COVID-19 has resulted in negative socio-economic impacts in Latin America. In particular, SMEs are facing bankruptcy risks. Levels of unemployment and poverty have increased. This accentuates pre-existing levels of inequality and disparities. The availability of finance for addressing needed resilient and low carbon investments has been reduced, accentuating vulnerability to climate-related risks and related impacts.

The Program marks a continuation of a successful phase 1, which was also supported by SECO. Phase 2 has two following overall objectives:

1) Broadening the thematic scope and supporting new types of issuers: in addition to Green bonds supported in phase 1, the new Program will include other thematic bonds such as sustainable or social bonds. Further, while the focus will remain on national development banks, IDB will selectively also work with new public issuers. Overall, the objective is to leverage between USD 1 and 1.5 billion based on the support of 10 issuances.

2) Increasing the delivery of regional public goods relevant to the development of the thematic bond market by further supporting the Green Bond Transparency Platform (GBTP), an IDB initiative created in phase 1 with the objective of supporting the harmonization and standardization efforts on green bond reporting in Latin-America.

Deeper sustainable capital markets in Latin America

Enhanced transparency/harmonization in the thematic bond market

Enhanced ability of public issuers to tap into capital markets through the issuance of thematic bonds

Enhanced reach, coverage and use-case of the Green Bond Transparency Platform

Erwartete Resultate:  

Support for the structuring, review, verification, and marketing of thematic bonds issuances

Dissemination of sub-project results, lessons learned and best practices

Increased understanding on the benefits associated with thematic bond issuances

Resultate von früheren Phasen:  

The IDB supported the issuance of six thematic bonds (green, social and sustainable bonds), mobilizing more than USD 350 Million in capital market finance. The last issuance supported under the first program was COFIDE’s (National Development Bank of Peru) COVID-response bond, with the objective to use social bonds as an instrument to finance COVID-19 emergency and recovery needs. In addition, improving and better standardizing reporting practices, increasing transaction costs and hampering market development. For this, the program developed the concept of the Green Bond Transparency Platform (https://greenbondtransparency.com) which provides a basis for further development in phase 2.