The country of Ecuador is made up of four geographic regions: the coastal area along the Pacific Ocean, the Andes mountain range with its majestic peaks and volcanoes, the lush forest of the Amazon and the Galapagos Islands. In relation to its area, the nation has the highest level of biodiversity in the world. But nature and the environment are threatened by climate change and raw material exploitation. The most significant economic factor for the nation is associated with high environmental risks and is also a double-edged sword in the economic sense: the country’s high dependency on oil exports leads to huge drops in growth and problems with public finance due to decreasing raw materials prices.
The country was also hard-hit by the coronavirus pandemic. Of the approximately 17 million inhabitants, 450,000 caught the disease by mid 2021 and 20,000 of them had died. The numbers are probably much higher due to unreported cases. The level of social inequality remains as high as it was before the coronavirus pandemic. However, during the past 20 years, the country was able to reduce its poverty levels in the long term. As a result, Ecuador has since been classified as one of the countries in the World Bank’s category of “Upper Middle Income Countries” (UMIC). On behalf of the Federal Ministry for Economic Cooperation and Development (BMZ), KfW Development Bank is supporting Ecuador as it reconciles its economic development with the protection of its natural resources.
Ecuador contains around 5–10 % of the world’s biodiversity and is thus among the 20 most mega-diverse countries. Ecuador can primarily attribute this diversity to its four very different geographic macroregions. Over half of the country is covered in forests. These play a large role in the local and global climate, are home to countless animal and plant species, provide a livelihood for the rural population and indigenous peoples, and are the basis for the nation’s sustainable development. Even though around 20% of the country’s area is under conservation, the natural ecosystems and forests are threatened by illegal clearing, oil extraction and agricultural expansion.
The constitution adopted in 2008 laid the foundation for a national system of protected areas (Sistema Nacional de Áreas Protegidas – SNAP). KfW Development Bank supports the consolidation of the protected area system and management of terrestrial and marine conservation areas. It also finances compensation payments for forest owners who place their areas under conservation and commit to preserving the forest. These forest owners are usually indigenous and use the funds to advance development projects in their communities in areas such as health or education.
Despite the introduction of the national system of protected areas, the progressive loss of forest area and the associated loss of biodiversity continues to be a problem and a challenge when it comes to combating climate change. Ecuador has committed to improving protection of its forests within the context of international climate action. One core element of this is the government programme “Plan de Acción REDD+ ‘Bosques para el Buen Vivir’ 2016–2025”. This is where KfW gets involved supporting political reforms and implementation of strategies to protect the forest and promote sustainable development.
In addition to biodiversity and forest conservation, KfW also promotes a bio-based economy in Ecuador through lines of credit for local banks.
Overall, KfW Development Bank supports the core issue of environmental and resource protection in Ecuador on behalf of and with funds from the German Federal Government equalling EUR 235 million (ongoing projects, pipeline and planned projects).
In addition to protecting biodiversity, forest conservation and a sustainable national economy, KfW also supports sustainable urban development in Ecuador, particularly in the area of climate-friendly urban mobility. The target here is to reduce energy consumption and emissions of climate-damaging gases and pollutants in cities, with a view towards realising Ecuador’s climate targets, in particular. This is brought about by investments in modern transport concepts that increase the share of non-motorised transport (e.g. bicycle paths) or realise alternative forms of transport (e.g. expanding the public transport network to reduce individual forms of transport).
KfW is working together with the Ecuadorian state-owned development bank BDE here, which has excellent access to the reform-oriented regional bodies in its role as national financier of cities and communities. On behalf of and with funds from the German Federal Government, KfW Development Bank is supporting the core issue of “sustainable urban development” in Ecuador with around EUR 70 million (pipeline and planned projects).
KfW Office Quito
Director KfW Office: Eudoxia Tello
Whymper N28-39 y Orellana
Quito
Ecuador
Phone: +593 2 3815814