A New Benchmark for Peru: LAGreen Invests in Caja Cusco’s First Sustainable Bond

Article originally published on LAGreen's website on 31/12/2025. The European Union through LACIF contributes to the LAGreen Fund through financial instruments and technical assistance.

The LAGreen Fund (“LAGreen”) has invested the equivalent of USD 15 million in local currency in a subordinated sustainable bond issued by Caja Municipal de Ahorro y Crédito Cusco S.A. (“Caja Cusco”).

This landmark transaction, which will total up to USD 50 million, represents the first subordinated sustainable bond ever issued by a Peruvian municipal credit and savings institution (Caja Municipal), setting a new reference for the country’s thematic bond market. The first issuance of the transaction was USD 30 million equivalent in local currency, allocated among IFC and LAGreen.

The transaction was arranged by IFC, and LAGreen played a catalytic role by supporting Caja Cusco through its Advisory & Capacity Building Facility during the pre-issuance phase. This engagement included the development of Caja Cusco’s Sustainable Bond Framework, aligned with ICMA’s Sustainability Bond Guidelines (2025).

This transaction demonstrates how LAGreen continues to reinforce its leadership in advancing thematic bond markets in Peru. Building on its pioneering investment in BanBif’s subordinated green bond, that helped to lay the foundation, this second deal with Caja Cusco, one of the country’s most prominent microfinance institutions, marks another milestone in the Fund’s strategy and positioning.

The bond will allocate proceeds to green, social, and Amazonia-focused projects. These categories include sustainable and climate-smart agriculture, renewable energy, circular economy initiatives, water and wastewater management, biodiversity conservation, affordable housing, gender-focused lending, and enhanced financial inclusion for underserved rural populations.

Through this investment, LAGreen reinforces its mission of supporting issuers throughout the full sustainable bond lifecycle, from pre-issuance preparation and framework development, to investment, and post-issuance reporting. For Caja Cusco, the transaction will help scale its portfolio of more than six green lending products, supporting the categories detailed above.

Myriel Frische, Portfolio Manager of LAGreen, said: “This issuance demonstrates how innovative sustainable finance can expand beyond traditional actors and reach the institutions closest to underserved populations. By supporting Caja Cusco’s first subordinated sustainable bond, LAGreen is helping unlock long-term capital for projects that strengthen climate resilience, improve rural livelihoods, and protect critical ecosystems such as the Amazon. We are proud to accompany Caja Cusco throughout the entire issuance process and further deepen our commitment to advancing thematic bonds in Peru.”

Yovana Enríquez Tisoc, CFO of Caja Cusco, added: “This subordinated sustainable bond marks a milestone for Caja Cusco, as it represents the first issuance of its kind in Peru’s microfinance sector. The support of LAGreen and IFC enables us to expand financing for projects that strengthen the sustainable activities of rural producers, promote climate-smart practices, and create new opportunities for thousands of families in underserved territories. From the Andes and the heart of the ancient Tahuantinsuyo, our mission has always been to drive the development of our communities with dignity and purpose. This step reaffirms our commitment to uniting financial inclusion, sustainability, and regional development for the benefit of the country.”

END

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 managed 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).

For more information visit https://lagreen.lu and follow us on LinkedIn.

About Finance in Motion
Finance in Motion is a global impact asset manager focused exclusively on sustainable development in emerging markets and developing economies. The company structures, manages, and advises impact investment funds that bring together public and private investors to address climate change, strengthen biodiversity conservation, foster the sustainable use of natural resources, improve livelihoods, and promote economic opportunities.

For more information, please visit us at: www.finance-in-motion.com
You can also follow us on LinkedIn

About Caja Cusco

Caja Cusco is one of Peru’s leading microfinance institutions, with more than 37 years promoting financial inclusion, productive development, and economic opportunities across urban and rural communities throughout the country. Committed to its social mission, Caja Cusco provides accessible financial solutions for entrepreneurs, families, and small-scale producers from diverse economic sectors who have historically faced barriers to formal credit. In recent years, the institution has strategically integrated green finance and sustainability into its business model, developing a growing portfolio of products for sustainable agriculture, energy efficiency, dignified housing, and environmental conservation. With a management approach rooted in values, transparency, and community growth, Caja Cusco remains committed to driving sustainable economic development and collective progress across Peru.

Media contact LAGreen
Nusha Westhoff
Director Marketing & Communications
Phone: +49 69 271 035 742
Email: info@lagreen.lu

Media contact Climate Bonds Initiative
Eduardo Mosqueira Mellado
Public Relations Analyst
Email: emosqueira@cmac-cusco.com.pe