The Inter-American Investment Corporation (IIC), part of the Inter-American Development Bank (IADB), has given a Brazilian real loan equivalent to US$50mn to Banco Cooperativo Sicredi, to support low-carbon farming in the country.
The four-year A loan is the first variable-rate facility the IADB Group has extended in Brazilian reais. The longer tenor is not usually available in the local commercial market, and will be passed on to Banco Cooperativo Sicredi’s network of 100 co-operatives. The bank acts as an intermediary between financial markets, third-party financial institutions and the co-operatives.
As part of the deal, the IADB Group will also offer optional training for the bank’s staff in low-carbon agriculture practices and how to incentivise small rural farmers to adopt climate-friendly technologies through a “results-based financing mechanism”.
“Through [the facility], the IIC will support an institution strategically committed to financial inclusion in rural areas, increasing food security and benefiting the environment by promoting the use of low carbon technologies,” the IIC says in a statement.