The economic crisis caused by the COVID-19 Pandemic and the fiscal situation of Costa Rica require green, resilient and inclusive solutions that consider both the well-being of people and nature. This much-needed balance is the only way to overcome the global challenges of the effects of the health emergency, the loss of biodiversity and climate crisis.
In November, the United Nations Development Program (UNDP) organized two cycles of virtual training aimed at strengthening national capacity in green bonds, a type of debt instrument that is issued in the national or international stock market to finance green projects.
The event was organized with the technical support of UNDP’s Biodiversity Finance Initiative (BIOFIN), which supports pre-feasibility analysis for the issuance of a green bond to finance investments in Protected Wild Areas (ASP), mobilize resources to boost green businesses and reduce the financing gap for nature. The training was delivered by a global team of experts from the Climate Bond Initiative (CBI).
Green, social, and sustainable bonds aligned with the Sustainable Development Goals (SDGs) – also called thematic values – are presented as an opportunity for the country to enhance its investment in the conservation and sustainable use of biodiversity, its energy development clean and its ambitious policy towards decarbonization, as well as its transition towards a resilient and inclusive green economy that allows it to better rebuild in the face of the socio-economic impacts of the Pandemic.
“We consider that Costa Rica already has a historical path and the possibility of accessing various financial mechanisms including the issuance of thematic bonds, which in the face of economic contraction and the transition to a resilient and inclusive green economy will allow it to better rebuild in the face of the impacts of the Pandemic.
It represents an opportunity for the country to boost its investment to generate jobs and green enterprises, and of course, the achievement of the Sustainable Development Goals set out in the 2030 Agenda”, highlighted José Vicente Troya Rodríguez, UNDP Resident Representative.
According to CBI data, 2019 closed with a record placement figure of $ 258 billion in global green bond issues. During 2020, sustainable, social and green bonds have behaved positively in international markets with placement and yield higher than the so-called vanilla bonds (or conventional bonds), a situation that in turn increases the “appetite” of investors for this type of issue .
This price differentiation factor can mean both reducing public debt, as well as opening the possibility of financing for the productive reconversion of industry and the promotion of sustainable agriculture, renewable energy, bio-businesses, biorefinery and other activities that in turn can also enhance a path of green economic reactivation.