Inclusive green finance is equipping Ecuador’s communities to cope with climate change

By Priscille de Coninck, Ecuador Country Director at Agence Française de Développement. 

Agence Française de Développement has been working in Ecuador for ten years – we were here in 2016 when an earthquake killed nearly 700 people and displaced 80,000. In recent years, natural disasters have become stronger and more frequent, and things will likely grow worse. In response, AFD is working to help vulnerable communities cope with the impact of climate shocks. One way we’re doing this is through Inclusive Green Finance. 

Inclusive Green Finance brings excluded and vulnerable communities into the financial system by giving them access to affordable financial products and services that help them adapt to, and mitigate, the impact of climate shocks and natural disasters.

AFD is working with CONAFIPS, a major cooperative bank active in the manufacturing and agricultural sectors, to expand Inclusive Green Finance across the country. We provided a loan of US$30 million, of which US$10 million is going towards climate change adaption and mitigation, US$10 million is going towards developing a sustainable bioeconomy, and the remaining US$10 million is directed at supporting women entrepreneurs. 

All of these activities are helping to make Ecuador’s communities more resilient, and to propel the country’s transition to a sustainable economy. 

In parallel, AFD is working with the Development Bank of Ecuador on green financing initiatives, providing resources to develop the country’s infrastructure, and funding reconstruction and adaptation efforts as the country prepares for future weather shocks.  

The first step to helping countries and communities deal with the impact of climate change is to understand their context. In Ecuador, natural disasters will become stronger and more frequent in the years ahead – Inclusive Green Finance will be vital to ensure that Ecuador’s communities are equipped to cope.  
 
AFD supports AFI’s work on Inclusive Green Finance globally. As part of this, AFI has developed an impact story showing how Ecuador’s Environmental and Social Risk Management guidelines are helping small businesses adapt to, and mitigate, climate impacts.