The rise of green bonds

Financing for development in Latin America and the Caribbean

The 2030 Agenda and the Sustainable Development Goals present a unique opportunity to promote new instruments and innovative mechanisms for financing social and production development in Latin America and the Caribbean. “Green bonds” are an example of alternative financial instruments becoming increasingly available to investors. This report examines the growing green bond market, with emphasis on Latin America and the Caribbean. It shows that between 2014 and 2017 (as of August 31), the region issued US$ 8.4 billion in bonds with a green focus in local and international markets. The bulk of the region’s green-focused bonds – US$ 7.1 billion (84%) – were issued in international markets. On average, these bonds represented only 1.6% of the total Latin American and Caribbean bond issuance in international markets in the period. In the first half of 2017, however, they accounted for 3.7% of the region’s total international debt issuance. If this share continues on an upward trend, green bonds could play a more significant role in the mobilization of resources for the implementation of the 2030 Agenda in Latin American and the Caribbean. Bond financing is a tool available to only a set of countries, however. In the case of smaller economies with less developed domestic capital markets and limited access to international capital markets, the role of regional and multilateral banks is of vital importance in providing direct financing.

Fuente: CEPAL

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Economía Internacional Finanzas Macroeconomía