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In May 2023, OeEB signed an investment in form of Subordinated Notes in the amount of USD 25 million to the Latin American Green Bond Fund, S.A. SICAV-SIF ("LAGreen"), located in Luxembourg. With KfW as initiator, Finance in Motion GmbH ("FIM") as fund advisor and Santander Asset Management ("SAM") as co-advisor and with initial capital from the EU and the German Government, the financing serves as an investment in green bonds and makes an important contribution to the development of the capital market in LAC's regions.
| Project name | Latin American Green Bond Fund, S.A. SICAV-SIF |
| Region | Latin America and the Caribbean ("LAC") |
| Sector | Banking and financial services |
| Service | Investment Finance |
| OeEB project volume | USD 25 Million |
| International climate finance according to UNFCCC | Yes |
| Additionality | Financial additionality |
| Projekt partner(s) | Finance in Motion GmbH, Santander Asset Management ("SAM"), KfW, BMZ, European Commission |
The Latin American Green Fund ("LAGreen") is the first LAC green bond fund which aims to promote market development for climate financing in the LAC region. In accordance with KfW, there is currently still a large financing gap for climate investments in the LAC region. Stated by estimates, more than USD 100 billion are missing annually. This gap can only be closed with the help of private capital. Hence, green bonds play an important role here. The long-term investment in subordinated notes should enable LAGreen to make long-term investments in green bonds.
The investments in green bonds and technical assistance are intended to support new issuers in gaining access to an innovative financing instrument. The fund promotes high impact standards for green bonds, specifically in terms of green impact, reporting and impact assessment. The fund will also strive to set a benchmark in terms of clear, transparent, and robust reporting methodologies in the green bond market. Issuers shall adhere to best international practices, including the Green Bond Principles published by the International Capital Markets Association ("ICMA").
OeEB supports the local LAC capital market in implementing climate-related projects, creating and maintaining jobs, and generating income. The financing is in line with OeEB's strategy of supporting climate change activities.