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
  • ESS Category Intermediation 3

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
Total GCF Financing
USD 22,000,000

Co-financing

Co-financerInstrumentAmount
Inter-American Development BankLoanUSD 50,000,000
Inter-American Development BankGuaranteeUSD 56,000,000
CTFGuaranteeUSD 19,000,000
Private sectorEquityUSD 37,500,000
Total Co-Financing
USD 162,500,000

GCF Contacts

General media inquiries

GCF Communications
Phone +82 32 4458 6338 (KST)
Send e-mail

Request for information

GCF Information Disclosure
Request information about this project

Project complaints and grievances

GCF Independent Redress Mechanism (IRM)
Phone +82 32 458 6186 (KST)
File a complaint

Integrity issues

GCF Independent Integrity Unity (IIU)
Phone +82 32 458 6155 (KST)
Send e-mail

Accredited Entity

Inter-American Development Bank
Ms. Victoria Eugenia Florez Toro
Primary

Chief, Resource Mobilization Division
More contacts

National Designated Authority

Mexico
Ministry of Finance and Public Credit (SHCP), Unit for Public Credit
Ms. Laura Elisa Aguirre Téllez Primary
Director General, Unit for Public Credit and International Affairs, SHCP
Av. Insurgentes Sur 1971, Plaza Inn, Torre III, Piso 3, Col. Guadalupe Inn, Alcaldía Álvaro Obregón, Ciudad de México, Mexico
Phone + 52 (55) 36 88 18 73
laura_aguirre@hacienda.gob.mx

Documents