LAGreen invests in first blue bond issued by Colombian financial institution

  • The projects financed with the bond issued by BBVA Colombia will be mainly dedicated to improving clean-water infrastructure

Bogota and Luxembourg, November 07, 2023 – The LAGreen Fund, Latin America’s premier dedicated green bond fund, is set to make history with BBVA Colombia, as the bank becomes the first financial institution in the country to issue a blue bond, focused on investments in water treatment and sewage.

Investing in clean water infrastructure and enhancing resilience to the impact of climate change on water security is a growing problem worldwide. The consequences of climate change in this area already started being observed in different cities across the planet, with catastrophic consequences arising from volatile rain levels, resulting in both sudden floods, droughts, and clean-water scarcity. The massive volumes of funding required to finance such investments make it imperative to mobilize private sector capital to complement (and leverage) public sector spending.

“With this blue bond investment, we support investments in essential water infrastructure, and contribute to enhancing the respective communities’ resilience to climate change,” said Johannes Scholl, Chairperson of the LAGreen Board of Directors.

The focus of BBVA Colombia’s blue bond is to finance investments in access to clean water and sewage, thereby bolstering Colombia’s capacity to manage these vital resources sustainably. With its abundant, but unevenly distributed water resources, Colombia faces water scarcity challenges, especially in urban areas where water availability and quality is a major concern. The National Planning Department of Colombia guides investment and projects in water infrastructure and sanitation in municipalities through the National Policy for Integral Management of Water Resources. BBVA Colombia aims to align the proceeds of the blue bond to the priorities identified in this policy, seeking to engage with 51 municipalities to finance water infrastructure projects.

LAGreen participated in the bond with USD 17 million, along co-investors that included the International Finance Corporation (IFC) and envisages to mobilize a total volume issued of up to USD 150 million.

About LAGreen
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 and Santander Asset Management, LAGreen was established as an initiative of Germany’s KfW Development Bank, with seed capital provided by the European Union (EU) and the German Federal Ministry for Economic Cooperation and Development (BMZ).

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About Finance in Motion
Finance in Motion is a global impact asset manager focused exclusively on sustainable development in emerging markets and developing economies. The company structures, manages, and advises impact investment funds that bring together public and private investors to address climate change, strengthen biodiversity conservation, foster the sustainable use of natural resources, improve livelihoods, and promote economic opportunities.

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Media contact LAGreen and Finance in Motion
Anne Johnson
Marketing & Communications
Phone: +49 69 / 271 035-742
Fax: +49 69 / 271 035-110