US$1.8 Million Loan From IIC To Promote Inclusive Businesses In Paraguay
10/16/2008The IIC and MEDA PY join forces in an innovative biofuel project
Growing cassava in the San Pedro area in northwestern Paraguay
Washington D.C. - On October 16, 2008, the Inter-American Investment Corporation (IIC), a member of the IDB Group, approved a US$1,800,000 loan to ERPAR S.A.E. for building an agribusiness plant.
ERPAR is a Paraguayan company born of an initiative proposed by MEDA PY (Mennonite Economic Development Associates, in Paraguay), MEDA in North America, and a group of Paraguayan entrepreneurs. Its core business will be to produce ethanol from processed sugar cane and cassava in the department of San Pedro, one of Paraguay’s least economically developed areas.
The purpose of the project is to promote the economic development of some 1,000 small farmers by creating profitable, integrated, environmentally friendly businesses whose multiplier effect extends from improving small farmer’s living standards to increasing agricultural yields and fostering rootedness in rural areas.
According to Arnold Epp, executive director of MEDA PY, "Our undertaking needs credit that is not available in our market, so we turned to the Corporation in search of a solution. The accessibility and responsiveness of the Corporation’s staff enabled us to create a solution together, taking advantage of the IDB Group local financing tools and windows."
This innovative project has social and environmental components and is an excellent example of coordination and synergy among the complementary IDB Group private sector windows. ERPAR will be able to complete its financial plan with IDB funding under the Social Entrepreneurship Plan (SEP), which is nonreimbursable technical cooperation provided through the MIF to assist some 1,000 farmers that supply raw materials to ERPAR’s ethanol plant.
According to Hernando Lesme, IIC investment officer in charge of the operation, "The IIC is pleased to have put together financing that will have multiple positive environmental, social, and development impacts and improve the quality of life for small farmers in one of the poorest areas of Paraguay."
The Inter-American Investment Corporation is a multilateral financial institution that is a member of the Inter-American Development Bank (IDB) Group. It provides financing (in the form of equity investments, loans, guarantees, and other instruments) and advisory services to private enterprises in Latin America and the Caribbean. In 2007, the IIC reached US$1.2 billion in assets and approved 62 transactions channeling US$470 million to SMEs in the region. The IIC’s mission is to promote the economic development of its regional member countries by encouraging the establishment, expansion, and modernization of private enterprises, particularly those that are small and medium in size. For more information on the IIC’s activities, please visit www.iic.int.
Contact: Hernando Lesme (in Paraguay)
Telephone: + (595 21) 616-2321