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DCM Project #15

Project number 12114-02
Country Colombia
Status In implementation

Basic information

Company name
N/A
Investment type Not Specified
E&S category
FI-3
Disclosed date
Projected board date
Approval date
Signed date
Team Leader
Acuna Cubillos, Piedad Lucia

Financial Summary

Financing Currency
COP

Client
information

N/A

PROJECT
SCOPE
AND
OBJECTIVE

The project consists of a subscription to a social gender issue equivalent in Colombian pesos of up to US$100 million, to be issued by a Colombian entity through an offer on Colombia’s second market. The issue will have a term of up to seven years, with a balloon payment of the principle upon maturity. The proceeds from the issue will be used to grow the entity’s portfolio of loans aimed at projects promoting gender equality in the country, in line with UNDP Sustainable Development Goal 5 on gender equality. A methodological framework will be established setting eligibility criteria and impact indicators to enable the proper selection and monitoring of projects to receive financing.

IDB Invest will provide technical assistance to obtain a second opinion confirming the suitability of the methodological framework used. IDB Invest will also help the client build a gender-based commercial strategy.

With the subscription to and structuring of Gender Social Bonds, IDB Invest seeks to help close the gaps that women face in the labor market and in securing leadership positions, as well as help provide them greater and better access to the financial system. Additionally, it aims to give the issuers incentives to become national leaders on gender issues and support the implementation of business strategies with a gender component that promote the social and economic empowerment of women.

Environmental
and
Social
Review

  1. Scope of Environmental and Social Review. The environmental and social review of the proposed transaction was carried out by reviewing the client information and portfolio on file and conducting phone calls with the team responsible for environmental and social issues. IDB Invest reviewed internal information associated with the issuer’s environmental and social management system (ESMS), procedures, and environmental policy with the aim of evaluating its internal capacity to manage the environmental and social risks of the projects to be financed with the social gender bond. The proceeds will be allocated in two categories: SMEs led by women and mortgages granted to women for social-interest housing. Environmental and Social Categorization and Rationale. The proposed transaction is classified IF-3 based on IDB Invest’s Sustainability Policy. The majority of the subprojects to be financed are expected to present low environmental and social risks. The main sectors in which these enterprises operate are social interest housing construction, provision of services, commerce, and industry at the national level (Colombia). Subprojects classified as Category A[1] under IDB Invest’s classification system will be restricted from receiving financing.
  2. Environmental and Social Risks and Impacts. The environmental and social risks of the subprojects financed through the social gender bond are mainly associated with subprojects related to social interest housing mortgages[2] and women-led SMEs. The main environmental and social risks of social-interest housing construction are associated with location of the homes. Some potential risks associated with homebuilding could include: polluted sites, susceptibility to natural disasters, failure to follow construction codes, use of hazardous materials during construction, etc. The subprojects to be financed with the social gender bond are framed within the entity’s overall environmental context—that is, risk management, ecoefficiency, and implementation of environmental products and programs all take place at the corporate level. The issuer has an environmental and social risk management system (ESRMS) in place that includes specific procedures for the housing portfolio to evaluate compliance with national legislation, licenses, and permits, as well as compliance with the Exclusion List. The monitoring and supervision process includes procedures requiring the submission of annual environmental management reports on the environmental and social aspects of the projects. The issuer also has the internal capacity to identify and manage the environmental and social risks associated with its current portfolio. The subprojects will be aligned with the entity’s policies and with the legal requirements in Colombia.
  3. Mitigation measures. The issuer must guarantee that all subprojects financed through the social gender bond comply with the provisions of IDB Invest’s Exclusion List, as well as national laws applicable to environmental and social matters.  
  4. Environmental and Social Action Plan. N/A
  5. Contact information. For questions about projects, including environmental and social issues associated with an IDB Invest transaction, please contact the client (see Investment Summary) or IDB Invest through e-mail requestinformation@idbinvest.org. As a last resort, affected communities have access to IDB Invest’s Independent Consultation and Investigation Mechanism through mecanismo@iadb.org or MICI@iadb.org, or by calling +1(202) 623-3952.
 

[1] Category A projects are projects that could have environmental and social impacts that are potentially significant and varied, irreversible, or without precedent and that often extend beyond the physical boundaries of the project’s physical site or facilities. In principle, Category A includes projects that significantly impact protected or sensitive areas and/or vulnerable populations.

[2] Homes with a commercial value of up to 150 current statutory monthly minimum wages (approximately COP$131 million). The incomes of people who can access these homes are around four monthly minimum wages (approximately COP$3.5 million).

For inquiries, comments and requests about the project

For inquiries, comments and requests about the project

Information Request