BANCO ESTADO ECOVIVIENDA - ENERGY MBIL

The project consists of a loan to Chile's public bank Banco Estado to finance mortgages for the acquisition of new housing units with improved energy efficiency standards.

The program will offer mortgage loans with preferential conditions to finance access to residential units with higher energy efficiency (EE) levels. Final beneficiaries will exclusively be private individuals.

The operation will finance mortgages for the acquisition of new-built residential units with higher EnergyEfficiency (EE) standards than those required by the Ministry of Housing and Urban Planning.

The mortgages will be given out under Banco Estado's Ecovivienda program to provide concessional financing.

The program was first launched in 2016 with the support of a KfW loan for EUR 133m.

The operation addresses the issue of asymmetric information and split incentives.

The project will reduce this gap by investment in units with higher EE standards and will therefore generate social benefits by increasing comfort and reducing energy expenditure.

It addresses the constrained access to EE housing units for final beneficiaries (private individuals) which stems from the market failure of asymmetric information. It rests on strong strategic alignment with EU and EIB policy priorities as well as the country's national energy policies and climate strategies.

The EIB offers financial and non-financial benefits to the Financial Intermediary, including a longer maturity and flexibility in the terms and conditions. EIB's participation will help to diversify the counterpart's funding mix.

The operation is expected to bring positive environmental and social benefits. On one hand by reducing the energy consumption of residential buildings, the project will contribute to reduce greenhouse gas emissions and energy expenses and will increase living standards (thermal comfort) among the population. The EIB will require the intermediary institution to take all the requisite measures to ensure that the sub-projects receiving mortgage loans will comply with national legislation and the ElB's Environmental and Social Standards, as well as international treaties and conventions signed and ratified by or otherwise applicable and binding in the country.

The EIB will require Banco de Estado de Chile to take all requisite measures to ensure that all mortgage loans are in line with the EIB's Guide to Procurement.