Paraguay is in conversations with banks about selling its first sustainable bonds in the local and international markets, Finance Minister Carlos Fernandez told LatinFinance.
“We are at this moment working closely with the IDB. Probably next year we can have some information on materialization regarding a bond issuance, a green bond issuance by the republic on the international markets,” he said.
“I think the appetite is there. There is a lot of interest on green policies around the world, including green financing. So there is a huge market that we have the condition to explore,” he said.
Fernandez said the Latin American country is seeking to diversify its sources of funding, as it seeks to raise $1 billion in bond markets next year. “You never have to put your eggs in the same basket,” he said.
Paraguayan President Santiago Peña, who took office August 15, told LatinFinance last month he wants to make sustainable investment a cornerstone of his economic program. The country of 7 million was the first in Latin America to adopt the UN’s Sustainable Development Goals in domestic regulations. Peña also highlighted his steps to find alternate sources of financing, including from countries such as Saudi Arabia.
As funding costs on the international capital market are rising, Paraguay is taking a closer look at the domestic bond market, including sales of green bonds in local currency, the finance minister said.
The government already saw foreign investors pick up local-currency government debt in a domestic sale in July, he said.
“We have been talking with some commercial banks. They said that we can each issue easily, for example, on the domestic currency market, up to $200 million in green bonds,” said Fernandez. “We are trying to follow also the example of other countries in the region, and they were successful placing these bonds. We are going to be probably the fourth country [in Latin America] to issue these green [sovereign] bonds,” he said.
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