Banco de Comercio Exterior de Colombia S.A. comes to market with their first green bond. Banks lead the way in Colombia.
Bancóldex have issued their first green bond for 200 billion pesos (USD67m). The 5-year tenor will fund projects that help reduce the negative consequences of climate change and help Colombia meet its NDC targets.
This is the third green bond from Colombia and the first issuance to be available to local investors through the Colombian Stock Exchange (BVC).
Bancóldex’s ‘bono verde’ was structured with technical cooperation from the Inter-American Development Bank (IDB) with resources from the Secretariat of State for Economic Affairs of Switzerland (SECO) and supported by the Climate Bonds Initiative.
The second opinion was provided by Sustainalytics.
Who’s saying what?
Luis Fernando Castro, President of Bancóldex:
"Green bonds are a fundamental product so that Bancóldex can advance in the financing of projects related to sustainable construction, cleaner production, energy efficiency and renewable energy, among others, necessary to combat climate change".
Juan Ketterer, head of the IDB's Connectivity, Markets and Finance Division:
"We are adding efforts so that the countries of the region can raise private funds in key areas, while contributing to the development of their financial markets helping in the structuring of instruments in their own currencies”.
Liliana de Sá Kirchknopf, Head of SECO's private sector promotion division:
"The main barrier to the transition to a green economy is the high rates to finance projects. That's why we believe green bonds as an instrument can reduce costs and accelerate green investments in scale".
Sean Kidney, CEO of the Climate Bonds Initiative:
"We need more development banks to follow the examples of Bancóldex and the IDB and to promote green bonds as a capital raising tool to finance the NDCs and sustainable development.”
Colombia in perspective
As an avid Blog reader, you’ll recall Climate Bonds has been supporting local market development, working together with Colombia’s Finance Management Committee of SICLIMA (National System for Climate Change).
Collectively, E3 - Ecología, Economía y Ética, Metrix Finanzas in association with PwC-UK and the Climate Bonds Initiative, published a roadmap for a local green bonds market.
The Last Word
In December 2016, Bancolombia issued the first green bond from Colombia (USD115m) and in the process gaining recognition with a Green Bond Pioneer Award at the Climate Bonds 2017 Annual Conference.
Davivienda bank followed in April 2017 with the nations’ second green bond of COP433bn (USD149m).
Bancóldex’s issuance brings a total of 18 green bonds from LATAM with a total of almost USD7bn issued to date.
But more importantly, is the 5th issuance in LATAM from development banks alone; starting with Mexico’s NAFIN back in late 2015, then Costa Rica’s Nacional Bank in 2016, then NAFIN’s 2nd issuance and Brazil’s BNDES this May.
The positive role of development and domestic banks in getting markets moving should be acknowledged. And there’s a much bigger part yet to be played by the LATAM banking sector in helping countries activate the capital investment needed to meet NDCs and sustainable development goals.
In the meantime, congratulations to Bancóldex, SECO, the IDB & all the local organisations who’ve assisted in this project.
Well done!
Till next time,
Climate Bonds
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