LAGreen invests in Banco Promerica Guatemala’s Sustainable Bond

Guatemala and Luxembourg
May 30, 2024

LAGreen Fund, a leading green bond fund dedicated to Latin America and the Caribbean, proudly announces its investment in the first thematic bond issued in the Guatemalan market.

LAGreen's subscription of USD 20 million to the Senior Sustainable Bond represents a pivotal moment for the local market as well as for Banco Promerica, as it ventures into the realm of thematic bond issuance. LAGreen's involvement highlights the fund's commitment to fostering green initiatives and catalyzing market development in Guatemala. Projects financed through the bond are expected to contribute to multiple Sustainable Development Goals (SDGs), including the promotion of affordable and clean energy and climate action. In parallel, the proceeds will support on advancing the objectives of Guatemala’s newly introduced Energy Transition law.

The investment was part of a USD 50m series issued by the bank, which also counted with IDB Invest as investor. The bond is structured according to the Sustainability Bond Guidelines issued by the International Capital Market Association (ICMA) and counts with a second party opinion from Pacific Corporate Sustainability (PCS). LAGreen’s investment was structured jointly with Symbiotics Investments, through a bond issued by Micro Small and Medium Enterprises Bonds S.A. and listed on the Luxembourg Green Exchange “LGX”.

This strategic collaboration between LAGreen Fund and Banco Promerica aligns with the fund's mission to support the use of thematic bonds as a solution for better connecting capital market funding with sustainable projects across the continent.

“With this investment, LAGreen makes an important contribution to the development of the regional green bond market and continues pushing boundaries by enabling the first issuance of a thematic bond in the Guatemalan market.” said Johannes Scholl, Chairman of LAGreen.

“We are delighted for this collaboration with LAGreen. It allows us to continue promoting our mission of supporting inclusive growth and environmental sustainability in Guatemala. This investment not only reinforces our commitment to sustainable finance but also places us as leaders in the sustainable bond market”, commented Edgar Bran, CEO of Banco Promerica Guatemala.

In addition to the subscription, LAGreen is committed to providing technical assistance to Banco Promerica in enhancing its sustainability reporting and impact measurement capabilities. By bolstering the bank's internal capacity and knowledge of thematic bonds, LAGreen aims to facilitate the delivery of high-quality reports that meet the evolving needs of bond investors.

About LAGreen

LAGreen is the first green bond fund dedicated to Latin America. By investing in green bonds and supporting new issuers with technical assistance, LAGreen’s goal is to boost environmental and social benefits across the region and promote the transition to a green economy. In addition, the fund aims to promote high impact standards for green bonds, both in terms of the impact of supported projects, as well as green credentials, reporting, and impact assessment.

As an impact investment fund advised by Finance in Motion and Santander Asset Management, LAGreen was established as an initiative of Germany's KfW Development Bank, with seed capital provided by the European Union (EU) and the German Federal Ministry for Economic Cooperation and Development (BMZ).

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