Latin America Green Fintech Challenge: $350k for Climate Finance

Latin America is one of the most vulnerable regions to climate change. Hurricanes devastate the Caribbean. Droughts cripple agriculture in Central America. Deforestation destroys the Amazon. But the region also has massive potential for climate solutions—renewable energy, sustainable agriculture, ecosystem restoration.

The problem is financing. Small and medium enterprises (SMEs) that want to install solar panels, switch to organic farming, or protect forests cannot get loans. Banks see them as too risky. Traditional credit scoring doesn’t capture their climate impact.

The Latin America Green Fintech Challenge is designed to solve this. It is a $350,000 accelerator program (per startup) run by the Inter-American Development Bank (IDB) Lab to scale fintech startups that are bridging the climate finance gap.

This is not just about technology. It is about impact. The IDB wants to fund fintechs that can channel billions of dollars to climate-smart projects—and do it profitably.

Key Details at a Glance

What This Opportunity Offers

Non-Dilutive Grant The $350,000 is a grant, not equity investment. You keep 100% ownership of your company. You can use the funds for:

• Product development (building better climate risk models, integrating carbon accounting).
• Regulatory compliance (getting licensed in multiple countries).
• Market expansion (launching pilots with banks, cooperatives, or climate funds).
• Impact measurement (building dashboards to track emissions avoided, hectares protected, etc.).

Regulatory Sandboxes One of the biggest barriers to fintech in Latin America is regulation. Every country has different rules. The IDB has relationships with central banks and financial regulators across the region. They can get you into regulatory sandboxes—safe spaces to test your product without full licensing.

Climate Data Partnerships Climate risk modeling requires data—satellite imagery, weather patterns, deforestation rates. The IDB provides access to:

• Geospatial data (from NASA, ESA, and regional satellites).
• Emissions datasets (from national inventories and carbon registries).
• Climate projections (downscaled to the local level).

Investor Showcases The program culminates in a Demo Day at the Latin America Climate Finance Forum. You pitch to:

• Climate VCs (like Elemental Excelerator, Breakthrough Energy).
• Impact investors (like Acumen, responsAbility).
• Blended finance funds (that combine grants, loans, and equity).

Who Should Apply

This is for Fintech Startups with a climate angle.

Ideal Candidates:

• The Green Lending Platform: You use AI to assess the creditworthiness of small farmers who want to switch to organic farming. Traditional banks reject them, but your model shows they are low-risk.
• The Climate Risk Analytics Company: You provide insurance companies with hyperlocal climate risk scores. “This farm in Honduras has a 30% chance of drought in the next 5 years.”
• The Nature-Positive Investment App: You allow retail investors to invest in reforestation projects and earn carbon credits.

Eligibility Checklist:

• Headquarters: Must be based in a Latin American country (Mexico, Brazil, Colombia, Argentina, Chile, Peru, etc.).
• Product Stage: Must have an MVP (Minimum Viable Product) with paying customers or active pilots.
• Climate Thesis: Must have a clear theory of how your product reduces emissions, builds resilience, or protects nature.
• Financial Inclusion: Bonus points if you serve underserved communities (women, Indigenous peoples, rural populations).

Insider Tips for a Winning Application

I have tracked the IDB’s fintech investments. Here is how to stand out.

1. The “Climate Impact Methodology” Must Be Rigorous Don’t just say “We help the environment.” Quantify it. Use a recognized framework:

• GHG Protocol (for emissions accounting).
• IRIS+ Metrics (for impact measurement).
• TCFD (Task Force on Climate-related Financial Disclosures). For example: “For every $1 million in loans we facilitate, we avoid 500 tons of CO2 equivalent.”

2. The “Blended Finance” Strategy The IDB loves blended finance—combining grants, concessional loans, and commercial capital. If your business model includes blended finance, explain it. For example: “We use IDB grant capital to de-risk the first 20% of the loan portfolio, which allows commercial banks to lend to smallholder farmers.”

3. The “Multi-Country” Ambition Latin America is fragmented. If you can operate in multiple countries, you have a bigger market. Show that you understand the regulatory landscape. “We are licensed in Mexico. We are in the sandbox in Colombia. We plan to launch in Brazil in 2026.”

4. The “Gender Lens” Requirement Women are disproportionately affected by climate change, but they are also powerful agents of change. If your product serves women (e.g., “60% of our borrowers are women farmers”), you align with IDB priorities.

5. The “API-First” Architecture The IDB wants to fund platforms that can integrate with existing financial infrastructure. If you have an API that banks can plug into, you can scale faster. “Our climate risk API can be integrated into any loan origination system in 48 hours.”

Application Timeline

January-February 2025: Product Refinement

• Action: Make sure your MVP is solid. Fix bugs. Improve UX.
• Action: Gather traction data. How many customers? How much volume?

March 2025: Impact Documentation

• Action: Document your climate impact. Use the frameworks mentioned above.
• Action: Get testimonials from customers or pilot partners.

April 14, 2025: Submission

• Action: Submit via the IDB Lab online portal.

May 2025: Interviews

• Action: If shortlisted, you will pitch to the IDB team (via Zoom or in person).

June 2025: Cohort Announcement

• Action: The cohort is announced. The program starts.

Required Materials

• Company Profile: Registration, shareholder structure.
• Product Demo: Video or live link.
• Climate Impact Methodology: How you measure emissions avoided, resilience built, etc.
• Financial Statements: Last 12 months.
• Partnership Letters: From banks, cooperatives, or climate funds you are working with.

What Makes an Application Stand Out

The “Theory of Change” The IDB wants to see a clear logic chain:

1. Input: Your fintech platform.
2. Output: Green loans disbursed, climate risk assessments provided, etc.
3. Outcome: Emissions reduced, livelihoods improved, ecosystems protected.
4. Impact: Contribution to Paris Agreement goals, SDGs, etc.

The “Scalability” Story Show that you can go from serving 1,000 customers to 100,000. What are the bottlenecks? How will you overcome them? “We are currently limited by our underwriting capacity. With this grant, we will automate underwriting using AI, allowing us to 10x our loan volume.”

The “Exit Strategy” The IDB is not a VC, but they care about sustainability. How will you become financially self-sufficient? “By Year 3, we will be profitable from interest income and data licensing fees.”

Common Mistakes to Avoid

Vague Climate Claims “We help the planet” is not enough. Be specific. “We finance solar installations that avoid 10,000 tons of CO2 per year.”

Ignoring Regulation If you are a lending platform, you need to be licensed (or in a sandbox). If you ignore this, the IDB will assume you are naive.

Weak Traction If you have 10 customers and $5,000 in revenue, you are too early. Come back when you have 100+ customers or $50,000+ in revenue.

Frequently Asked Questions

Can we apply if we are based in the US but serve Latin America? No. You must be headquartered in Latin America. However, you can have a US subsidiary.

Do we need to have raised funding before? No, but it helps. If you have raised a seed round, it shows validation.

Can we apply if we are pre-revenue? Yes, but you need strong pilot traction. If you have 1,000 active users but no revenue, explain your monetization plan.

What happens after the program? Many alumni raise Series A within 6-12 months. The IDB also provides follow-on funding for top performers.

How to Apply

1. Visit IDB Lab: Go to www.iadb.org.
2. Find the Challenge: Search for “Green Fintech Challenge.”
3. Submit: Upload all materials by April 14, 2025.

Climate change is the defining challenge of our generation. Finance is the key to solving it. This challenge is your chance to be part of the solution—and build a profitable business while doing it.