Bogotá-based bank Davivienda has issued nearly $150 million USD (433 billion pesos) in green bonds that have been acquired entirely by the International Finance Corporation (IFC), a part of the World Bank Group. The bonds have a term of 10 years (with a rate of 2.13% above IBR).
According to Davivienda, this was the largest issuance of green bonds ever made by a private Latin American financial institution. The move aligns with the bank’s push to increase its project financing for sustainable initiatives that aim to mitigate the impact of climate change. “Everything is framed within our sustainability strategy,” said Efraín Forero, president of Davivienda.
Specifically, the company says it is looking to finance projects focused on renewable energy, green construction, reducing carbon dioxide emissions, energy efficiency, and water management. Davivienda believes such projects will help Colombia on its quest to reduce national emissions that contribute to climate change by 20% by 2030.
“Davivienda is taking a new step that will help develop the green bond market in Colombia and Latin America,” said Irene Arias, IFC’s director for Latin America and the Caribbean. “The company is committed to the fight against the factors that cause climate change, and with our acquisition of this issuance, IFC is demonstrating the importance of green bonds for financing sustainable projects.”
Overall, IFC says it has identified climate-focused financing opportunities in Latin America and the Caribbean that could total more than $1 trillion USD by 2040. More than $25 billion USD of these potential projects could come from renewable energy initiatives in Colombia alone, according to the organization.
Photo: Davivienda’s headquarters in Bogotá. (Credit: Jared Wade)