Pushing the frontiers of sustainable finance in Latin America
Pushing the frontiers of sustainable finance in Latin America
In a strategic move to mainstream sustainable agri-finance in Latin America and the Caribbean, the eco business Fund invested in the first-ever sustainable subordinated bond issued by a Colombian bank in the international market.
Project summary
In a strategic move to mainstream sustainable agri-finance in Latin America and the Caribbean, the eco business Fund invested in the first-ever sustainable subordinated bond issued by a Colombian bank in the international market. This USD 15 million participation in Banco de Bogotá’s USD 230 million sustainable subordinated bond marks the fund’s first bond investment, signalling a drive to push the frontiers of sustainable finance in the region. The bond was issued alongside key partners such as the Inter-American Development Bank, IDB Invest, International Finance Corporation, FinDev Canada, and the LAGreen Fund. Banco de Bogotá had also signed the Finance for Biodiversity Pledge, of which the eco business Fund is a signatory, demonstrating systemic impact beyond the scope of direct investments.
Purpose of the partnership
Latin America and the Caribbean are home to 60% of the world’s terrestrial life(1) and 22% of global forested areas (2), yet the region’s share in global social, sustainability, sustainability-linked, and transition (GSS+) bond markets is a mere 4%(3), highlighting a significant financing gap. The eco business Fund has been a key player in private debt lending for nearly a decade, focusing on agriculture, agri-processing, fisheries, aquaculture, forestry, and sustainable tourism. This partnership aims to bridge the gap between international markets and regional needs, channelling funding toward sustainable business practices and supporting climate change adaptation and biodiversity conservation.
1 United Nations Environment Programme (UNEP)
2 Food and Agriculture Organization (FAO): https://www.fao.org/3/a0773e/a0773e05.pdf
3 Climate Bond Initiative’s Latin America and the Caribbean – Sustainable Debt State of the Market 2022 report.
How we worked together
Banco de Bogotá’s expansive presence across 913 municipalities positions it as a key partner in driving sustainable change, especially within Colombia’s agricultural sector. The bank has already directed the entire proceeds of the bond toward sustainable investments in agriculture and related sectors, with a significant portion dedicated to sustainable, shade-grown coffee produced mostly by smallholder farmers. Expected environmental impacts include reduced agrochemical use, increased sustainable land management, biodiversity conservation, and carbon sequestration through certifications such as Rainforest Alliance, FSC, and Bonsucro-EU. The investment also seeks to improve water efficiency, promote sustainable consumption, and enhance resource efficiency and employment in sectors like sustainable fishing and flower production.
The bond, structured as a subordinated instrument aligned with Basel III requirements, illustrates how thematic bonds can yield additional benefits for issuers committed to supporting sustainable projects, helping them stand out among international investors and strengthen their capital base.
This partnership supports the UN Sustainable Development Goals by promoting sustainable agriculture, biodiversity conservation, climate change adaptation, and rural employment. Through strategic investments and joint initiatives, the eco business Fund and Banco de Bogotá are advancing environmental and social impact across Colombia and the wider region.
We are very pleased with the work carried out in collaboration with the eco.business Fund for the issuance of our first Sustainable Subordinated Bond. This achievement reflects our commitment to allocate resources to high-impact projects in mitigation and adaptation to climate change.
Isabel Cristina Martinez, VP Sustainability and Corporate Services at Banco de Bogotá