Symbiotics Investments and the International Finance Corporation “IFC” have been recognized by Environmental Finance’s Bond Awards 2023 in the category of “Teams and innovative thinking” for their work in the Latin American private sector blue bond market.
The award-winning transaction was a USD 79 million blue bond issued by Banco Internacional in Ecuador, which marked the first private sector blue bond in Latin America, as well as the first Ecuadorian Blue Bond listed on the Luxembourg Green Exchange. The bond was structured in line with the International Capital Market Association’s Green Bond Principles and the IFC’s Blue Finance Guidelines. IFC structured the Blue Bond and, in late 2022, subscribed USD 40 million, while Symbiotics Investments subscribed USD 25 million in the domestic Capital Market. The latter was repackaged into a bond listed on the Luxembourg Green Exchange by Symbiotics Investments.
The transaction demonstrates how relevant it is for green bonds to be accessible and affordable to medium-size banking and non-banking financial institutions in emerging and frontier countries. This fosters green finance inclusion in underdeveloped regions where growth is high. Banco Internacional, which issued the bond, is a top social and environmental performer and addresses the borrowing and technical needs of low-income entrepreneurs and farmers. The bond proceeds will be used for financing, amongst others, sustainable water and wastewater management as well as environmentally sustainable management of living natural resources and land use projects.
Blue finance is an emerging area in climate finance with increased interest from investors, financial institutions, and issuers globally. Specifically, blue bonds and blue loans are innovative financing instruments that raise and earmark funds for investments such as water and wastewater management, reducing ocean plastic pollution, marine ecosystem restoration, and others. This transaction creates a precedent on the use of proceeds, as it creates a blue finance taxonomy that can be replicated in Ecuador, and across the whole region.
Symbiotics Investments and IFC have a long-standing commitment to sustainability and innovation, and this award recognizes their efforts in developing the green, social and sustainability “GSS” bond market through their innovative thinking. Symbiotics Investments’ journey to issue sustainable bonds started with the creation of a dedicated Special Purpose Vehicle set-up in Luxembourg in 2011, namely the Micro, Small and Medium Enterprises SA and the development in 2019 of its own Sustainable Bond Framework. This vehicle has led to 50 sustainable bond issuances to date with a total value of more than USD 480 million, all listed on the Luxembourg Green Exchange.
Through this channel, a rising number of financial institutions benefit from a ready-made structure and visibility. The adoption of the International Capital Market Association Green, Social, and Sustainability Bond principles in emerging countries is a testimony of its global outreach, for which Symbiotics Investments has been a promoter.
The difficulty and cost for a mid-size private entity to issue green bond in Ecuador and furthermore have it repackaged and listed in a European exchange should not be underestimated, usually requiring the need for expensive investment bank services. However, IFC’s structuring of the Ecuadorian domestic bond using joinders for co-investments and Symbiotics Investments repackaging into the Luxembourg Green Exchange offered a tailor-made solution to allow the participation of additional investors with minimal additional costs or additional documentation requirements.
Symbiotics Investments and IFC have been recognized for their ground-breaking work in the Latin American private sector blue bond market. This transaction marks a significant achievement in the development of blue finance and demonstrates the importance of accessible and affordable green finance in underdeveloped regions, as well as the role of innovative thinking in growing the GSS bond market.
If you would like to know more about investing in sustainable bonds or Symbiotics other investment solutions, please contact us at investors@symbioticsgroup.com
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Symbiotics is the leading market access platform for impact investing, dedicated to private markets in emerging and frontier economies. The group offers investment, asset management and capacity building services. Since 2005, Symbiotics Investments has originated over 7,100 investments representing more than USD 8.5 billion for 561 companies in 94 countries. symbioticsgroup.com
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For more information, contact:
Samy Derradji, Corporate Communication Manager, Symbiotics
samy.derradji@symbioticsgroup.com
