On 24 July 2024, Banco Finandina BIC S.A., in collaboration with IDB Invest, issued Colombian Pesos green bonds totaling approximately USD 50 million. The transaction marks a pivotal step in financing projects with substantial environmental and social benefits in Colombia. Banco Finandina is the first Colombian bank to obtain certification as a B Company.
Structure and Purpose
The green bonds are listed on the Colombian Stock Exchange, Bolsa de Valores de Colombia (BVC). They are part of Banco Finandina’s broader strategy to enhance its green and social portfolio. The bond issuance is aimed at funding initiatives such as green mobility, including hybrid and electric vehicles, as well as supporting micro, medium, and small enterprises (MSMEs), particularly those led by women and operating in vulnerable regions of Colombia. This aligns with Banco Finandina’s commitment to sustainable development and social inclusion.
The financing will have a tenor of five years and will be amortized on its maturity day (bullet).
Financial Details
IDB Invest, a member of the Inter-American Development Bank Group, has taken a leading role in this initiative, providing 60% of the total funds or USD 30 million. The remaining 40% is sourced from other investors, demonstrating a strong public-private partnership in advancing sustainable finance. The bonds are issued under Banco Finandina’s Sustainable Debt Framework, which outlines the criteria and projects eligible for funding under this green initiative.
Impact and Advisory Support
The proceeds from these bonds are earmarked for projects that meet stringent sustainability criteria. In addition to financial support, IDB Invest offers advisory services to Banco Finandina. These services include guidance on decarbonization strategies and initiatives to enhance gender diversity and inclusion within the bank’s operations and projects.
This bond issuance not only helps to finance environmentally friendly projects but also contributes to the broader goals of poverty reduction and closing equality gaps in Colombia. The initiative reflects a growing trend in Latin America towards sustainable finance, with financial institutions increasingly seeking to support projects that offer both financial returns and positive social and environmental impacts.
Conclusion
Banco Finandina’s green bond issuance, supported by IDB Invest, is a notable example of how financial instruments can be leveraged to support sustainable development. The project underscores the importance of collaboration between multilateral development banks and private sector entities in driving forward the sustainable finance agenda. As these bonds facilitate the transition to a greener economy, they also set a precedent for future sustainable financial initiatives in the region.
Newswire:
Banco Finandina together with IDB Invest promotes sustainability in vulnerable areas of Colombia
