Ecuador: Banco Guayaquil issues its first green bond with the support of Proparco
published on 07 February 2023
Proparco has just subscribed to green bonds issued for the first time by Banco Guayaquil, up to 45 million dollars (USD). Ecuador's second largest private bank, a Proparco partner since 2019, has decided to mobilize financing for its clients' high environmental impact projects.
For Proparco, this is the second green bond subscription in Ecuador. For Banco Guayaquil, it is a first experience. However, this first Green Bond, underwritten by Proparco to the extent of US$45 million, could foreshadow the upcoming launch of a series of public green bond issues by Ecuador's second largest private bank in terms of balance sheet size and gross portfolio.
The bank, which has been a partner of Proparco since 2019, is looking to expand its financing of green projects. It could also become a leading player in the issuance of thematic bonds as it has already issued a Social Bond in 2020.
For this new subscription, the bank has developed a Green Bond Framework in line with the Green Bond Principles (GBP) of the International Capital Market Association (ICMA). The funds from the issuance will be used exclusively to finance eligible green assets. For the selection of projects, detailed eligibility criteria have been defined and divided into categories: energy efficiency; renewable energy; green buildings; and sustainable natural resource management.
This initiative is expected to help the country achieve its low-carbon trajectory goals as set out in the Paris Agreement. This is a crucial issue given Ecuador's dependence on hydrocarbons: the country is a major oil exporter (40% of state revenues and 60% of exports in 2016), leaving the economy and public finances exposed to fluctuations in its price.
The project also contributes to Proparco's own climate finance objectives and to various Sustainable Development Goals: SDG 13 (Action on Climate Change) and 8 (Decent Work and Economic Growth). Depending on the final allocation of resources, the project could also contribute to SDGs 7 (Clean and Affordable Energy), 9 (Industry, Innovation and Infrastructure), 11 (Sustainable Cities and Communities) and 6 (Clean Water and Sanitation).
“We are very proud of the issuance of our first Green Bond. Thanks to Bolsa de Valores Guayaquil and Proparco. We will continue working on initiatives that preserve our environment under the highest standards and eco-efficient practices in accordance with the Principles of Responsible Banking, aligned with the Sustainable Development Goals. In this way, we promote the best practices among our clients, for the benefit of current and future generations,” said Julio Mackliff, Excecutive Vicepresident of Banco Guayaquil.
"We are very grateful for the opportunity offered to us by Banco Guayaquil to subscribe in full to its first green bond. Accompanying our clients over the long term, towards more innovation and impact in a way that protects the planet, is fully in line with Proparco's mission and its future ambitions," said Françoise Lombard, Proparco's CEO.
