Montreal (Quebec), 15 July 2024 – FinDev Canada, Canada’s bilateral Development Finance Institution, is investing up to $US 20 million in a blue bond issued by Banco Nacional de Costa Rica (BNCR). This transaction builds on FinDev Canada’s successful past collaboration with BNCR, through the corporation’s $US 30 million participation in an IDB Invest-led subordinated social bond in 2022.
Structured by IDB Invest, who also invested $US 25 million, the bond is co-subscribed by LAGreen fund ($US 5 million). This partnership demonstrates a shared commitment to climate and nature action, conservation of natural resources and biodiversity, and sustainable development.
“The world’s oceans play a crucial role in mitigating the severe effects of climate change and in driving economic progress. Conservation and protection of these vital ecosystems is critical in supporting climate action, and enabling the development of sustainable economic growth,” says Paulo Martelli, VP and Chief Investment Officer at FinDev Canada. “FinDev Canada’s participation in this blue bond will contribute resources to key sectors that often represent an essential source of food security, employment, and wealth generation.”
"We are honored to accompany BNCR with this pioneering blue bond which aims to bolster Costa Rica's financing availability for blue economy projects, strengthening its capital base and setting a precedent in Central America. This landmark initiative paves the way for sustainable investment opportunities and market growth in the blue economy sector," declares James Scriven, CEO of IDB Invest.
“At BNCR we’ve been pioneers in creating sustainable financial products that aim to care for and preserve natural resources. We’re thrilled to announce Costa Rica's first blue bond, an instrument that will help protect the oceans and preserve marine ecosystems, while promoting the blue economy. Last year, we launched the first debit card designed to protect aquifers and guarantee the conservation of the water consumed by people. Our sustainable DNA translates into economic, environmental, and social well-being. With this blue bond we mark a historical milestone that we hope will inspire other countries”, said Rosaysella Ulloa Villalobos, CEO of Banco Nacional de Costa Rica.
For oceans-dependent economic sectors, financing is considered risky, costly, and difficult to obtain, particularly within the micro, small, and medium enterprises (MSMEs) segment. With an estimated US$ 150 billion per year funding gap worldwide, there is an urgent need for exponentially higher investment in conserving and restoring the world’s oceans. Blue bonds can play an important role in closing this funding gap.
With 35% of the proceeds expected to contribute to the reduction of GHG emissions, and therefore qualifying as Climate Finance, Costa Rica’s first blue bond will direct essential resources towards water-related challenges and foster sustainable ocean-based opportunities for MSMEs and corporates across various sectors, including water treatment facilities, sustainable tourism, fisheries, aquaculture, sustainable agriculture, and waste management.
As a coastal country straddling both the Pacific Ocean and the Caribbean Sea, Costa Rica’s blue economy is key to the country’s economic development, environmental sustainability, and social welfare.
About FinDev Canada
FinDev Canada is Canada’s bilateral Development Finance Institution (DFI), supporting development through the private sector. We provide financing, investment, and blended finance solutions, as well as technical assistance and knowledge, to promote sustainable and inclusive growth in emerging markets and developing economies (EMDEs), in alignment with the Sustainable Development Goals (SDGs) and Paris Agreement commitments. FinDev Canada is a wholly owned subsidiary of Export Development Canada (EDC). Find out more about FinDev Canada at www.findevcanada.ca.
About IDB Invest
IDB Invest, a member of the Inter-American Development Bank Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social, and environmental development in the region. With a portfolio of $21 billion in assets under management and 394 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.
About Banco Nacional de Costa Rica
The Banco Nacional de Costa Rica celebrates its 110th anniversary in 2024 and is the leading entity in the Costa Rican financial system that provides quality banking solutions to more than 2.6 million clients in Costa Rica. With a strong commitment to environmental, social, and economic sustainability, it issued the first green bond, the first social bond, and now also the first blue bond in the Central American region to strengthen its sustainable loan portfolio and to help impoverished communities while enhancing financial services for women. Its leadership in renewable energy projects, sustainable finance, and technological innovation has been crucial to guarantee sustainable and equitable development in the Costa Rican economy on the path to economic recovery.
About LAGreen
LAGreen is the first green bond fund dedicated to Latin America. By investing in green bonds and supporting new issuers with technical assistance, LAGreen’s goal is to boost environmental and social benefits across the region and promote the transition to a green economy. In addition, the fund aims to promote high impact standards for green bonds, both in terms of the impact of supported projects, as well as green credentials, reporting, and impact assessment.
As an impact investment fund advised by Finance in Motion and Santander Asset Management, LAGreen was established as an initiative of Germany's KfW Development Bank, with seed capital provided by the European Union (EU) and the German Federal Ministry for Economic Cooperation and Development (BMZ).
Media Contact
FinDev Canada
Florence Reinson
Senior External Communications and Media Advisor