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The potential of the Green Bond markets in Latin America and the Caribbean

Hamburg
Germany
2 October 2020

The publication of this study is part of the EU-LAC Foundation's ongoing commitment to support the partnership agenda between Europe, Latin America and the Caribbean, with the participation and contributions of civil society and other social actors.

One of the priority areas of the bi-regional strategic partnership is to address climate change. The countries of both regions have been the driving force behind the Paris Agreement on Climate Change and have adopted the sustainable development objectives (SDAs).

The revised Chapter 2 of the EU-CELAC Action Plan (Brussels, 2018) indicates the need to "optimize and expand existing and future networks and programmes in Latin America and the Caribbean, taking advantage of opportunities offered by investment services, as appropriate". Furthermore, promote triangular cooperation to leverage contributions from other actors and resources, as well as innovative sources and mechanisms for additional funding".

In order to combat climate change, there is an urgent need to fund mitigation and adaptation activities at various levels. In recent years, green bonds have increasingly come to the fore as an instrument for financing green projects that contribute to addressing climate change. The success of the green bond market in raising capital for the implementation of the 2030 agenda is stimulating strong interest in a growing number of countries to develop national green bond frameworks that link international good practice with local priorities.

In this context, based on a study conducted by the European Commission in 2016 on the development and functioning of the green bond market in Europe, the EU-LAC Foundation launched a call in 2019 for a study on the potential of the green bond market in Latin America and the Caribbean, including comparative aspects with the European market. The consortium of researchers selected by the call was led by EAFIT University and included Hill Consulting and Get2C.

The study presented in this publication analyses the incentives and barriers to the expansion of the green bond market in Latin America and the Caribbean. To do so, it went deeper into 4 case studies to explore aspects related to the regulatory framework and governance structures, standards, accountability, policies and programmes, actors and sectors. The report also presents a set of recommendations.

This publication is very timely as the year 2020 marks the beginning of a decade of urgent action on climate and sustainability in which the role of the financial sector will be crucial.

The EU-LAC Foundation would like to thank Ernesto Jeger, Programme Coordinator for Sustainable Development and Economic Issues who coordinated this project from the Foundation.

Author(s): 
RESTREPO-OCHOA Diana Constanza
RESTREPO-CASTRO Luisa Fernanda
LOZADA Juan Manuel
AGUILERA Carlos Andrés
FRANCO Juan Felipe
PINELA Sara
COSTA Luis
Theme: 
Climate Change
Series: 
Bi-Regional Economic Perspectives