Transitioning to green economic growth: KfW supports Colombia’s comprehensive policy reforms

• EUR 150 million for measures to combat and adapt to the impacts of climate change at central and regional level
• Accelerating the transition to clean energy and a sustainable transport sector
• Establishing a framework for green government bonds
• Reducing greenhouse gas emissions by more than 50% by 2030

On behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), today KfW signed a loan agreement for EUR 150 million to fund the first phase of the reform programme to promote sustainable and resilient development. The reform programme will support and accelerate the country’s transition to renewable energy sources, with a particular focus on the transport sector, power generation and access to electricity. To this end, there are plans to implement measures including rolling out low-emission vehicle technologies, installing charging points for electric vehicles, developing alternative fuels and awarding electricity supply contracts via renewable energy auctions nationwide.

In addition, action will be taken to create a circular economy that ensures the reuse of process water and environmentally friendly management of paper, cardboard, plastic, glass and metal packaging waste.

To help establish the framework for the green bonds, which will be issued by the Colombian government, support will specifically be provided to biodiversity projects, sustainable agriculture, deforestation monitoring and measures to guard against the impacts of extreme weather events, among others.

“We are assisting Colombia as it looks to steer its economic growth towards a greener economy while factoring in the challenges presented by climate change. Against the backdrop of the pandemic and the related economic and social crisis in Colombia, this promotional support is aimed at fostering socially inclusive, environmentally sustainable and more resilient economic growth linked to sustainable use of the country’s natural resources,” says Christiane Laibach, Member of the Executive Board at KfW Group.

The various components of these reforms will play a significant role in Colombia’s ability to achieve the Sustainable Development Goals outlined in the United Nations’ 2030 Agenda by 2030. In particular, the German Federal Government’s development cooperation support provided via KfW is targeted at delivering progress on Colombia’s ambitious climate targets (nationally determined contributions, NDCs), which envisage an exceptionally high 51% reduction in greenhouse gas emissions by 2030. This project will also complement the German Federal Government’s efforts to minimise the coronavirus pandemic’s adverse consequences for Colombia.

A second phase is scheduled for the first half of 2022. The project will be implemented in close partnership with Agence Française de Développement (AFD), the Inter-American Development Bank (IDB) and South Korea’s KEXIM Bank, with IDB also injecting funds from Sweden and the United Kingdom.

Information about KfW Development Bank can be found at:
www.kfw-entwicklungsbank.de/en