Green loans for climate-friendly technologies

    In Latin American countries like Paraguay, extreme weather events and climate change are already having direct impacts on productivity and economic performance. As a result, the demand for climate-friendly technologies and solutions for adapting to climate change is particularly high.

    The Paraguayan bank Sudameris offers financial services for small and medium-sized enterprises (SMEs), corporate clients, and private customers. In cooperation with DEG, it has launched a new product: green loans. These loans enable small and medium-sized enterprises to invest in renewable energy projects or in new technologies that help save energy and resources.

    DEG, together with French development bank Proparco and Dutch development bank FMO, provided Sudameris Bank with a long-term loan totaling USD 120 million in 2020 for this purpose. DEG arranged the financing and contributed USD 40 million of the total amount.

    Sudameris’ customers operate in agriculture, manufacturing, trade, and the service sector. In these industries, significant energy savings can be achieved through investments in modern, climate-friendly technologies, such as more efficient machinery, innovative irrigation systems, or by enabling boatmen to replace their vessels with modern barges.

    DEG advisory service: “Green Loan Quick Assessment”

    Awarding green loans is still a relatively new business line in Paraguay. DEG therefore worked closely with Sudameris during the development of the product. Additionally, the “Green Loan Quick Assessment” advisory service developed by DEG was implemented. This pilot project, carried out with Sudameris in 2020, helps banks assess the market potential of green loans and develop tailored lending criteria.

    Since then, this assessment has been further refined based on positive customer feedback to better meet client needs. The “Green Loan Quick Assessment” encourages banks like Sudameris to decisively align their activities with sustainable finance practices.

    With this financing and comprehensive advisory services, DEG is supporting a local universal bank in bringing a new financial product to market. Through “green loans,” Sudameris’ customers, particularly small and medium-sized enterprises, are empowered to make targeted investments in climate-friendly technologies.

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