Bank, said: "This deal allows us to continue promoting one of the most important strategic pillars for Global Bank, which is the sustainable development of our environment through financing to clients that contribute to creating more inclusive and environmentally responsible businesses. For us it is a pride to be one of the leading banks in Panama in attracting funding with a sustainable and inclusive approach, and thus give continuity to the environmental and social action plan that we have been executing in the bank for several years."
IDB Invest financing is complemented by advisory services to consolidate Global Bank's position as Panama's leading bank in sustainable finance, to expand its planning process and to accelerate the implementation of the Recommendations of the Working Group on Financial Disclosures Related to Climate Change (TCFD), considered best practice for climate management in financial institutions. This will allow Global Bank to continue aligning itself with the Paris Agreement objectives.
Likewise, the deal will help support Global Bank in its strategic approach to green finance and in improving the segmentation of its women's credit portfolio. The financing will also have an environmental and social action plan that will strengthen its internal policies.
This deal is expected to contribute to the following United Nations Sustainable Development Goals (SDGs): Responsible Production and Consumption (SDG 12), Climate Action (SDG 13), and Partnerships for the Goals (SDG 17).
About IDB Invest
IDB Invest, a member of the Inter-American Development Bank 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 $16.3 billion in assets under management and 394 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 Global Bank Corporation
Global Bank Corporation is a Panamanian regulated financial institution that offers a wide range of financial products and services through diversified geographic coverage. Global Bank is the second largest Panamanian capital bank in terms of its loan portfolio and total assets. Additionally, it provides corporate, SME, commercial and personal banking services through an extensive platform of distribution channels that include: 33 branches, 2 innovation centers, 154 ATMs nationwide and online banking. Global Bank has been characterized by its focus on responsible banking and commitment to the sustainable economic development of Panama by implementing a Sustainability Strategy and advancing the reduction of GHG emissions in its portfolio. The Bank is 100% owned by GB Group Corporation ("GB Group"), domiciled in Panama, being a holding company that consolidates the different businesses of the group (banking, insurance and pensions).