Finance in Motion and Santander Asset Management partner with KfW to accelerate green bonds in region.
Luxembourg, 10 November 2021 – Finance in Motion, a global impact asset manager, and Santander Asset Management, a member of the Banco Santander Group, have joined forces to advance green bonds in Latin America through a new impact fund, LAGreen. The fund was initiated by the German development bank KfW with strong support from the European Union and the German Federal Ministry for Economic Cooperation and Development (BMZ). LAGreen breaks ground as the first fund dedicated solely to building the market for green bonds in the region, with the ultimate goal to unleash financing for sustainable development.
Green bonds are a bond instrument where the proceeds are applied to finance green projects, such as measures to advance renewable energy, energy efficiency, sustainable land use, biodiversity conservation, clean transportation, climate change adaptation, circular economy, and more. The global market for green bonds has grown rapidly in recent years; yet demand for green bonds still outstrips supply and there is enormous potential for further advancement of this instrument. LAGreen intends not only to invest in green bonds in Latin America, but what is more, to support the development of this market by providing technical support to new issuers. Ultimately, the partners aim to boost environmental and social benefits in the region by better connecting international capital markets to green investments.
The fund was officially launched during the COP26 in Glasgow, at an event hosted by the German Pavilion, with the presence of speakers from the European Union, the Federal Ministry for Economic Cooperation and Development, and the Climate Bonds Initiative (CBI), as well as Finance in Motion and the fund itself.
The panelists welcomed the creation of LAGreen as an instrument to boost access to finance for projects that contribute to the fight against climate change.
Johannes Scholl, Chairman of the Board of Directors of LAGreen, commented: “Latin America will be at the forefront of the fight against climate change. The region hosts some of the largest forest areas and is among the richest regions in the planet in terms of biodiversity. Mobilizing investments to promote the transition towards sustainable economic models will be essential to protect this wealth and generate global environmental benefits.”
Elvira Lefting, Managing Director at Finance in Motion, said: “Green bonds are an important tool for investors to identify sustainable projects that can be supported with their investments. But especially in Latin America, the market is still quite new: Investors are keen to buy green bonds, yet their availability is limited, and many local issuers still face difficulties accessing this market. That’s where LAGreen comes in. We believe that last year has shown that if we can fight a pandemic, we can also fight climate change; and as industries pivot to meet the challenges of a changing environment, we want to help pave the way toward a green economy and channel investments toward a sustainable future.”
LAGreen is structured as a blended finance fund, aiming to leverage public contributions to mobilize financing from the private sector. The fund is now poised to begin investing in green bonds issued by Latin American entities, ranging from private companies, financial institutions, public entities, and any organization seeking better access to capital markets to finance sustainable projects.
Jose Mazoy, Global CIO of Santander Asset Management added “It is an honour to participate in this project where we can contribute with two very relevant traits of our DNA as investors: our commitment to sustainability and our long history of involvement with Latin America. This fund will open the doors of green financing to smaller players which will help the region catch up on climate change mitigation and adaptation”
LAGreen is the first green bond fund dedicated to Latin America. By investing in green bonds and supporting new issuers with technical assistance, LAGreen’s goal is to boost environmental and social benefits across the region and promote the transition to a green economy. In addition, the fund aims to promote high impact standards for green bonds, both in terms of the impact of supported projects, as well as green credentials, reporting, and impact assessment.
As an impact investment fund advised by Finance in Motion, LAGreen was established as an initiative of Germany’s KfW Development Bank, with seed capital provided by the European Union and the German Federal Ministry for Economic Cooperation and Development (BMZ). For more information visit https://lagreen.lu/ and follow us on LinkedIn.
Media Contact LAGreen
Merle Römer (Finance in Motion – Advisor to the fund)
Manager Marketing & Communications
Phone: +49 (0)69 271 035-171