The District of Bogota signed a one trillion Colombian peso (about $253 million) social loan with BBVA, which is in turn secured by the Multilateral Investment Guarantee Agency, MIGA. This operation is the first that MIGA secures in local currency in Colombia and marks a milestone in the structured finance market for the country's public sector.
BBVA has granted a social loan to the District of Bogota. The operation is a milestone for the country's public sector structured finance market, both because it is the first local-currency transaction secured by MIGA and because it was issued to a sub-sovereign entity. MIGA has also provided guarantees to BBVA in two other COVID-19 response projects in Colombia and Panama.
The current financing is classified as social because the proceeds will be used to strengthen the infrastructure and equipment of the public health sector in the Colombian capital. The loan will support Bogota’s local administration's response to the pandemic by purchasing ambulances, COVID-19 personal protective equipment, and upgrading information systems that will strengthen the city's hospital infrastructure.
The loan will support Bogota’s local administration's response to the pandemic by purchasing ambulances, COVID-19 personal protective equipment, and upgrading information systems.
This operation is another example of BBVA's commitment to Latin America and its desire to contribute to its economic recovery. BBVA is a leader in financing public and multilateral institutions in the region, offering them pioneering structured solutions adapted to their specific needs and with a clear focus on sustainability.
Jose Ramón Vizmanos, Head of Global Client Coverage, said: “We are very pleased to partner with Distrito de Bogota in its efforts to fund emergency responses and improve healthcare sector resilience. This financing is aligned with BBVA’s strategic priority to accompany our clients in their transition toward a more sustainable future. BBVA's commitment to its public sector clients is stronger than ever. We look forward to cooperating with MIGA in pioneering innovative financing solutions to support Latin América.”
“As the world prepares to adapt to an endemic COVID-19, continuing to strengthen healthcare capacity to respond to the ongoing public health challenge is essential,” MIGA Executive Vice President Hiroshi Matano said. “Our guarantee is enabling the city of Bogota to fund emergency responses and improve healthcare sector resilience by securing international financing, while helping diversify the city’s funding sources.”
On behalf of the city of Bogota, José Roberto Acosta, District Director of Public Credit, explained that “for Bogota it is a milestone and a source of pride to be the first global sub-sovereign entity to receive the MIGA guarantee for post-pandemic support, as well as to benefit from the first guarantee in local currency and at a fixed rate, eliminating exchange and interest rate risks in this volatile health emergency environment. This demonstrates the city's financial and institutional soundness and opens the door for other cities around the world to venture into innovative and efficient financing alternatives in the international market. With this financing we strengthen the District Health System, improving the wellbeing of the inhabitants of Bogota.”
BBVA, a benchmark in sustainable financing
As a sign of its commitment to the fight against climate change, in 2018 BBVA approved its Pledge 2025, by which it committed to channel a total of €100 billion in green finance, sustainable infrastructure, social entrepreneurship and financial inclusion. Three years later, and after reaching €59 billion, the bank increased its target to €200 billion. By December 2021, it had already provided financing of around 86 billion euros.
In sustainable lending, BBVA has been a pioneer and key driver, today making it one of the most active institutions globally and, in particular, in Spain. Throughout 2021, the bank participated in 103 green and sustainable operations, of which it has led a total of 28 syndicated loans as Sustainable Coordinator and 22 bilateral operations at a global level for clients from various sectors, highlighting relevant operations in Spain, the United Kingdom, Germany, the United States, Mexico and Latin America.