The issuance of Green Bonds in Costa Rica for the local market will also attract foreign investors. Recently, Banco Popular y de Desarrollo Comunal became the first issuer to issue Green Bonds in Costa Rica. The public offer will be placed in its entirety in the local market. This, in addition to financing sustainable projects, seeks to attract foreign investors.
To support projects that address climate change, for more than 10 years some countries have issued these funding instruments. With them it is possible to finance and refinance projects, whether new or existing, that contribute to the mitigation of environmental problems.
In Costa Rica, the Banco Popular y de Desarrollo Comunal will place 50,000 million colones (80.7 million dollars) in Green Bonds for a term of 5 years. María Brenes, Director of Business and Corporate Relations of the National Stock Exchange, assured that Costa Rica has great potential, due to its environmental commitment that is recognized internationally.
Speaking of Costa Rica’s actions to mitigate climate change, he indicated that the country is one of the few nations to issue a National Decarbonization Plan. She recalled that the issuance of Green Bonds in Costa Rica began in 2018. At that time the National Bank issued 500 million dollars in these instruments. All the resources were placed in international markets. “The difference with the issuance of the Banco Popular y de Desarrollo Comunal bond is that 100% is being placed to be sold in the national market,” she said.
Investment in Green Bonds in Costa Rica
Brenes pointed out that since it is a novel instrument, work must still be done to promote it and train companies and investors. On the contrary, saying that at an international level Green Bonds are in high demand.
“When a country or a company goes out to be placed in international markets, it finds that over demand. This makes the placement rates much more favorable than the placement rates that they had achieved with a traditional issue ”, she mentioned.
For this reason, it was emphasized that Costa Rica, being the country a benchmark in environmental matters, seeks to channel resources from abroad. “The intention is also to attract the interest of those international investors who are looking for this type of instrument.”
It was explained that with the issuance of this first Green Bond in the local market, there is an opportunity to achieve the decarbonization goals. It is also intended to attract foreign capital. In this way, contributing to the development of sustainable projects and the generation of jobs.
Costa Rica, a benchmark for Central America
On the other hand, the director added that Panama has advanced in the issuance of Green Bonds. However, emphasizing that she seeks that the implementation of this instrument can encourage other countries in the region to join the initiative.
Finally, recalling that the Costa Rican Stock Exchange was the first in Central America to adhere to the Sustainable Stock Exchange initiative. For this reason, it was the first in the region to make a commitment to promote support for sustainable development from the capital market.
“We are very satisfied that it was a bank that took the first step in placing Green Bonds and giving local investors the opportunity to acquire them. From the Stock Market we hope it will be one of many Green Bond issues that will materialize in the market ”, she concluded.