IDB Invest, a member of the IDB Group, has structured and subscribed the first private issuance of a sustainable bond in Uruguay. This is a subordinated issuance for a total of up to $15 million, issued by Banco Bilbao Vizcaya Argentaria Uruguay S.A. (BBVA Uruguay). The transaction, with a tenor of up to 10 years, seeks to support the growth of BBVA Uruguay's portfolio of sustainable projects, while strengthening its capital structure, following Basel standards as complementary capital.
The funds will be used to finance projects related to energy efficiency, clean transportation, sustainable agriculture, sustainable construction and promotion of the micro, small and medium-sized enterprises (MSME) segment, among other sustainable investments. In addition, this issuance will contribute to the development of the capital market and thematic bonds in Uruguay.
The financing will contribute to BBVA Uruguay's sustainability strategy, facilitating the segmentation of its sustainable portfolio and the development of products and services that meet the needs of green and social investments.
IDB Invest advised BBVA Uruguay in the design of the methodological framework for the use of funds, which contains the criteria for selecting, monitoring and evaluating projects. The issuance has an independent opinion, known as a second party opinion by Vigeo Eiris. This is prepared in accordance with an exclusive methodology of environmental, social and governance assessment and with the voluntary procedures on the Principles of Green, Social and Sustainable Bonds issued by the International Association of Capital Markets (ICMA).
This operation potentially contributes to nine United Nations Sustainable Development Goals (SDGs): No Poverty (SDG 1), Gender Equality (SDG 5), Clean Water and Sanitation (SDG 6), Affordable and Clean Energy (SDG 7), Decent Work and Economic Growth (SDG 8), Industry, Innovation and Infrastructure (SDG 9), Sustainable Cities and Communities (SDG 11), Climate Action (SDG 13) and Life on Land (SDG 15).
During its structuring, IDB Invest supported BBVA Uruguay with advisory services that allowed the institution to identify and segment its sustainable portfolio, structure a conceptual framework for the issuance of the sustainable bond, and obtain a second opinion from an independent third party. Additionally, through an action plan, IDB Invest will support BBVA Uruguay to implement improvements in its Environmental and Social Risk Management System.
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 BBVA in Uruguay
BBVA Uruguay was established in 2000 with the merger of two large banks (BBV Banco Francés Uruguay S.A. and Banco Exterior de América S.A. Uruguay), and expanded its market share in 2010 with the acquisition of Crédit Uruguay, from the Crédit Agricole group. Today it is the third private bank in the country, with a market share of around 20% for both loans and deposits. BBVA Uy is a mainly commercial bank, with 79% of the loans destined to companies and 21% to families, mainly mortgage loans (75%) followed by auto loans, consumer loans and credit cards. As of the issuance date, the bank has 31 branches, which it complements with strategic alliances mainly for the commercialization of credit cards.