As climate change increasingly affects value chains, new financing strategies begin to emerge for developing sustainable investments. In the last decade, “green bonds” have established themselves as one of those options.
Precisely, this week, the Guatemalan company Corporación Multi Inversiones (CMI), which has sustainable energy operations in Costa Rica, achieved the largest green bond placement carried out by a renewable energy company in Central America and the Caribbean.
The interest was such that the offers made were between four and five times higher than the original issue. This represented a collection of $ 700 million, highlighted the executive director of the CMI Capital division, Enrique Crespo. Another relevant data was that 85.4% of investors are of American and European origin.
In Costa Rica
This company, with a presence in 15 countries, currently has three wind generation plants in Costa Rica. However, only two of them are working since the contract with the Costa Rican Electricity Institute (ICE) of the third, recently expired.
This is the Wind Power Plant SRL, located in Tilarán, as confirmed by the company. The firm added that they are doing everything possible to get it to operate. The plant, also known as PESA, represents a production of 20 megawatts.
For this reason, CMI currently has the capacity to generate 130 megawatts. The Orosí plant produces 50 megawatts, while the other 80 come from the Alisios plant, in Quebrada Grande de Liberia, Guanacaste. This energy company has also ventured into the food sector. In fact, this division is also present in the country.
Green bonds are a financial instrument whose revenues are used exclusively to finance sustainable projects. For example the construction of a new wind or solar plant explains the International Capital Markets Association (ICMA).
This organization developed the Green Bond Principles on which, recently, the European Union (EU) was based to develop a standard for this instrument. Precisely, in 2007, the European Investment Bank – the EU’s community financial body – issued the first of these in 2007. A year later, the World Bank did the same.
Since then, the tool has been adopted by both other governments and private companies, such as CMI. These must go through a process similar to regular bonds, so they also receive a rating from the risk rating agencies.
Commitment to sustainable investments
“The placement of green bonds implies the issuer’s commitment to make sustainable investments. In this sense, the action is aligned with the objectives of contributing to the reduction of Greenhouse Gas emissions and the decarbonization and diversification of the regional energy network in the countries where it operates. In this way, CMI Energía strengthens its investments in the region, under a solid vision of a sustainable future,” said Crespo.
Categories for Green Bonds
The four eligible categories covered under the green bonds are:
– Renewable Energy: Renewable Energy and Climate Action.
– Energy Efficiency: Renewable Energy and Climate Action.
– Green buildings: Innovation and infrastructure and Sustainable cities and communities.
– Clean Transportation: Sustainable Cities and Communities.
In the country, green bonds are beginning to make their way. As reported by the Forbes Central America portal, as of 2020, Costa Rica was the sixth largest underwriter of green bonds in Latin America.