Dominican Government finalizes its first green bond issue

The funds will be associated with various projects and programs with a direct impact on the environment, social protection and the country’s development.

The Dominican Government, through the Ministry of Finance, successfully completed its first ever green bond issuance. This operation amounted to US$750.0 million, achieving a rate of 6.70%.

This is 15 basis points lower than the rate that would have been achieved with other non-thematic financing instruments with a similar term.

Jochi Vicente, Minister of Finance, explained that the resources obtained with the placement will imply savings for public finances due to the difference in the cost of financing.

In addition, he said that they will be used for eligible green expenditures under the country’s first framework of Green, Social and Sustainable Bonds, published last week.

Vicente said that the Dominican Republic is one of the countries most vulnerable to the effects of climate change. For this reason, state investments in projects and programs are necessary. These will contribute to mitigate the phenomenon and its impact on the population and public infrastructure.

Green bond issuance is part of the 2024-2028 debt strategy.

The country’s first green bond issue received demand in the global capital markets from foreign investors, six times the amount requested. This milestone demonstrates confidence in the government’s commitment to environmental protection. In addition, social needs and sustainable development, as well as the solid performance of the Dominican economy.

“Every time we go out to the international capital markets we receive a remarkable support which, among other factors, is a product of the good management we have given to the public debt”, highlighted the official.

The Deputy Minister of Public Credit, María José Martínez, highlighted that these operations are part of a sustainable issuance program included in the 2024-2028 debt strategy, which is being implemented by the Government. Additionally, they are aligned with the country’s goals established in the National Development Strategy 2030.

“The inclusion of thematic bonds in our financing plan, in addition to the environmental and social benefits they promote, are a sign of the commitment to transparency in the management of public debt and, in turn, diversify the investor base,” emphasized Martínez.

This operation was complemented with a US$1,009.0 million repurchase of an external bond maturing in 2025. For this repurchase and to cover part of the financing needs in the General State Budget. For this 2024, RD$105,000.0 million of an external bond in local currency maturing in 2036 and US$500.0 million of a reopening maturing in 2031 were issued.

These operations have a significant effect on the non-financial public sector debt portfolio. This is due to the fact that they represent a decrease in the percentage of foreign currency financing. In addition, the increase in the average maturity time of the global bond portfolio.

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Dominican Republic Live Editor

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