Latin America & Caribbean: Green finance state of the market 2019 is the first detailed analysis of the LAC green finance market since the first issuer from the region entered the market in 2014. The report is sponsored by United Nations Development Programme (UNDP) through the Partnership for Action on Green Economy, and by the Inter-American Development Bank and IDB Invest.
The LAC green bond market has picked up strongly in 2019. As of 2 July 2019, issuance stood at USD3.7bn, driven by Chile’s two sovereign green bonds and has compensated for a weak 2018. A few more deals have closed since then, already making 2019 a record year with USD4.6bn and bringing total LAC issuance to date to USD13.6bn.
Brazil is the largest market for labelled green bonds, followed by Chile and Mexico. Energy allocations are high, but Land use and Industry represent a relatively high share compared to the global market. Over 80% is in hard currency, mainly USD.
The vast majority of volumes benefit from an external review: mostly SPOs but also Certified Climate Bonds, including the two Chilean sovereign green bonds.
Future issuance may come from companies already operating in sectors such as sustainable water management, renewable energy and public transport. We identified 30 climate-aligned issuers with USD12bn of outstanding bonds from Brazil, Chile, Colombia, Mexico and Argentina.
More issuance from sovereigns and financial corporates could boost the market, especially if combined with supportive policy and further stock exchange initiatives.
Sustainable agriculture and ocean-based (blue) activities also present opportunities for bond issuance in this region, as explored in two dedicated sections in more detail.
Download the full report here.