Sustainable Finance has been a key enabler for many themes within the sustainable development sector, including sustainable construction and energy projects. Sustainable Finance has emerged as a go-to social financing tool within the development sector. Green Bond issuance has crossed $1 trillion since its inception, with its demand increasing over time. IFC, the behemoth multilateral that drives private capital within the development sector, along with the Japan International Cooperation Agency (JICA), awarded the final tranche of a $400 million green financing package to BBVA in Peru. The initial financing was done in 2023 for $150 million, with the remaining capital co-financed by JICA. IFC is also supporting BBVA in its ESG guidelines, which will strengthen the international bank’s overall sustainable activities. This is a bellwether initiative to drive the construction of ecological buildings in Peru; strengthens BBVA’s portfolio of sustainable construction and includes advisory business – technical support to real estate developers. Peru is known for being home to the Inca civilization, one of the oldest civilizations in the world. The Middle Road has identified Latin America as one of the most critical regions for development. The region has a lot of unlocked value, considering the underdeveloped sustainable infrastructure and young population with excellent formative education in selected countries. Example Uruguay used technology enablement during the pandemic for bettering civic outreach.
According to data from the United Nations Population Division (World Population Prospects 2019), the percentage of the population under 30 years old in Latin America and the Caribbean was approximately 49.7 percent in 2020.
This public-private partnership initiative in sustainable infrastructure will boost the underdeveloped real estate sector in Peru. Peru is classified as an upper middle-income country by the World Bank. The aim is to improve climate action and change by promoting green buildings of international standards. This includes lowering carbon emissions and making the buildings more energy-efficient. Environmental themes include greenhouse gas emissions, air quality, and energy management, among others. Many countries, including the US, have come out with sustainable packages and subsidies that promote sustainable buildings and energy. To know more about green finance and energy in the US, read the report here. According to World Energy Investment 2023 by the International Energy Agency, China, the European Union, the United States, Japan, and India are the top five countries respectively in the increase in annual clean energy investment from 2019-2023e.
IFC estimates that green buildings will be a $24.7 billion market size in emerging markets by 2030. To know more about sustainable finance, refer to Nishant Malhotra’s webinar on emerging trends in sustainable finance for Atal Innovation Mission. You can also purchase the online course on impact bonds here.
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- IFC and Japan grant final tranche of green financing of US$400 million to BBVA to promote sustainable construction in Peru
- World Energy Investment 2023 by IEA
Note: e is estimated. Edits after original publication.
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