CAF extends USD 100 million in financing to Chile's Banco Estado to boost SME growth and green projects

At its CLXXXV Board of Directors' Meeting, CAF, Development Bank of Latin America and the Caribbean, approved the extension of the revolving and uncommitted credit line to Banco Estado de Chile, increasing it from USD 200 million to USD 300 million. This operation will enable the only public bank in the Chilean financial system to accelerate the execution of its 2022-2026 Business Plan and respond more effectively to the growing demand for productive financing in the country.

Resources will be channeled to strategic sectors for Chile's sustainable and inclusive development. Micro, small, and medium-sized enterprises will be the main beneficiaries, with a special focus on women-owned or led enterprises. The operation also includes financing for foreign trade, working capital, the acquisition of capital goods, guarantees and sureties in favor of third parties that finance the Bank, as well as specific programs for energy efficiency, cogeneration, and green business projects. In addition, it will support the financing of mortgage loans for social and sustainable housing.

"This credit line extension reinforces our commitment to the productive and sustainable development of the region. Through our alliance with Banco Estado, we are facilitating access to long-term financing on competitive terms for thousands of Chilean companies, especially SMEs, which are the engine of employment and innovation. At the same time, we are driving the transition to a greener and more resilient economy, aligned with the Sustainable Development Goals," said Sergio Díaz-Granados, CAF's executive president.

The operation generates additionality by providing Banco Estado with access to long-term financing on competitive terms, diversifying its funding sources. The credit line contemplates terms of up to seven years for conventional operations and up to ten years for energy efficiency, cogeneration, green business and social mortgage loans, with a grace period of up to two years.

An important component of this expansion is the inclusion of operations with ESG-certified companies, which adds qualitative value to the portfolio and facilitates monitoring processes. In addition, CAF will complement this line of credit with resources from the LAC Green SME Initiative, financed by the Green Climate Fund, which provides access to competitive interest rates and technical assistance for capacity building in projects aimed at reducing greenhouse gas emissions.