BBVA Colombia and IFC announce the financial sector’s first biodiversity bond issue

• Colombia is the world’s most biodiverse country per square kilometer. It is home to 14 percent of known plant species in the world, only surpassed by Brazil; and close to 4,500 bird species. This represents one third of all bird species in the world, making it the country with the greatest bird diversity on the planet.
• In 2023, BBVA in Colombia channeled 3 billion pesos for environmental conservation initiatives, which represents growth of nearly 40 percent compared to the resources allocated to this purpose in 2022.

BBVA and IFC, a member of the World Bank Group, announced the world’s first biodiversity bond in the amount of $50 million. The resources will be used to finance projects focusing on reforestation, the regeneration of natural forests on degraded land, mangrove conservation or restoration, climate-smart agriculture, wildlife habitat restoration, among others. BBVA Colombia is the issuing bank, with IFC acting as structurer and investor.

In addition to the investment, the transaction, which is subject to IFC’s internal processes and the approval of IFC’s board, includes advisory services to set the eligibility criteria and indicators that aim to foster best practice in sustainable management of natural resources.

“Colombia is the world’s most biodiverse country per square kilometer and this is a huge responsibility for those of us who live there. Our mission is to preserve this biodiversity. For this reason, it brings BBVA great pride to lead this initiative we are presenting today, together with IFC. It represents not only a commitment to biodiversity and adaptation to climate change, but also an opportunity for social and economic development,” said Mario Pardo, BBVA Colombia’s country manager.

Alfonso García Mora, Vice President of the IFC for Europe, Latin America and the Caribbean, added that: “Support for conservation projects helps to mitigate the adverse effects of climate change and safeguard biodiversity. This future bond issue has the potential to increase access to the financing available for initiatives that conserve, restore and protect biodiversity in Colombia. We are thrilled to support BBVA in this initiative - the first of its kind on a global scale - and to reaffirm our commitment once again to sustainable development and environmental protection in Colombia.”

In 2023, BBVA financed over 214.8 billion pesos for biodiversity, conservation, land use and land habitat conservation, including smart agriculture for the preservation of microbiome (community of microorganisms that exist in a particular environment); conservation of marine and freshwater habitats through the financing of respectful fishing projects and projects for the recovery of wetlands and bodies of water; conservation projects for mammal and bird species; and eco-tourism projects.

Colombia, a biodiverse country

Due to its geographic location, Colombia is a country that has special characteristics with diverse ecosystems in a single place. With over 50,000 plant species, Colombia is home to 14 percent of known species of plants in the world, surpassed only by Brazil. In addition, it has around 4,500 species of birds - one third of the world’s bird species can be found in Colombia, making it the country with the greatest diversity of birds on the planet.

With over 1,400 species of mammals, Colombia is the second country in the world in terms of mammal diversity, after Indonesia. Furthermore, it is the country with the greatest diversity of amphibians in the Americas with around 1,500 species, representing 14 percent of amphibians in the world, according to data from the EU Storem program.

However, climate change poses a major challenge. It not only affects biodiversity in animal and natural species, it also has an impact on communities, leading to situations of displacement from flooding, crop loss caused by drought and fires.

The World Bank estimates that climate change could cause up to 10 million refugees in Colombia by 2050.

BBVA in Colombia’s commitment to sustainability

In 2019, BBVA established sustainability as one of its main strategic pillars, and did the same in Colombia.

In 2023, the resources mobilized for these sustainability initiatives reached 3.03 trillion pesos. This represents an increase of 40 percent compared to the resources allocated to sustainability in 2022. In addition, and in line with the commitment to help build a more just society, BBVA in Colombia channeled 1.6 trillion pesos by the end of 2023 - 45 percent more than in 2022. These resources were used to boost inclusive growth through social infrastructure, creating better access to basic services and covering basic needs.

Furthermore, in 2023, the bank issued the first blue bond in Colombia, a financial solution that made it possible to mobilize financial resources and create opportunities related to the conservation of freshwater and coastal ecosystems. The first tranche of this bond totaled $50 million.

In previous years, the bank participated as a joint bookrunner in the first local green bond in Colombia in 2021, which was allocated to environmental sustainability projects. It was also one of the bookrunners of the first international social bond in the country in 2023 in the amount of $2.5 billion. The resources from this bond will be used by Colombia for eligible social expenditures, under the country’s Green, Social and Sustainable Bond Framework.

Another noteworthy aspect is that BBVA Colombia managed to offset its direct emissions in  2021, while accompanying its clients in the transition toward a greener future.

The BBVA Microfinance Foundation also has an important commitment to inclusive growth as the founder and controlling shareholder of Bancamía, the leading microfinance bank in Colombia. Bancamía serves 1.6 million microenterprises, 56 percent of which are women, and among these women, 81 percent are mothers, and nearly 40 percent live in rural areas.