IDB unveils plan to boost bio-business in Ecuador’s Amazon

Cartagena, Colombia, Sep 5 (EFE).- The Inter-American Development Bank (IDB) and the National Corporation of Popular and Solidarity Finance (CONAFIPS) introduced a plan on Tuesday to stimulate bio-business in the Ecuadorian Amazon, aiming to assist microenterprises, producer cooperatives, and medium-sized companies.

“We are about to start delivering tangible results: in Ecuador, one of the members(…) is designing a program that will support 2,000 bio-businesses,” said IDB President Ilan Goldfajn.

The Brazilian IDB chief announced the initiative at the forum “Preserving the Amazon: The Green Coalition of Development Banks” during the Finance in Common Summit (FiCS), the largest global gathering of development banks held in the Colombian port city of Cartagena.

This project has funding of $23.3 million from the IDB earmarked for CONAFIPS and awaits approval from the bank’s executive board.

A PIVOTAL REGION

Goldfajn stressed that the Amazon was both “rich” and a vital “ecological point” globally, warranting a commitment to conservation and support for its “diverse communities.”

As such, they are promoting the “Amazon Forever” project, “a holistic umbrella program for sustainable development.”

The initiative is aimed at combating deforestation; offering economic alternatives to the region’s inhabitants; bolstering control and security; recognizing that there are cities within the jungle concerned about infrastructure and connectivity; and focusing on agriculture.

Goldfajn noted that 70% of South America’s GDP relies on water from the Amazon basin, and the environmental degradation of this forest could impact over 40 million people.

ECUADORIAN AMAZON’S POTENTIAL

The Ecuadorian Amazon boasts a bio-business potential with an initially estimated financing demand of $124 million, largely centered on microenterprises within the popular and solidarity economy.

However, the lack of offerings from the local financial system poses a significant barrier to these entrepreneurs and the development of bio-businesses.

Hence, the IDB sees the plan presented with CONAFIPS as pivotal, incorporating a unique blend of the bank’s financial tools, such as a loan and non-reimbursable resources for investment and technical assistance.

The idea is for CONAFIPS to channel credit through the region’s credit and savings cooperatives.

The project will roll out via three components, one focusing on financing bio-businesses tailored to their risk profiles. Another will establish a Coverage Fund to help diminish the perceived high risk of bio-businesses, and the last will zero in on bolstering the institutional capacity of CONAFIPS and the savings and credit cooperatives.

GREEN COALITION

This project is part of the Green Coalition spearheaded by the IDB to implement critical sustainable development goals in the Amazon, collaborating with the development banks operating in the region.

In this regard, Goldfajn explained that this effort seeks regional integration, sustainable investments within a common framework, financial solutions, and resource mobilization by the banks. EFE

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