Carlos Arias, director of Public Credit at the Colombian Finance Ministry, recently confirmed that by the end of September Colombia will become the first government in Latin America to sell green bonds in the local market. Chile had previously issued green debt but in foreign markets.

The first issuance will be for at least 500 billion Colombian pesos (approx. $132 million dollars) in securities maturing in 10 years. The so-called “green TES” will act as a “twin” of the national peso debt maturing in 2031 (Títulos de Tesorería “TES”), and will be subject to the same local regulations. Further auctions of green bonds could take place during October and November 2021.

By July 2021, Colombia had adopted the Green Bond Framework, following international best practices on environmental benefits, sustainable financing, transparency and accountability to investors.

The portfolio includes 27 investment projects for up to $2 trillion Colombian pesos to be financed by the green bonds, classified in six categories: water management, use and sanitation, clean transport, ecosystem services and biodiversity protection, non-conventional renewable energy sources, circular economy, and sustainable agricultural production adapted to climate change.

In addition, the draft General Budget of the Nation (PGN) for the year 2022 plans to allocate another $2 trillion Colombian pesos through green TES.