The purpose of green bonds is to provide financing for initiatives that promote environmentally sustainable growth. Governments, businesses and civil society must work together to recover from COVID-19. To transition to more sustainable development patterns, green bonds have become essential.
These models are designed to make better use of natural resources, reduce greenhouse gas emissions, and develop a regenerative economy with less inequality. The promotion of cutting-edge financial instruments, such as green bonds, is crucial to achieve this.
Why should they be considered strategic assets?
Europe has been the main issuer of green bonds, according to a report by the EU-LEAC foundation, issuing 40% of them until 2019. Latin America has only issued 2% of the global total to date.
Energy-related initiatives are mainly financed through green bonds in the area. While this sector is essential to achieving low-carbon and sustainable economies, green finance in LAC nations has neglected other equally important areas.
Some of these initiatives include green infrastructure, sustainable agriculture, and water and sewage systems. All of which have the potential to significantly increase demand for green bonds by aiding in climate change mitigation and adaptation.
To achieve net-zero emissions and build resilient economies, green bonds can also be useful in attracting resources from the private sector.
However, the World Economic Forum (WEF) argues that governments should support a fundamental change in the way we do business across a range of activities. From food production to infrastructure, as well as the battle against climate change.
All of these changes have the potential to create 395 million job and business opportunities worth $10.1 trillion by 2030, as well as help protect the environment.
Who would be the best green bond issuers?
One of the industries that shows a lot of promise in the production of green bonds is the financial sector. This is because they are already established participants in the debt markets, ensuring that only a few more procedures are required to support the issuance of such bonds.
Banking institutions can create green lines of credit by issuing green bonds, which can be used to finance smaller companies working on environmentally conscious projects.
Green bonds issued by CMI Energía
One of the organizations that participated in the sale of green bonds was CMI Energía, which sold bonds for up to $700 million at an interest rate of 6,250%. This is the largest emission that a renewable energy company has made in the Caribbean and Central America.
With an emphasis on the planning, design, execution, execution and commercialization of energy production projects from renewable resources in the Central American region, CMI Energía is a division of the company CMI Capital de Corporación Multi Inversiones (CMI).
President Juan Luis Bosch, who together with President Lisa Juan José Gutiérrez Mayorga has worked for more than 45 years to grow CMI in the region, is in charge of this business unit. The company has operations in more than 15 countries, where it aims to create value at the level of the economy, society and the environment.