Global Climate Partnership Fund signs green financing facility with Banco de la Producción in Nicaragua

The Global Climate Partnership Fund (GCPF) has signed an agreement with Nicaraguan Banco de la Producción (Banpro) for a USD 25m green financing facility with a tenor of seven years.

The loan will be used to finance renewable energy and energy-efficiency projects targeted at energy consumption and greenhouse gas emissions reductions.

Banpro, being the largest Bank in Nicaragua, is part of the Central American Banking Group called Grupo Promérica. Banpro will be the first bank providing specialized financing opportunities for green projects in Nicaragua. The main focus of green financing activities will be on the agricultural, food-processing and light manufacturing sectors, all of them significantly contributing to Nicaragua’s economy. For example, Banpro plans to finance energy efficient equipment for the entire value chain of coffee, peanut and cocoa production.

While Nicaragua’s energy sector is characterized by electricity shortages and a high dependence on oil and diesel for electricity production, the country has a carbon intensity of 482g CO2 per kWh produced electricity. In addition, Nicaragua’s high electricity prices allow for fast amortization profiles in energy-efficiency projects.
Luis Rivas, CEO of Banco de la Producción: Green financing is a growing niche market in the Nicaraguan economy that has a strong need for energy efficiency and renewable energy investments. We believe that our broad customer base will react very positively to this new product.

Monika Beck, Chairwoman of the Board of Directors of GCPF said: “We are proud that GCPF is cooperating with Banco de la Producción in Nicaragua. Together with Banco de la Produccion, the largest local financial institution, we believe to have a strong partner who is highly aligned with the goals to contribute to the economic, environmental and social development locally.”