IDB Invest Supports Renewable Energy Projects in Brazil through Sicredi’s First Green Bond Issuance

  • This $100 million deal is the first Green Tier 2 Bond issuance in international capital markets by Sicredi

 

 

IDB Invest acted as structurer and sole investor in Banco Cooperativo Sicredi S.A.’s debut in international capital markets, subscribing $100 million of the Issuer’s subordinated Tier 2 Green Bond Issuance due 2032, non-callable for the first 5 years. This is Sicredi’s first green bond issuance.

 

Resources from the bond placement will be used to finance eligible renewable energy and energy efficiency projects in Brazil, generating positive effects on the environment, measured in terms of the reduction in Greenhouse Gas emissions. The issuance is classified as Green, in accordance with the International Capital Market Association’s (ICMA) Green Bond Principles. This subordinated financing will also strengthen the capital structure of Sicredi through a new injection of Tier 2 capital.

 

A second-party opinion on Sicredi’s Green Framework was provided by Cicero, an external consultancy. Based on the overall assessment of the projects to be financed by the green bond, governance and transparency considerations, Sicredi green bond framework received “Dark Green Shading” score and a governance score of “Good” based on Cicero’s methodology. Cicero’s Shades of Green methodology expresses how well a green bond aligns with a low-carbon climate resilient future. The Shades of Green are light green, medium green and dark green.

 

As part of its advisory services and technical assistance provided, IDB Invest supported the development and implementation of Sicredi’s Sustainable Strategy and the creation of the capabilities necessary for the Issuer’s first Green Bond issuance. IDB Invest assisted Sicredi in the development of the methodological bond framework and its alignment with the core components of ICMA’s Green Bond Principles. Additionally, IDB Invest supported Sicredi in obtaining the independent verification of the methodological framework issued by Cicero.

 

As a second stage of technical assistance, IDB Invest will offer Sicredi advice to identify its social portfolio and support the design of a sustainable framework for future issuance of a new thematic bond.

 

The bond issuance will also contribute to the development of the capital markets and thematic bonds, specifically international subordinated thematic bonds, signaling to other potential issuers the possibility of utilizing thematic bonds to raise subordinated capital towards their sustainable development.

 

This deal contributes to three United Nations Sustainable Development Goals (SDGs): Affordable and clean energy (SDG 7), Industry, innovation and infrastructure (SDG 9), and Climate action (SDG 13).  

 

About IDB Invest 

IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social, and environmental development in the region. With a portfolio of $13.1 billion in asset management and 385 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.  

 

About Sicredi

Sicredi’s main activity is to act as an intermediary between financial markets, third party financial institutions and the cooperatives it finances. It also ensures the coordination of funding programs from Banco Nacional de Desenvolvimento Econômico e Social (BNDES) and other financial institutions and acts on behalf of the Sicredi System in short-term, collateralized funding. Sicredi together with Sicredi Confederation, Sicredi Guarantee Funds and Sicredi Foundation is a specialized entity which provides services to the whole system of Cooperativas Singulares.

 

About Sicredi System

Sistema de Crédito Cooperativo Sicredi (Sicredi System) is the second largest credit cooperative system in Brazil, serving 4.9 million members across 23 States, comprising of 108 individual credit cooperatives known as Cooperativas Singulares, five regional cooperatives (to which each cooperative singular is affiliated), a holding Company (Sicredi Participações S.A.). As a cooperative system, Sicredi is heavily committed to the social and economic development of its members, as well as the community and is an important agent of financial inclusion due to its reach in rural and remote communities that are underserved by the traditional financial system. For instance, 52% of the System’s branches are located in rural areas, 87% of the municipalities in which Sicredi is present have fewer than 100 thousand inhabitants, and in 216 Brazilian municipalities Sicredi is the only financial institution.