Sustainability in infrastructure: Not just the icing on the cake

May 30, 2014

Sustainability in infrastructure: Not just the icing on the cake

By Rebecca Conan

Hans Schulz
Vice president for the private sector and non-sovereign guaranteed operations

The IDB recently announced the winners of its inaugural Infrastructure 360° Awards that recognize sustainable infrastructure projects in Latin America.

Winners include the Los Cocos wind farm project in the Dominican Republic, the Aura Solar project in Mexico and Peru’s metro Lima line 1.

BNamericas spoke to Hans Schulz, IDB VP for the private sector and non-sovereign guaranteed operations, about the importance of sustainability in Latin American infrastructure projects and the role of both the public and private sector in promoting it.

BNamericas: Why is sustainability important in the infrastructure sector?

Schulz: As climate change and environmental issues become bigger and bigger we have been noticing that you really make a difference when you start designing infrastructure differently from the first moment onward. The key thing is to put sustainability on the map as something that is front and center to achieving the objectives of infrastructure. If infrastructure investments are not implemented with a more and more ambitious toolkit around sustainability, the region is moving in the wrong direction. It’s key to get these criteria incorporated into most major infrastructure projects and into the planning cycles of infrastructure generally, as we cannot aspire to grow infrastructure as fast as our middle class and our populations grow. You look at the infrastructure deficit that the region has not been able to fill for years. Sustainability is a great way to fill that gap because you maximize the use of resources, material and you will probably even be able to influence consumer behaviors as you move from individual transport to mass transport for example.

BNamericas: How interested in sustainability is the private sector?

Schulz: I think there is a mega wave happening now that started in the last 18-24 months and I expect that it will go on for a good while to come.

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Here is Where the Sun Shines

April 20, 2014

Here is Where the Sun Shines


The Atacama Desert is among the driest regions on earth, with minimal cloud cover and high levels of solar radiation, making it the ideal place for Chile to harvest solar energy.

To help the country tap into this potential, the IDB and the Canadian Climate Fund for the Private Sector in the Americas are providing long-term financing to build the country’s first large-scale solar power plants. Resources will be used to build two solar photovoltaic power plants with a combined output capacity of 26.5 megawatts peak.

The investment, approved in the first quarter of 2013, represents the biggest step to date to help Chile use solar power to diversify its energy matrix and meet rising demand, which is expected to grow as much as 7 percent annually by 2020. The investment will help Chile advance on its plans to more than double renewable energy generation capacity over the next decade. That´s critical for a country whose generating capacity is 75 percent dependent on imported fuels.

The power plants, which will be named Pozo Almonte and be built by Solarpack Corporación Tecnológica, will supply energy to two of Chile’s largest mining companies. Clean energy generated by the plants will prevent [...]

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Infrastructure 360 Awards

IDB Announces Winners of Inaugural Infrastructure 360º Awards

Mar 28, 2014

IDB Announces Winners of Inaugural Infrastructure 360º Awards

Winning projects in the Dominican Republic, Mexico and Peru exemplify leadership in climate and environment, social impact, governance and innovation

COSTA DO SAUÍPE, BRAZIL – Inter-American Development Bank President Luis Alberto Moreno announced the three winners of the inaugural Infrastructure 360º Awards. The Los Cocos Wind Farm project in the Dominican Republic was selected as the winner of the People and Leadership category, the Aura Solar Project in Mexico won in the Climate and Environment category, and the Metro Lima Line 1 in Peru was named the winner of the Infrastructure 360º Award as the project demonstrating the most comprehensive implementation of a sustainability strategy.

The IDB Private Sector Infrastructure Sustainability Awards, or the Infrastructure 360° Awards, seek to identify, assess and reward sustainable infrastructure investments made by the private sector and public-private partnerships in the IDB´s 26 borrowing member countries in Latin America and the Caribbean. The main objective of the awards, developed jointly by the IDB and the Harvard Zofnass Program for Sustainable Infrastructure, is to help identify and promote ways in which sustainability is integrated during the planning, design, construction and operation of infrastructure projects. Eligible projects must have been under construction or in operation for no more than two years prior to last year´s deadline for submission, and have a total investment of $30 million or more.

In bestowing the awards President Moreno observed, “A growing number of leading infrastructure firms have come to believe that the integration of strong sustainability practices is key to the successful implementation of their projects. These awards recognize those infrastructure leaders.” Renowned architect Sir Norman Foster congratulated the awardees in a recorded message and noted “Infrastructure is wide in its interpretation. It´s about public space, it´s about systems of power, of servicing, of connecting. A significant proportion of the world needs infrastructure to raise their quality of life.”

The awards initiative was launched in Panama in March 2013. More than 60 applications were received from 18 countries in the energy, transport, water supply, water treatment and solid waste/sanitation, and telecommunications sectors. Each project was submitted online through a self-evaluation tool developed by the Harvard Zofnass program. The IDB announced the 12 finalists in October 2013. Each finalist submitted additional documents and materials that were reviewed by the Harvard Zofnass team, which then prepared a detailed assessment of each project for review by the nine-member panel of international experts that chose the winners.

The ceremony took place as part of as part of the IDB Group´s 2014 Annual Meeting in Costa do Sauípe, Brazil.

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beyondBanking Awards honor sustainability in the financial sector

Mar 27, 2014

IDB announces the winners of the fourth annual beyondBanking Awards

Financial intermediaries from Latin America and the Caribbean are recognized for their sustainability work in region’s financial sector

COSTA DO SAUÍPE, Brazil – The Inter-American Development Bank (IDB) announced today the winners of the fourth annual beyondBanking awards that recognize the best projects and initiatives in the region contributing to the creation of a more sustainable financial sector. The awards will be given in a special ceremony at the Bank’s Annual Meeting taking place in in Costa do Sauípe, Bahia, Brazil. This year, financial intermediaries from Bolivia, Brazil, Colombia, Honduras, Mexico and Peru won the awards for their sustainable banking practices.

Created in 2010, the awards seek to identify, share and inspire good practices in Latin America and the Caribbean’s financial sector. The award categories reflect distinct types of sustainable development actions, from financial inclusion strategies to the application of new technologies, as well as sustainability reports and projects that reduce the effects of climate change, among others.

The winners by category were the following:

  • accessBanking Award: promotion of financial inclusion strategies

Agentes Atlántida – Banco Atlántida (Honduras)

  • clearBanking Award: strengthening corporate governance, transparency and the use of sustainability reports

Reporte de sostenibilidad Bancóldex – Bancóldex (Colombia)

  • connectBanking Award: dissemination of new information and communication technologies

Canales de Acceso BancoSol – Banco Solidario (Bolivia)

  • equalBanking Award: support for diversity and gender equality

Acciones de accesibilidad Bradesco – Bradesco (Brasil)

  • learnBanking Award: development of financial education as a tool for responsible financial decision-making

Educación financiera BCP – Banco de Crédito del Perú (Perú)

  • planetBanking Award: searching for answers to the effects of climate change

Programa Reduzca e Compense CO2 – Banco Santander (Brasil)

  • Socially responsible/Impact investment Award: the most socially responsible or impact investment

Fondo responsable B+Educa – BBVA Bancomer (México)

  • People’s choice Award: project with the most popular support

Educación financiera BCP – Banco de Crédito del Perú (Perú)

“We created this award to identify the best sustainability practices in the financial industry in Latin America and the Caribbean and contribute to disseminate successful initiatives that combine economic with social and environmental returns,” said Gema Sacristan, Chief of the Financial Markets Division of the IDB and in charge of the beyondBanking program. “Over the years both the number of applicants and the quality of the projects have increased, which makes us very proud. ”

The awardees were chosen from over a hundred proposals for the seven categories. A Committee of Experts selected the best twenty-one proposals, three per category. Finally, the winner was selected by the public through an online vote.

About beyondBanking

The beyondBanking program is the strategy of the Financial Markets Division of the Structured and Corporate Finance Department and promotes social, environmental and corporate governance practices among financial intermediaries in Latin America and the Caribbean. It was created in order to contribute to the Bank of the Future – a financial business model that combines financial profitability with social and environmental returns; values principles of transparency, responsibility and integrity; seeks to reach more people through more channels; and respects the environment and community in which it operates.

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CNN visits Reventazon project in Costa Rica

CNN’s Nick Parker travels to Costa Rica’s green dam

Feb 10, 2014

Costa Rica’s green dam

CNN’s Nick Parker looks at a hydroelectric dam project in Costa Rica with the goal of protecting natural habitats. Watch video

Central America’s largest renewable energy project, the Reventazón project is the first hydropower plant to establish an offset for river habitat in the region, and will also contribute to the Jaguar Corridor Initiative and long-term preservation of the largest living cat in the Americas.

This 305.5 megawatts plant is setting the standard in biodiversity.  The IDB is supporting the project with a $200 million loan for the design, construction, operation and maintenance of Reventazón. The plant will generate an average of 1,4 gigawatt-hour (GWh) of electricity per year. Once completed, it will represent approximately 10 percent of Costa Rica’s total installed electricity generation capacity.


Chile to expand hydroelectric generation, with IDB support

Dec 11, 2013

Chile to expand hydroelectric generation, with IDB support

A $195 million loan will contribute to the 531 MW Alto Maipo project

The Inter-American Development Bank (IDB) signed a $195 million loan agreement with Alto Maipo Spa, owned by AES Gener (60 percent) and Antofagasta Minerals (40 percent), as part of a financing package of more than $1.2 billion for the Alto Maipo Hydroelectric Project.

The project consists of the construction of two run-of-the-river hydroelectric facilities designed to provide base load electricity to the Chilean grid. Ninety percent of the project’s infrastructure, including the power houses and 67 km of tunnels, will be located underground.

The facilities to be built include the Alfalfal II and Las Lajas hydroelectric facilities, located approximately 50 km southeast of Santiago, and 17 km of new 110/220 kV transmission lines. Once operational, the project will contribute an annual average of 2,300 GWh to the Chilean grid.

Chile’s electricity matrix at the end of 2012 relied to a large extent (63 percent) on thermoelectric power, much of it in the form of imported fossil fuels. Alto Maipo will thus contribute to displacing approximately one million tons of carbon emissions per year. The country’s energy demand has been increasing by 5 percent per year since 1985.

“This project makes a major contribution to Chile’s energy strategy over the coming years,” indicated Jean-Marc Aboussouan, chief of the Infrastructure Division of the Bank’s Structured and Corporate Finance Department. “We have been able to structure a loan commensurate with the needs of a project of this size, and our involvement in identifying measures to mitigate environmental and social impacts has been significant.”

The project is cofinanced by the International Finance Corporation, the U.S. Overseas Private Investment Corporation and six commercial banks. The total project cost will be roughly $2 billion, 60 percent in the form of debt and the remaining 40 percent in equity.

The facilities are expected to come on line in 2018


IDB facilitates investments in shared value by Latin American and Caribbean companies

Oct 25, 2013

IDB facilitates investments in shared value by Latin American and Caribbean companies

Inter-American Development Bank and Nestlé co-host creating Shared Value Global Forum 2013 in Cartagena

The Inter-American Development Bank (IDB) has allocated $750,000 to support clients from its private-sector portfolio in implementing initiatives to create shared value.

A company creates shared value when it addresses economic and social problems in a community, not only making itself more competitive, but creating benefits for the surrounding community.

The IDB is the first multilateral financial institution to operationalize the concept of shared value through its new tool the shared value appraisal, and will select 10 clients to identify investment opportunities aimed at optimizing the allocation of their resources, increasing their competiveness and creating social value in communities. Each client engagement will receive an assessment designed to identify investment opportunities at the intersection of business and social challenges as well as a roadmap to prioritize and execute investments.

Work is already underway with Subsole in Chile, Caribe Hospitality in Jamaica and the Universidad de San Ignacio de Loyola in Peru.

With Subsole, an agricultural products firm, studies have aimed at enabling the company’s workforce to become more sustainable, through investments to improve working conditions of low-income, rural families during the harvest season. In the case of Caribe Hospitality, a tourism development company, the focus has been on identifying job opportunities for at-risk youth during the construction of hotels, and for including small and medium-sized companies in the supply chain. With the Universidad de San Ignacio de Loyola, alternatives are being offered to broaden the socioeconomic spectrum of matriculating students and to lower dropout rates.

The remaining seven beneficiaries are currently being evaluated, with plans for still others to receive blueprints for identifying social issues arising in connection with the products and services they offer, and expanding the reach of their value chains.

While many firms in Latin America and the Caribbean value investments that not only provide financial returns but also bring with them social and environmental benefits, they often lack the capacity, time and resources to identify shared value investments.

The IDB shared value appraisal was among the topics discussed in Cartagena, Colombia, at the Creating Shared Value Global Forum 2013.  The Forum’s focus was to explore various approaches where the private sector has successfully converted business challenges into opportunities for business growth and significant social impact.  The event was organized by Nestlé and the IDB.


First of its kind instrument helps overcome financial barriers for Brazilian businesses to adopt energy efficiency measures

October 20, 2013

First of its kind instrument helps overcome financial barriers for Brazilian businesses to adopt energy efficiency measures

The Inter-American Development Bank (IDB) and Global Environment Facility (GEF) announce the issuance of $1.6 million in guarantees under the joint Energy Efficiency Guarantee Mechanism (EEGM) to support companies financing energy efficiency projects in Brazil. The first guarantees were recently issued to APS Soluçoes, a Brazilian energy service company, to assist in securing commercial bank financing from Banco Indusval (BI&P) to implement three energy efficiency projects in a call center, logistics warehouse and large retail shopping mall.

“The EEGM is an innovative tool that is supporting Brazil’s energy efficiency industry develop and expand new business models for saving energy,” said Hans Schulz, Vice President for Private Sector & Non-Sovereign Guaranteed Operations, a.i.

The EEGM ( is a $25 million mechanism formed jointly by the IDB and the GEF that addresses funding needs in the currently underserved sector of energy efficiency in Brazilian commercial buildings. The EEGM is the first guarantee fund in the world that covers both performance risk of energy efficiency projects and credit risk of the borrowers.

“Providing incremental financing for risk reduction in developing countries is a high priority for GEF,” said Naoko Ishii, CEO and Chairperson of the GEF. “With the IDB as our partner, we are demonstrating innovative approaches that will attract Brazilian private sector investors to energy efficiency projects and accelerate reductions in greenhouse gas emissions.”

Energy efficiency is consistently cited as the best means to meet the ever growing energy needs of Latin American countries. Electricity consumption in Brazil has increased by as much as 9 percent annually in recent years. This growth in energy demand can be cut in half, without compromising economic growth, through the widespread adoption of more efficient existing technologies. Yet paradoxically, energy efficiency still faces many financial barriers for businesses.

Gilberto Barshad Faiwichow, Executive Vice President, BI&P in São Paulo, said, “We were able to use the EEGM guarantees to extend our tenor, lower our lending rate and finance projects that we otherwise would not have be able to finance.”

Under the EEGM, guarantees are available in Brazilian reais up to the equivalent of $800,000 and are fast-tracked to minimize transaction costs. The focus is on energy efficiency projects that have the potential to achieve high carbon-emission savings and high financial returns, but where financing is often unavailable due to perceived risks. All technologies are considered including advanced lighting and climate control systems, as well as self-supply solar power and co-generation.