The Inter-American Development Bank (IADB) has agreed a US$100mn loan with Banco Itaú to finance environmentally friendly projects in Brazil, Chile, Colombia, Paraguay, Peru and Uruguay.

The loan will be used to finance projects related to renewable energy, energy efficiency, cleaner production in manufacturing and processing, as well as projects that can generate carbon credits.

Banco Itaú could also receive a syndicated B-loan of up to US$100mn, IADB says in a statement.

“There is a shortage of financing for green projects in Latin America and this is part of our efforts to bridge this gap,” says Daniela Carrera-Marquis, chief of the IADB’s financial markets division at the structured and corporate finance department.

Karina Azzinnari, IADB project team leader adds: “This project can show that banking in the region can go beyond traditional risk assessment models and include processes that allow investors to maximise their impact.”