The river that gives birth to the sea—that’s the meaning behind the Guarani word of Paraguay, a landlocked country in the middle of South America. The country was home to the indigenous Guarani hundreds of years before the Spanish colonizers arrived in the 1500s. The country gained its independence 3 centuries later after which Paraguay has experienced economic and political instability and authoritarian rule. However, it’s also undergone strong economic growth, with the agriculture (particularly soybean), cattle and more recently the forestry sector being key employers.
Established in 1958, Sudameris S.A.E.C.A. is the largest bank in Paraguay and serves the corporate, SME, and retail segments. Agribusiness is one of its core focuses, as agriculture represents 30% of the country’s GDP. It offers a wide range of financial products and services across these sectors, and takes a strong customer-centric approach. For example, during COVID-19, they continued supporting clients with financing for working capital and investments, despite funding becoming scarce across the markets.
Sudameris encapsulates the “more than a bank” approach when looking at their E&S policies and practises. As a large percentage of their portfolio is in the agroindustry and cattle sectors, there can be significant E&S risks and impact, for example through GHG emissions and pollution. To mitigate these risks while still supporting the livelihood of the local economy, Sudameris has fully integrated their E&S capacity into their strategy, with multiple team
members responsible for their environmental and social management. They are also a United Nations Environment Programme Finance Initiative signatory, and ensure all relevant staff undergo regular capacity building to strengthen their E&S awareness. By being a front-runner in supporting the development of a Paraguayan green taxonomy and climate risk assessment guidelines for the banking sector, Sudameris can lead by example and be a catalyst for positive change in the Paraguayan banking sector.
Sudameris has been an FMO customer since 2010, and has received financing through various facilities, including a syndicated facility in 2022, where FMO provided a USD 40 mln loan to Sudameris to on-lend to projects in line with FMO’s green lending criteria.
Paraguay is one of the largest soy and beef exporters globally. As the country continues to focus on the importance of expanding these sectors, Paraguay has undergone rapid deforestation, both legally and illegally, with nature areas converted to farmlands.
To counter this, Banco Sudameris partnered with 3 other Paraguayan banks to create a Roundtable for Sustainable Finance, an FMO-supported sector initiative which promotes E&S risk management in the Paraguayan banking sector. Today, 100% of banks in Paraguay are committed members to the guidelines. The Roundtable has also directly influenced the policies and regulations set by the Central Bank, and led to the creation of a Sustainable Finance Private-Public Partnership, an inter-institutional coordination group in Paraguay.
Over the years, Sudameris has been a true E&S frontrunner, and it has paid off: they went from a mid-size bank at #6 in Paraguay, to the #1 bank in the country. They were the first FMO client in Paraguay to allocate funding for green loans (e.g., through energy efficiency investments in diverse sectors, FSC certified forest plantations, etc.) Through these measures and their continuous commitment, Sudameris ensures sustainable, yet local prosperity for the country.
www: Sudameris