BBVA Colombia and IFC Unveil World’s First USD 70 Million Biodiversity Bond

Tags: Economy/Finance

On July 12, 2024, Banco Bilbao Vizcaya Argentaria (BBVA) Colombia and the International Finance Corporation (IFC) launched the world's first biodiversity bond, totaling USD 70 million.

An Overview of the News

• The first tranche of USD 15 million was issued by BBVA Colombia.

• BBVA Colombia is the issuing bank, while IFC is the structurer, investor, and advisor for the bond.

Purpose and Funding

• Projects Supported: The bond proceeds will finance projects in reforestation, forest regeneration, mangrove conservation, climate-smart agriculture, and wildlife habitat restoration.

• IFC’s Involvement: IFC will assist in setting eligibility criteria, reporting indicators for biodiversity projects, and enhancing technical capabilities.

Previous Efforts

• 2023 Financing: In 2023, BBVA Colombia allocated over 214.8 billion Colombian pesos to biodiversity-related areas, including land use, ecotourism, smart agriculture, and marine habitat conservation.

• Blue Bond: BBVA Colombia also issued a USD 50 million blue bond in 2023, with IFC as structurer and investor, to support freshwater and coastal ecosystem conservation.

Environmental and Social Impact

• Climate Change: Climate change impacts on biodiversity and communities may create up to 10 million refugees in Colombia by 2050.

• Colombia’s Biodiversity: Colombia is the most biodiverse country per square kilometer, hosting 14 percent of known plant species globally.

About International Finance Corporation (IFC)

• Established: 20 July 1956

• Affiliation: Member of the World Bank Group

• Purpose: Provides financing for private enterprise investment in developing countries

• Focus: Economic development and poverty reduction

• Headquarters: Washington, D.C., United States

• Managing Director: Makhtar Diop