IDB Invest boosts food security in Paraguay

PARAGUAY / USA – IDB Invest announced a loan to Bancop for up to $20 million to finance small and medium producers in the agricultural and livestock sectors of Paraguay. This will help contribute to food security in the country and the region. The financial package includes $15 million financed by IDB Invest and approximately $5 million mobilized from institutional investors.

The project seeks to strengthen support for Bancop to expand access to financing for small and medium-sized agribusiness producers in Paraguay to promote food production. The project is expected to contribute significantly to food security in the country.

The agricultural sector in Paraguay is essential to the local economy, specialized in the production and export of soybeans, beef and byproducts. Overall, the industry comprises one-fifth of the GDP, with agriculture, meat, livestock, beverages and oils ranking the highest. Agricultural activity represented 11.3 percent of GDP in 2022.

In Paraguay more than 35 percent of the population lives and produces in rural areas. In these areas, production chains for exports and the family farming model coexist. In addition to producing for self-consumption, family farms supply the local markets. Paraguay is the largest exporter of organic sugar in the world, 8th in beef exports, 4th in soybean exports and 10th in wheat. Cooperatives in Bancop’s supply chain produce 90 percent of Paraguay’s milk, 32 percent of wheat, 23 percent of meat and 13 percent of soybeans.

In recent years, climate change and global inflation have increased the risk of food insecurity in the region. Those most affected are small and medium farmers who face liquidity constraints, as well as vulnerable populations.

IDB Invest also provided advisory services focused on climate action to strengthen alignment with the Paris Agreement and establish a sustainable strategy. Bancop will receive support to incorporate a system to identify and manage climate risks in loan portfolios of agricultural chains.

The project with Bancop is expected to contribute to the following United Nations Sustainable Development Goals (SDGs): Decent Work and Economic Growth (SDG 8), Reduced Inequalities (SDG 10) and Partnership for the Goals (SDG 17).