BBVA and Argos closed the first loan linked to a sustainability performance rating

  • The financing consists of a loan for 160 Billion COP pesos in which the interest rate will be linked to the company’s environmental, social, and corporate governance (ESG) performance.
     
  • The goal of this type of financing is to promote a greater commitment to sustainability management and compliance with socially and environmentally responsible practices that ensure the construction of a greener future.

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BBVA and Argos, a cement company of the Grupo Argos, signed a long-term financing agreement through a sustainable loan in an ESG Linked format for 160 billion pesos (equal to approximately 37 million euros) where the loan includes a pricing adjustment mechanism that links the interest rate to the company’s ESG performance.

 

This transaction is the first of its kind in Colombia and constitutes Grupo Argos’ debut in sustainable financing.

The loan granted by BBVA in Colombia to Cementos Argos includes an adjustment mechanism through which the interest rate will be linked to the company´s in ESG (Environmental, Social and Governance) general performance.

This is a definite advance in line with our sustainability strategy that fills us with joy, not only because it contributes to our debt profile and reassures our commitment to sustainability as a strategic pillar and source of competitive advantage, but it is also a benchmark of trust for our investors and other stakeholders”, said Juan Esteban Calle, Argos CEO. 

Mario Pardo, executive president of BBVA Colombia stated that “One of BBVA's objectives is to foster more sustainable development and, therefore, it is increasingly necessary for companies to balance their economic, environmental and social perspectives in everything they do. That is why, this sustainable loan, which was formalized with Argos under the ESG Linked criteria, constitutes a milestone in moving towards building a greener future in Colombia”.

 

Argos, a world benchmark in sustainability

Argos is a growing multinational that has consolidated its presence in 16 countries and territories with emerging and developed economies. For more than 80 years Argos has been building history and today it is the number one cement and concrete company in Colombia and one of the most relevant in the sector in the United States, the Caribbean and Central America.

The company has been repeatedly recognized for its sustainability practices: one of the most sustainable cement companies in the world according to the Dow Jones Global Sustainability Index, a silver medal in the S&P Global Sustainability Yearbook, the FTSE4Good recognition from FTSE Rusells, the Energy Star award in two of its plants, 10 Wildlife Habitat Conservation certifications and one of the 10 companies with the best reputation in Colombia and an Alas20 award.

 

BBVA, a benchmark in sustainable financing

Through its 2025 Commitment, BBVA plans to allocate 100 billion euros for sustainable financing. By the end of December 2020 BBVA had carried out operations for 50.154 million euros. The organization is one of the 30 founding banks of the United Nations Principles for Responsible Banking, which define the role of the sector in the global effort towards a low-carbon economy and, ultimately, a more sustainable world.

The organization is the first in the world to launch a green 'CoCo' security. It has also created a framework of transactional products aligned with the Sustainable Development Goals.

Furthermore, the bank is already a direct CO2 neutral company since 2020, which implies the definition of an internal carbon price. Recently, the Global Finance magazine, in the latest edition of its ¨Best Investment Bank Awards 2021”, recognized BBVA as the best investment bank in the world on sustainable financing.

In Colombia, BBVA has formalized sustainable oriented operations worth 713 billion pesos at the end of 2020.

 

 

About BBVA

BBVA is a customer-centric global financial services group founded in 1857. The Group has a strong leadership position in the Spanish market, is the largest financial institution in Mexico, it has leading franchises in South America and the Sunbelt Region of the United States. It is also the leading shareholder in Turkey’s Garanti BBVA. Its purpose is to bring the age of opportunities to everyone, based on our customers’ real needs: provide the best solutions, helping them make the best financial decisions, through an easy and convenient experience. The institution rests in solid values: Customer comes first, we think big and we are one team. Its responsible banking model aspires to achieve a more inclusive and sustainable society.