facade of old building with flag of dominican republic

The Dominican Republic is getting closer to issuing its first sovereign green bond, Economy Minister Pável Isa Contreras told LatinFinance.

“There have been talks with the World Bank and with the European Union,” he said in an interview in Marrakech, Morrocco.

“We know that we have to run fast in order to be ready before conditions become more and more restrictive related to green requirements,” he said on the sidelines of the annual meeting of the International Monetary Fund/World Bank.

The minister acknowledged, however, that the global context it getting more complicated and may make it “more difficult” for the government to return to debt markets.

The Dominican Republic sold DOP71 billion ($1.25 billion) worth of 12-year peso-denominated notes in the international market last month. The issue was “extremely attractive for foreign investors,” the minister said. 

The deal raised cash to fund bond buyback, and it followed the sale of $1.8 billion worth of notes in US dollars and Dominican pesos in a two-part issue in February.

Moody’s affirmed the country’s Ba3 credit rating in August and changed the outlook to positive.

“Investors are looking at the Dominican Republic, not only in terms of political stability and attracting investment — the mean rates of return — but also because” it has a stable currency, the minister said. “Investors trust that authorities are going to do the job, which means maintaining foreign exchange in line with the projections.”

Isa said that even though economic growth is easing towards a 3% annual pace, the country has remained a regular issuer. “If you consolidate political and economic stability, then you become more attractive,” he said.

The Caribbean nation has begun work on a strategy for economic growth with decarbonization, Isa said, adding that he was hopeful new regulation on public-private partnerships will enable it to attract investment in climate adaptation projects.

The country aims to increase the share of renewable energies in its energy matrix to 27% from 25% in the coming years, he said. 

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