IFC Supports Colombia's First Social Bond Issuance by Private Sector Companies

IFC supports Colombia's first private sector social bond issuance, funding Brilla program for vulnerable populations. Image Credit : ifc

The International Finance Corporation (IFC), part of the World Bank Group, has agreed to issue social bonds worth COP$540 billion by three Colombian companies: Promigas, Surtigas, and Gases de Occidente. This represents the first social bond issuance by a private sector company in Colombia's capital markets.

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Funds to Support Brilla Program for Vulnerable Populations

The funds raised through these social bonds will be allocated to Brilla. The program finances thousands of Colombian households, primarily targeting vulnerable populations without access to formal credit services. Of the 817,479 active Brilla clients, 94% belong to low-income groups (strata 1, 2, and 3). Since its inception in 2007, the program has granted over COP$8.4 trillion in loans.

The Brilla program offers affordable financing for essential products and services, improving clients' quality of life through energy efficiency. The program aims to alleviate energy poverty, cut carbon emissions, and promote the region's economic growth and environmental sustainability.

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Promoting Financial Inclusion and Sustainable Development

Juan Manuel Rojas, President of Promigas said, "With the issuance of social bonds, we reaffirm our commitment to financial inclusion and sustainable development, offering the most vulnerable communities the possibility of financing products and services through a simple and accessible mechanism. We thank the IFC for the trust placed in our credit program for clients with little or no access to traditional banking financing."

Cheryl Edleson Hanway, IFC Director, expressed pride in supporting the issuance, emphasizing its potential impact on financial inclusion and sustainability. "This collaboration demonstrates the power of innovative financing mechanisms to address the needs of vulnerable populations and drive positive outcomes," Hanway said.

The Brilla program has proven successful, with a low level of overdue loans, reflecting the clients' strong repayment track record. The average loan size is COP$2.5 million, enabling clients to finance products that enhance energy use and support sustainability.