Colombia Launches the World’s First Biodiversity Bonds at COP16
Colombia has used the occasion of COP16 being held in Cali to launch bonds with an exclusive focus on biodiversity projects for the first time in Latin America. The announcements, made on Monday in the South American country’s third-largest city, are part of an effort to create the innovative financial instruments required to scale up private sector investment for this purpose, with the aim of achieving the goals proposed by the Conference of the Parties to the Convention on Biological Diversity, the formal name of the summit.
Colombia’s Environment Minister Susana Muhamad, who is also chairing COP16, celebrated the announcement as “a funding milestone” for the recovery of nature. “We hope that it translates into joint public-private work models that take us forward to a transformation process at the pace that this emergency is placing upon us, but with the conviction that with this, it will begin to make sense that Colombia is one of the most biodiverse countries in the world for the welfare of our own population,” she said Monday, the day of the summit dedicated to the theme of finance and sustainability.
The minister was referring to a bond issued by Banco Davivienda in which the International Finance Corporation (IFC), an arm of the World Bank, will invest up to $50 million. The Colombian entity, in turn, will channel this money into loans for projects with positive impacts on biodiversity. In parallel, BBVA Colombia has launched another bond with the same focus, divided into two tranches: one of up to $35 million subscribed by IDB Invest, the investment arm of the Inter-American Development Bank, and another of up to $35 million subscribed by the IFC.