Green Bond Partnership Facility-Peruvian Window

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The structured fund Latin American Green Bond Fund (LAGREEN) is designed to prepare green bonds in cooperation with local issuers and to make equity investments in them. Green bonds are fixed-interest bonds issued by actors with an active commitment to climate finance (including private and public banks, as well as project developers in the field of renewable energies). The proceeds of the bond are allocated to a specific climate project and compliance with binding criteria is transparently monitored during the term of the bond. An anchor investment by LAGREEN in a green bond has a positive signaling effect for the local capital market. By examining and implementing an investment by LAGREEN, it becomes more attractive for local investors to invest in the same green bond. In this way, private investors are introduced to this relatively new financial market instrument and persuaded to invest directly in green bonds. LAGREEN thus leverages public funds and mobilizes urgently needed additional private capital for climate-friendly investments to achieve the Nationally Determined Contributions (NDCs). In addition, LAGREEN plans to invest in local currency green bonds wherever possible to promote the development of local capital markets.