Peru Promotes Sustainable Sovereign Bond Issuance for Economic Recovery

Financed by UK PACT (Partnering for Accelerated Climate Transitions), the British Embassy and the Global Green Growth Institute (hereinafter GGGI), held an Earth Day webinar with participants from the Ministry of Economy and Finance of Peru, the Ministry of Finance of Chile and the Climate Bonds Initiative on the importance of sustainable sovereign bonds and their role in COVID recovery and projects that promote emission reduction. The guests agreed that sustainable sovereign bonds represent a significant opportunity for green economic recovery to improve the social and economic conditions of Peruvian citizens. 

Lima, April 22, 2021 – Sustainable bonds, along with social and green bonds, are innovative financial instruments that governments can use to fund public investment projects with greater environmental and social impact in different sectors, which is key in a context of increased climate ambition and post-pandemic recovery.  

President and Chair of GGGI Ban Ki-moon opened the event by highlighting the role that financial innovation is playing for sustainable recovery and increased global climate ambition. “Climate risk can also be a driver of new investments and opportunities,” he noted 

Ms. Kate Harrisson, the Ambassador of the United Kingdom in Peru, stressed that the UK PACT Green Recovery Challenge Fund supports Peru’s efforts to increase climate ambition. She explained that the UK recently significantly raised its climate commitment, pledging to reduce its greenhouse gas emissions by 78% by 2035, compared to 1990 levels. “The project we are launching today will contribute to achieving the Sustainable Development Goals and the implementation of the Nationally Determined Contribution under Peru’s new climate ambition,” she said. 

International experts also participated and shared their experience analyzing and developing these special bonds. Miguel Almeida from the Climate Bonds Initiative, pointed out that the projects most financed by these bonds are energy, transportation and green buildings, but that in Latin America there are also a number of land use projects, such as reforestation or forest conservation, and even industries. He explained that, although Latin America still represents a small part of the issuance of green and sustainble bonds, its participation in the global market is growing, particularly because the green bonds issued by Chile in recent years.  

Patricio Sepúlveda, Head of the Public Debt Office of the Ministry of Finance of Chile, highlighted Chile’s leadership as the “first and only country on the American continent to issue green sovereign bonds”, stressing that coordination between the Ministry of Finance and the Ministry of Environment was important. “In total, Chile has issued US$ 5.15 billion in social bonds, US$ 7.595 billion in green bonds and US$ 1.5 billion in sustainable bonds, totaling US$ 14.245 billion in thematic bond issues,” he said. 

Likewise, Paul Bringas, the Director General of the Public Treasury, explained that Peru’s future sustainable sovereign bond is part of the Integrated Asset and Liability Management Strategy of the Ministry of Economy and Finance, as well as the National Competitiveness and Productivity Plan.  

Finally, the Minister of Finance, Waldo Mendoza, closed the event reaffirming his commitment to this type of public and private initiatives, highlighting that it is very important to “incorporate economic, environmental and social resilience” in investment projects. “Peru’s future sustainable bond will be important because it involves the use of a new financial mechanisms with international standards, and for the positive effect on economic recovery, improving basic conditions for millions of Peruvians”. 

About GGGI 

GGGI is an intergovernmental organization with 38 member states (including Peru) that supports the government in the development of institutional, technical and financial capacities to implement national policy mechanisms for green growth.  

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