FP006

Energy efficiency green bonds in Latin America and the Caribbean

Energy efficiency green bonds in Latin America and the Caribbean

  • Status Lapsed
  • Date approved 05 Nov 2015

Addressing demand-side energy efficiency in Latin America and the Caribbean through green bonds, by using the concept of aggregation to mobilize institutional funds at scale toward small and medium sized energy service companies.

The Programme addresses demand-side energy efficiency (EE), an area identified by the Intergovernmental Panel on Climate Change as comprising the greatest component of climate finance shortfall for mitigation. EE is one of the most competitive and cost efficient ways of responding to increasing energy demand, while reducing greenhouse gas emissions, lowering production costs and improving productivity. Lack of adequate financing is however a major barrier to private sector initiatives in energy efficiency.

In each targeted country, the Programme uses a two-phased approach to bridge that gap. It will, at first, fund energy efficiency projects using loans. Once a sufficient amount of projects are aggregated, the Programme will “bundle” them such that they will be used to underpin the issuance of partly guaranteed green bonds. In its initial phase, the Programme targets four Latin America and Caribbean countries – Colombia, the Dominican Republic, Jamaica and Mexico (as pilot country) – of which two are Small Island Developing States.

During the eleventh Board Meeting, the Board approved the amount of USD 20 million of Partial Credit Guarantees for the (pilot) Phase I in Mexico and USD 2 million as a programme development grant to facilitate the replication of the financing structure for Phase I into other capital markets in Latin America and the Caribbean under Phase II of the Progamme. The Board also allocated USD 195 million for Phase II of the Programme to be committed, subject to funding approval by the Board, in several tranches over the course of the next five years.

The Programme targets minimum emission reduction of 13.2 million tCO2e (2.5 million tCO2e in Phase I) and 780 million dollars (150 million dollars in Phase I) of private sector bond issuances with potential for further upscaling and replication in other developing countries.

The project page will capture Phase I information only, pending the approval by the Board of the next phase of the Programme.

The project has an estimated lifespan of 6 years.

Total project value

 

Tonnes of emissions avoided

 

Theme

Mitigation

Result areas

Project timeline

Pipeline

14 Jul 2015 - 115 days

Funding proposal received

14 Jul 2015

Cleared by iTAP

15 Oct 2015

Approved

05 Nov 2015 - 1,057 days

Approved by GCF Board

05 Nov 2015

Legal opinion on AE's Internal Approval

27 Jul 2018

Lapsed

26 Sep 2018

One region

  • Latin America and the Caribbean

One country

USD  
  • Financing
    • Private sector
    • Public sector
  • Size
    • Micro
    • Small
    • Medium
    • Large

GCF financing

InstrumentAmount
GuaranteeUSD 20,000,000
GrantUSD 2,000,000

Cofinancing

CofinancerInstrumentAmount
Inter-American Development BankLoanUSD 50,000,000
Inter-American Development BankGuaranteeUSD 56,000,000
CTFGuaranteeUSD 19,000,000
Private sectorEquityUSD 37,500,000

GCF Project Team

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GCF Communications
Phone +82 32 458 7751
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GCF Independent Redress Mechanism (IRM)
Phone +82 32 458 6157
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GCF Independent Integrity Unity (IIU)
Phone +82 32 458 6155
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Accredited Entity

Inter-American Development Bank

Matias Bendersky
Chief, Resource Mobilization Unit (Please CC in all communications Mr. Daniel Hincapie, Operations Specialist)
1300 New York Avenue NW, Washington, D.C., United States
Phone +1 (202) 623-1723
mbendersky@iadb.org
danielhi@iadb.org
Amal-Lee Amin
Chief, Climate Change and Sustainability Division
1300 New York Avenue NW, Washington, D.C., United States
Phone + 1 (202) 623-1924
amalleea@iadb.org
gloriav@iadb.org

National Designated Authority

Mexico

Ministry of Finance and Public Credit (SHCP)

María Fernanda Lara
Director for Sustainable Financing
Av. Insurgentes Sur 1971, Torre III, Piso 3, Col. Guadalupe Inn, Delegación Alvaro Obregón,, Mexico City, Mexico
Phone +52 (55) 3688 00 Ext. 52608
fernanda_montero@hacienda.gob.mx