Corfo Announces Improvements to Green Credit Program for Sustainable Development in Chile

In a meeting with representatives of the local financial industry, Corfo announced a series of improvements to its Green Creditprogram that allows companies and enterprises to access financing to invest in Non-Conventional Renewable Energy (NCRE), Energy Efficiency and Circular Economy projectsin order to move towards increasingly sustainable productive development in Chile.

In this regard, the executive vice president of the development entity, José Miguel Benavente, I affirm that “Corfo, from its public role, wants to promote this type of national projects that, in addition to having economic value, also generate an important environmental impact and the well-being of society in general.. With the improvements we made to this instrument, what we want is to promote an anti-cyclical policy to reactivate investments in sustainable initiatives, which despite being viable, cannot access resources in the face of the complex situation in terms of financing at a global level.”

He added that This allows progress in equal opportunities to access financing.

Instrument Scopes

As detailed by the corporation, through Green CreditCorfo delivers resources to financial institutions – banks, cooperatives, among others – in the form of loansso that these, in turn, grant financing (credits) of up to US$20 million to companies whose sales do not exceed UF 600,000 annually and want to develop projects that contribute to mitigating the effects of climate change and positively impact the environment.

Among the improvements announced by Corfo highlighted the reduction in interest rates and greater flexibility for financial entities that want to operate with this instrument. The objective of the Corporation is attract new intermediaries to Green Credit and thus benefit more companies with sustainable projects throughout Chile.

In line with the above, the Investment and Financing Manager of Corfo, Francisco Meneses, He stated that “with the modifications we made, This instrument will be much more flexible for financial institutions and also, for local companies and enterprises, the final beneficiaries., by offering longer payment periods and, in addition, a significant reduction in interest rates that we hope will be passed on to them. Here, the goal is reactivate our economy together with this renewed Green Credit”.

At the moment, The financial intermediaries of the program are Banco Security, Banco BICE, Banco BTG Pactual, BK and Banagrowhich, since 2020, have supported seven projects for a total amount of US$24 million.

Ad details

LThe announcements point to a reduction in the interest rate charged by Corfo to the financial institutions that today places it very close to the rates that the US Federal Reserve (FED) currently has, between 6% and 4.4% in US$, or 4% and 2.6% in UF, for operations with a term of up to 15 years.

Furthermore, in tune with the actors in this industry, sand incorporated improvements to make the times more flexible and streamline the operation of the program for financial entitiessuch as, for example, by establishing that the conditions of the financing requested by them may be adjusted throughout their permanence (previously they were established for each project that they wanted to finance under the instrument), as well as the maximum possible amount that could be will be given to them for their operations with Green Credit (previously it was done only once at the end of each year).

Finally, they stated that Corfo also seeks a more efficient use of the resources provided by this instrument, creating an “advance payment modality” for those intermediaries with project portfolios.. In this way, entities will be able to send an estimate of operations that would qualify for the program to request financing that they will then provide to companies (previously they had to individually detail each credit operation).

More information about Green Credit here.