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World Bank private sector arm IFC and IDB are considering supporting Bancolombia (NYSE: CIB) with a 200bn-peso (US$100mn) risk-sharing facility to provide financing for energy efficiency projects, according to information posted on IFC's website.
Under this facility, IFC and IDB will cover the risk of 50% of that portfolio (25% each). The investment is expected to receive support from the Clean Technology Fund and will have a parallel advisory services component.
The project would allow Bancolombia to make financing available to businesses committed to higher environmental standards that need longer-term funding for their sustainability-related activities.
IFC said the facility would help Bancolombia fill a market gap by giving it the appropriate risk protection it requires to enter a new market and create a new business line in climate change finance. The project could also lead to adoption of higher environmental standards across the banking sector.
IFC's board will consider the investment proposal on May 20.
Bancolombia is the largest bank in Colombia.