The Inter-American Development Bank (IDB) has announced the issuance of the first blue bond for Latin America and the Caribbean — a $37 million fixed rate bond that will help fund projects to extend access to clean water in the region.
The announcement was made during the ongoing United Nations’ COP26 climate summit, where IDB President Mauricio Claver-Carone said such schemes promise to help Latin America and the Caribbean towards greater sustainability.
“Accelerating the blue economy will be a key driver in transitioning to an inclusive, low-carbon and resilient future,” Claver-Carone was reported as saying. “With this first blue bond, IDB Group is promoting a groundbreaking approach to financing climate action and attracting new investors to Latin America and the Caribbean.”
Blue bonds are similar to green bonds — a type of fixed-income instrument used to raise money for environmental projects — however with a focus on preserving, protecting, and restoring oceans and waterways.
A 10-year fixed rate bond with a blue rating for Latin America, the Caribbean and other countries will fund the creation of a new first blue bond. The bond is estimated to be worth 50 million Australian dollars. This bond has a nominal yield of US $36.9 Million. UN Sustainable Development Goal 6 — “ensure access to water and sanitation for all.”
UN Sustainable Development Goals (a set of 17 linked climate-related targets) were created in 2015 and are designed to encourage sustainability worldwide. They also aim at reducing global environmental degradation.
The first blue bond creates more business opportunities
The blue bonds, a new concept in the world of finance that is particularly appealing to countries on islands and those with long coastlines or waterways with the Seychelles are very attractive. issuing the world’s first sovereign blue bondIn October 2018.
The Caribbean has 25% of its population living on the coast. Blue bonds can be a great option for this region. Funds raised will go directly to environmental protection, and also create business opportunities that are sustainable in relation to freshwater or ocean conservation.
The issuance of this first blue bond represents the sixth bond issued under the IDB Invest’s Sustainable Debt Framework, which was established this year. These bonds have a total of US $1.6 Billion and comprise a sustainability benchmark, two social and two green bonds. The new blue bond is also included.
Innovation and sustainabilily in business are a growing area of concern in the region — as in the wider world — with the UN earlier this year staging a regional forum on public and proviate sector strategiesan economic recovery that is sustainable and inclusive in the wake of the COVID-19 Pandemic.
The UN also launched in February a Latin America circular economy alliance, with the goal of promoting more sustainable businesses in this region.
Sustainability is a growing area of interest for businesses and startups, with the world becoming increasingly aware of the pressing need to promote a more environmentally-friendly future.
The new blue bond for Latin America and the Caribbean is just the latest example of the growing support and funding being made available to businesses working to clean up the air and waterways, reduce carbon emissions, develop more environmentally-friendly technologies, and improve the lifestyles of populations.
Biz Latin Hub is a great resource for helping you do business in Latin America
Biz Latin Hub has 16 teams of specialists who can assist companies in Latin America and the Caribbean. We also have trusted partners to expand our reach into every part of the region.
A wide variety of services are offered by us, which includes back-office support. company formation, accounting & taxation, legal services, visa processing, and hiring & PEOWe provide tailored services packages that are combined to fit the specific needs of clients.
We have unrivalled regional coverage, allowing us to specialise in market entry across multiple jurisdictions. Our broad client portfolio also includes many clients who are committed to sustainable activities and will benefit from the funding provided by the blue bond.
Contact us todayFind out more about how we can help you do business in Latin America or the Caribbean.
You can also read more our team and expert authors