BanEcuador Sets USD 253M El Nino Credit and Relief Buffer
BanEcuador is positioning a USD 253 million credit and relief buffer ahead of a possible El Nino event.
The public bank estimates that up to USD 13 million in credits could face repayment risk from flooding and productive losses.
The planning scenarios reference severe historical events including 1982-1983 and 1997-1998.
Exposure And Instruments
| Item | Detail |
|---|---|
| Available contingency buffer | USD 253M |
| Credits potentially at risk | up to USD 13M |
| Historical scenario references | 1982-1983 and 1997-1998 |
| Guayas flooded in 1982 event | up to 60% |
| Manabi/Los Rios/Santa Elena flooded | 35%-45% |
| 1997-1998 rain duration | nine months |
The measures listed by the bank include:
- Debt reprogramming
- Credit refinancing
- Novation of obligations
- New productive resources
- Agricultural insurance activation
The bank also said it is working with the United Nations Development Programme on green bonds for climate mitigation and adaptation projects.
Agricultural Risk
The bank identified short-cycle and agroindustrial crops as especially vulnerable to prolonged flooding and river overflows.
The named crops are rice, corn, sugarcane, African palm and bananas.
What to watch
- Whether El Nino impacts move from contingency planning into actual credit restructuring.
- Geographic concentration of affected borrowers if flooding materializes.
- Whether the green-bond work with UNDP advances into an issued instrument.
- Whether agricultural insurance claims reduce or merely delay credit stress.
Source
El Telegrafo — "BanEcuador activa plan frente a El Niño: dispone de USD 253 millones para créditos y alivios financieros"
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