Brazil’s Finance Ministry says that the government has now started negotiations with Mexico, Germany, Colombia and Chile, as the country looks to set up a framework to issue ESG bonds amid a push for sustainability-linked measures.
This latest development is coming after government officials earlier this year said the South American country planned to issue its first-ever green bond in 2023 as the Lula-led administration aims to use its environmental agenda to attract investment to the country.
Recall that president Luiz Inacio Lula da Silva had pledged to fight deforestation and reverse the policies of former far-right leader Jair Bolsonaro, who oversaw a spike in Amazon rainforest destruction.
In a statement, Brazil’s Treasury Secretary, Janet Yellen was quoted as saying that talks have been held with countries that have already developed a framework for such issuances. The statement said Brazil’s ultimate goal “is to build a robust framework that will serve as a reference for an active and constant presence” in markets focused on themes like climate change, though no date has been decided yet for its official launch.
Read also: Hong Kong sees improved air quality in 2022
Among the nations consulted by Brazil, Chile in 2019 was the first Latin American country to issue a sovereign green bond, followed by Mexico the next year and Colombia in 2021. Germany meanwhile raised 6.5 billion euros ($6.96 billion) from its first-ever green bond in 2020 with overwhelming demand.
Brazil’s treasury had in early 2021 during the Bolsonaro administration, said that it would build a framework for issuing an ESG sovereign bond, but the project failed to move forward.
But under the new administration, the treasury secretary said that it was holding internal discussions and talking with other government bodies, including the World Bank and the Inter-American Development Bank, to decide the guidelines and projects set to integrate the sustainable framework as investors see the renewed efforts for green issuance as a good sign from Latin America’s largest economy.
Story was adapted from Reuters.
