Sustainable investments

Renewables    Sep 9, 2019 11:30 AM

The world is looking for alternatives to reduce pollution levels and this situation has led several industries to invest in social, sustainable and environmentally friendly projects. These types of investments continue to grow and gain ground in the private sector.

According to Portafolio, financing of social and environmental projects is becoming increasingly visible to investors.

The Inter-American Development Bank (IDB) has worked on the creation of capital market products that combine supply and demand of resources for development initiatives in the region, such as green, social or sustainable bonds.

Gema Sacristan, Business Director of IDB Invest, commented that the world is experiencing a trend of investments with social and environmental sense.

“We have seen an international trend for sustainable and impact investment, which seeks social and environmental returns beyond financial returns,” commented Sacristán.

Colombia, together with Mexico and Brazil, has led the placement of green bonds (aimed at financing initiatives with a certified environmental impact) and now ventures into sustainable bonds.

Fox example, Findeter, issued CoP$400B in these titles to fund projects in the regions. Bancolombia made a sustainable bond issue for CoP$657B, and IDB acquired it, with a term of five years.

These resources will be allocated to 26 projects of sustainable construction, energy efficiency, cleaner production, basic infrastructure, social and housing of social interest, in eight departments of the country.

José Humberto Acosta, Financial Vice President of the Bancolombia Group, pointed out that everyone wins with these investment options.

“The customer wins with more competitive interest rates, the country wins because entities such as the IDB and IFC set their sights on Colombia, and we attract the attention of international investors who buy green bonds,” Acosta said.

Acosta commented that the bank has a flow of CoP$2T to finance these projects, and for the entity will continue to seek structured financing in the local and international market.

Bottom-Line: The Colombian government is looking to diversify the energy matrix, giving a special place to renewable energy projects. These financing options will be key to see more projects of this type in the country.

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