Year: 2022

Winner: Edomex $145M ESG Bond

Green mobility and safe havens for vulnerable women were two areas targeted for support last
year by the State of Mexico, commonly known as Edoméx, via a new ESG bond issued by the
state’s government.
The MXN2.89 billion ($145-million) bond was designed taking into account the U.N.
Sustainable Development Goals (SDG’s), but it goes well beyond what others have done. Funds
will be used for very specific projects, including expansion of the state’s cable car system,
creation of new parks and construction of safe spaces for women.
“It is a bond that is sustainable and social, but also the first in the country with a gender
perspective,” says Rodrigo Jarque, Secretary of Finance for Edoméx.
The transaction marks the first issuance of ESG bonds by a subnational entity in Latin
America. Another important innovation – in both subnational and ESG contexts – is its use of
blockchain technology to make sure that what was promised with the issuance of the bond is
accomplished, via reporting on use of proceeds and the progress of projects financed by the
“This is the first bond at the subnational level committed to channel proceeds under the ESG
criteria. Each of the 18 projects has its own mapping that allows us to monitor impact,” Jarque
The bond, which matures in 2035 and carries a coupon of 11.56%, also marked the return
after six years of state and municipal governments to the bond market since the Mexican
government implemented its Financial Discipline Law in 2016.
The interest rate was higher than the norm for local bond issuances in Mexico, but Jarque says
this was due to the lengthy absence of subnational governments from the marketplace and so a
yield curve has still to be developed.
“We are not in the place where we want to be [on the coupon] because this is our first
emission,” Jarque says. “Once we have a program in place and other states follow us, we will
be able to build a curve. It will take a little time, but we are confident it will happen.”
The funds raised by the bond will be used for projects in three large categories: green projects,
with account for 52%; urban projects, such as roads and parks, at 34%; and gender equality,
at 14%.
Among the green projects are an array of electromobility options, including electric buses and
expansion of the Line 2 of cable car system, Mexicable, which is the longest in Latin America.

The line includes more than 300 cars and covers 10.6 kilometers. The bond will also be used to
finance bus, Mexibus, and trolley, Trolebus, systems. The Mexibus lines I and III also have a
very specific gender component, with 10% of the units earmarked as “pink cars” only for
women. Jarque says the decision to set aside units just was a respond to complaints of sexual
harassment on public transportation.
Also in the gender component, the bond includes the construction of two centers for women,
known as “Ciudad de las Mujeres,” which will provide shelter and services, from legal
assistance to daycare for children.
Jarque says all the projects – which should be finished by September 2023 when the term of
current Governor Alfredo del Mazo’s ends – will comply with the full set of commitments.
“Many times we have seen that bonds are issued and they are supposed to be for X or Y, but in
the end are used for Z. This is not going to happen with us. There will be no greenwashing
with our bond,” he says. LF

Joint Bookrunners: Banorte; BBVA; Scotiabank
Sole Sustainable Structuring Agent: Scotiabank
Issuer’s Legal Advisor: Gaxiola Calvo

All supporting financial institutions and law firms were transmitted to LatinFinance by the
award category winners. For updates please email