June 2018

Colombia issues its first social bond in the local market. Funds will finance projects that benefit micro and small enterprises in vulnerable social sectors such as women, armed conflict victims and rural business owners. The bonds will be the first sustainable bonds placed in the local stock exchange, the Bolsa de Valores de Colombia, and are expected to be acquired by insurers, pension and severance funds, among others.

Bancóldex, Colombia’s corporate development bank, issued the country’s first social bond in the local market for 400,000 million pesos (approx. US$130 million). The bond was issued with technical support from the Inter-American Development Bank (IDB) through a technical assistance program financed by Switzerland’s Embassy in Colombia – State Secretariat for Economic Affairs (SECO).

The funds will be used to finance “projects related to employment generation and formalization, inequality reduction, support to rural economies, access to credit, men-women wage gap reduction, and integration of excluded sectors into the productive economy,” said Bancóldex President Mario Suárez Melo.

“It is imperative that the public sector actively seek to leverage private sector resources to finance our region’s sustainable development,” said Juan Ketterer, Chief of the IDB’s Connectivity, Markets and Finance Division. “At the IDB we are committed to support countries’ efforts to develop innovative financial instruments, such as social bonds, to strengthen local capital markets to help garner resources to finance sustainable development projects in a regular fashion.”

The social bond will also contribute to increase investment transparency. Its structuring was supervised and received positive reviews by Sustainalytics, an independent, global institution and a leader in social governance, environmental and corporate evaluations.