The Guatemalan branch of Panamanian lender Banco Promerica issued the first sustainability bond in the country, a $50 million deal anchored by IDB Invest, the private sector arm of the Inter-American Development Bank, it said in a press release.
IDB Invest bought $30 million of the bonds and mobilized $20 million from Luxembourg-based LAGreen, a Latin America-focused green bond fund, it said on Thursday.
This issuance is part of the bank’s $500 million program to issue green, social or sustainability bonds.
IDB Invest could participate in the program’s second issue by buying up to $15 million of the bonds, a deal that is expected to attract other investors, it said. IDB Invest was the anchor investor in the first deal.
Banco Promerica will use the proceeds to fund green and social projects in Guatemala, it added.
The Central American nation ranks fifth among countries most exposed to economic risks from climate disasters.
The resources mobilized from LAGreen are to be used to finance loans for micro, small and medium enterprises, including those owned by women, and credits for the institution’s green project portfolio. These smaller businesses contribute to 80% of employment in Guatemala, but only an estimated 12% of them have access to financing.
In May last year, Banco Promerica requested a $50 million loan from the International Finance Corporation (IFC) to fund loans to small and medium enterprises and green projects.