Commerzbank and IDB Complete US$115m Brazil Renewable Energy Loan

Germany’s Commerzbank, Inter-American Development Bank (IDB) and São Paulo-based Banco Pine have closed a US$115m syndicated A/B loan to expand access to financing for environmentally sustainable projects in Brazil.

The Green Line Finance Partnership entails a US$75m A loan from the IDB and US$40m B loan from Commerzbank.

The banks commented that with the demand for energy for both domestic and industrial purposes expected to expand 60% by 2021, Brazil’s energy matrix will likely shift toward a higher concentration of renewable energies, most notably energy from sugar cane derivatives and other renewables such as wind energy, small hydroelectric plants and biomass.

The partnership aims to increase access to adequate financing for transactions, particularly in renewable energy sectors that promote environmentally sustainable initiatives and reduce the impact on climate change in Brazil.

“Throughout Latin America and the Caribbean, financial institutions [FIs] fulfil an essential role in lifting green growth projects off the ground by facilitating their access to financing options,” said Marcelo Paz, project lead for the IDB.

“The IDB looks for like-minded partners in banking that seek to combine financial profitability with environmental returns. Banco Pine and Commerzbank were the right fit in Brazil.”

This is the second green loan deal that Commerzbank has completed with the IDB. In May 2013, for the first time the two banks partnered to finance a green facility in Brazil, demonstrating commitment to sustainable banking practices in the region.

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