CAF and BDP Work on Expansion of Sustainable Finance for Bolivian Productive Sector

With the purpose of completing the first issue of green and sustainable bonds, promoting greater financial inclusion and digitizing non-financial products in the country, CAF—development bank of Latin America—and Bolivia’s Productive Development Bank (BDP-SAM) started their joint work to prop up the sustainable finance pillar, which allows the Bolivian bank to fund and channel green funds for the benefit of national production.

In this context, both financial institutions recently signed a cooperation and non-reimbursable technical assistance agreement, for USD 150,000, aimed to build BDP’s capacities for the management and operation of a smart and sustainable banking that offers financial and non-financial services with a gender focus, resilient to climate change and based on low-carbon economies, that contribute to the development of Bolivia’s productive sector.

The agreement is part of CAF’s strategy to become the Green Bank of Latin America and the Caribbean, and its Green Program is focused on businesses with a positive environmental impact.

CAF’s representative in Bolivia Florentino Fernández noted that the agreement is also aligned with the attainment of the Sustainable Development Goals (SDGs) established by the United Nations, which seek to eradicate poverty, protect the planet and ensure prosperity for all.

“This is a technical cooperation agreement to provide comprehensive assistance to the BDP and initially work on a thematic funding pilot that allows the structuring of green and sustainable bonds in the securities markets, under new national regulations—for social and environmental bonds—and in line with the mandates of the Institutional Strategic Plan (PEI) of the Bolivian financial institution, of which we are also partners,” he explained.

Furthermore, the Chairperson of the BDP Board of Directors, Denise Paz, stated that the BDP has been working for four years on its Sustainable Finance Program, which has different pillars, including a Comprehensive Plan for the Amazon, with credit technology that preserves the environment, and that this agreement with CAF will help address economic, social and environmental challenges.

Another goal of the project, as a non-financial service, is the digitalization of the technical assistance provided by the BDP to its credit recipients, such as the development of a Productive Information and Intelligence System, which includes the Map of Economic and Productive Complexities and the Agro-climate System, useful tools for the productive sector, explained Fernandez.

Similarly, according to the BDP’s strategic framework, the agreement calls for the preparation of a financial inclusion plan, mainly gender-based, and for other vulnerable groups in society and the economy; as well as support for internal training at the bank, in order to improve its digitalization, with products focusing on women and environmental protection, added CAF’s chief executive in Bolivia.

The BDP seeks to channel green funds to public and private productive projects that aim to apply measures for a significant reduction in carbon dioxide (CO2) generation, respect the environment and are inclusive.

Fernández reiterated BDP’s great impact on the country, mainly due to its initiatives to structure sustainable bonds to finance projects that contribute to the development of the nation and its large, medium and small enterprises.

The BDP has a mixed role: It is the operational arm of the Plurinational State of Bolivia and particularly in the financial system. The Plurinational State of Bolivia holds 80% of the shares while CAF holds 20%.