Brazilian finance minister Fernando Haddad said the government’s sustainable debt strategy received “the best possible” response from 60 US and European investment funds it consulted in recent meetings.
The Brazilian Treasury will determine the size and timing of the country’s first sovereign sustainable bond sale, Haddad reporters in New York on Monday.
The government carried out a non-deal roadshow, “so discussions did not involve an exact deal, there was no definition regarding a specific value,” he said.
The investor response to Brazil’s sovereign green bond is expected to be positive, according to Gustavo Arruda, BNP Paribas’ Latin America chief economist.
“My expectation is that there will be a strong demand,” he said during a conference call with journalists on Tuesday. “From the investor point of view, there is a good perspective. Brazil is not dependent on external debt. There is generally a good response when Brazil issues debt. And then there is the dimension of sustainability,” he said.
Earlier, government officials told LatinFinance Brazil will seek to raise $2 billion to fund sustainable projects under the Brazilian development bank BNDES’ Fundo Verde program.
Nevertheless, Haddad said the initial amount the government intends to raise is “very small” compared to the amount that it will eventually be able to raise to finance its energy transition.
“The country is in a position to raise a lot more funds abroad” as it looks to potentially double its production of clean energy in the coming years, the minister added.
Brazil’s finance ministry has previously said that its first green bond issue will help establish a benchmark for private placements of sustainability-linked notes.
Chile was the first Latin American country to issue a sovereign bond in 2019 and has since been followed by Colombia, Mexico, Peru and Uruguay.
MEXICO’S STRATEGY
Meanwhile, Mexican deputy Finance Minister Gabriel Yorio said on Monday the government aims to “mobilize” MXN15 billion ($876.2 million) of sustainable finance by 2030 to fund investment projects.
The government seeks to channel financing — whether from public or, private, national or international sources — “towards projects that generate a positive impact on the environment and society,” Yorio said at an event to present the Mexican government’s sustainable financing mobilization strategy.