Share the page
In Latin America, LAAD finances green projects of SMEs in agriculture, with the support of Proparco
Published on
Proparco has granted a USD 25 million senior loan to the LAAD group (Latin American Agribusiness Development Corp. and its subsidiaries), 50% of which will be used to finance green projects of small and medium-sized agricultural and agribusiness companies throughout the continent.
In Latin America, LAAD finances green projects of SMEs in the agricultural sector, with the support of Proparco.
Founded in 1969, the LAAD Group is a private financial institution that specializes in financing small and medium-sized agribusinesses in Latin America and the Caribbean. Its aim is to support the economic, environmental and social development of these companies.
Proparco began its partnership with LAAD in October 2010 with the signature of a first line of credit of USD 15 million. In line with this commitment to support the expansion of LAAD’s activities in Latin America, a second line of credit of USD 20 million was granted in September 2015, followed by a third financing of USD 20 M signed in November 2018.
This new and fourth intervention in favor of the LAAD group, which today consists of a USD 25 million senior loan, further amplifies Proparco’s commitment to this long-term partnership. This financing should contribute to the economic development of the countries in the region and to the growth of the activity of SMEs in the region.
In line with the “Acting for the Planet” priority of Proparco’s 2023-2029 strategy (Acting Together for Greater Impact), 50% of this loan, i.e. a total of USD 12.5 million, is specifically dedicated to finance activities that contribute to Climate Smart Agriculture, and “green” projects that will support SMEs’ efforts to improve water efficiency, develop more sustainable agricultural practices and produce and use more renewable energy.
LAAD’s ESG efforts are reflected in the application of the IFC’s E&S Performance Standards, compliance with the E&S laws and regulations of the country in which the company operates, and compliance with its own list of exclusions.
Paulina González Pardo, Head of Financial Institutions and Inclusion for Latin America and Asia at Proparco, said: “LAAD has recognized expertise in the agricultural and agribusiness sectors and has an excellent reputation in the region. Its stated ambitions for a more sustainable agriculture, in compliance with environmental and social standards, are fully aligned with Proparco’s strategy. We are pleased and proud to strengthen our partnership with LAAD with a new loan of US$25 million, of which US$12.5 million will be dedicated to green projects.”
“Thanks to Proparco’s partnership with LAAD over the past 13 years, we have been able to expand our support to private agricultural small and medium projects in Latin America. This new facility will help us move forward in our sustainability and climate strategies. As part of this strategy, in 2021 LAAD established a Green Finance Framework - in accordance with the Green Loan and Green Bond Principles - and half of Proparco’s US$25 million funds will be used to specifically finance sustainable agriculture and climate smart projects”, says Gustavo Martínez, LAAD’s CEO.
This new financing granted by Proparco to LAAD group should help support the creation of decent jobs in rural areas, and contribute to the maintenance of jobs across the region: leading to better living conditions.
Through the expected development effects, the project should contribute to the following Sustainable Development Goals: SDG 1 (Eradicate Poverty), SDG 2 (Zero Hunger), SDG 8 (Decent Work and Economic Growth), SDG 10 (Reduced Inequality), SDG 12 (Responsible Consumption and Production) and SDG 13 (Action on Climate Change).