Climate Finance Advisory Services for SICREDI

The main objective of this assignment was to support SICREDI in their green/sustainable strategy to: (1) Prepare and identify main market opportunities to enable access to additional resources via thematic bonds or other climate finance products; and (2) implement control and tracking processes on green investments to measure impacts through qualitative and quantitative indicators as well as reassure investors regarding the transparency and monitoring required for pre and post-issuance of green bonds. The assignment took into consideration that SICREDI is already working very actively in the field of sustainability since it has already adopted an environmental and social governance (ESG) policy and sustainability policy built around the taxonomy of the Brazilian Federation of Banks (FEBRABAN).

Econoler provided the following advisory services:

• Developed and implemented a new Sustainable Business Strategy:  
• Made recommendations to align the SICREDI sustainability strategy with international green finance principles (Green Bond Principles [GBP] and Green Loan Principles [GLP]) and best practices recognized by international green investors such as international development banks, donor agencies, and climate investment funds while taking into account the relevant local regulatory framework.
• Defined green assets for SICREDI and developed a tool to identify green projects:
• Developed a green loan definition aligned with SICREDI’s business model, conducted an analysis of the SICREDI loan portfolio, and identified green investments (green assets) that have high positive environmental impacts, are prominent in the loan portfolio, are abundant in SICREDI’s target market sectors, and offer high scalability and replicability potential that can be the focus of green bond-funded credit products in the next two years.
• Recommended a Green Bond Framework for SICREDI, which provides the necessary details for SICREDI to be fully compliant with GBP for financing green investments.
• Developed a portfolio analysis tool to help SICREDI better screen potential green investment opportunities by streamlining its assessment process and lowering transaction costs. The tool is Excel-based and includes common technical green projects for each priority sector (lighting, solar photovoltaics, motors, variable speed drives, solar water heating, refrigeration and use of biomass) and a user manual.  
• Conducted capacity building for SICREDI executives and staff:
• Executive management: Half-day training to explain the benefits and business opportunities of green lending and ensure management buy-in as well as present the Final Sustainable Business Plan and the green portfolio analysis tool.
• Operational level staff: (1) Conducted a training needs assessment (TNA), (2) provided training on green finance (based on the results of the TNA); (3) presented the Final Sustainable Business Strategy and the Implementation Action Plan, as well as explained the implications for SICREDI staff in terms of lending; and (4) provided training on identifying green investment opportunities for SICREDI using the newly developed tool.