Gerdau’s SiderPerú received BBVA’s first letter of credit (LOC) for $10mn to import, transform, and dispose of scrap metal. The investment would facilitate the company in purchasing about 20,000-25,000mt of ferrous scrap domestically or from abroad, depending on grade at prevailing prices. A spokesperson for the company informed Davis Index that at the moment the company primarily imports its ferrous scrap supplies, but they are not excluding local purchases or development of new scrap programs near its Chimbote plant. The mill will determine its buying pattern based on melting needs, but the spokesperson assured that the company would optimize purchases to the full value of the LOC.
According to Raúl Ugarte, the chief financial officer of SiderPerú, its sustainable use of raw materials for melting in its electric arc furnace (EAF), ensures the continuous support by BBVA in its financing structure.
BBVA has established these letters of credit to fund environmentally friendly projects and make recommendations to corporate clients on their green financing strategies.
Paul Bedón, executive, Corporate & Investment Banking de BBVA Perú, noted to the media on Aug 10, that lower carbon emissions investments in the country were important and would be supported by the lending strategy of the bank. BBVA is pledging a sustainable funding objective of €200bn ($235bn) worldwide by 2025 and aims to achieve carbon emissions neutrality by 2050, not only within the context of its own company but also those of all its clients.