Colombia has established new green bonds with a total value of 67 million US dollars. These will be used by the Bank of Foreign Trade of Colombia to support projects that help reduce the negative impact of the country’s climate and work towards a greener energy future.
The Bank of Foreign Trade of Colombia (Bancoldex) has launched its first green bonds, valued at 200 billion pesos (equivalent to about 67 million dollars), according to the Inter-American Development Bank (IDB). Bancoldex is a financial institution with the objective of supporting the competitiveness and productivity of the country’s companies.
Working for a greener energy future
Along with the announcement of these new funds, the IDB explained its intended use: to reduce the negative impact of climate change. The country has recently started to support renewable energies, with Law 1715 from 2014 and Law 1819 from 2016. The first law, approved in 2014 and regulated in February 2016, includes, among other things, tariff and VAT exemptions for renewable energies. The second law establishes that the sale of electricity generated from wind resources, biomass or agricultural residues will be exempt from the payment of taxes for a term of fifteen years. While no further details were given on the intended use of the bonds, they will surely work in favor of these laws, and will benefit the renewable energy sectors.
Unexpectedly successful bonds
The idea seems to be a good one, as the auction for these bonds generated a lot of interest. According to the IDB, 510 billion pesos of projects could have been sold, more than 2.5 times more than what was available.
High hopes are found in the funds
Luis Fernando Castro, president of Bancoldex, was delighted with the new green bonds, which will have a validity of 5 years. “Green bonds are a fundamental product so that Bancóldex can advance in the financing of projects related to sustainable construction, cleaner production, energy efficiency and renewable energy, which are, among others, those needed to combat climate change,” he was quoted. The funds will be supported by the Climate Bond Initiative and resources from the Secretariat of State for Economic Affairs of Switzerland (SECO).