Latin America

Uruguay launches sovereign bond linked to climate targets

Uruguay will be the first country in Latin America to borrow at an interest rate tied to the fulfillment of its climate commitments

uruguay climate bond
Wind power plants close to the Brazil-Uruguay border. Photo: Douglas Pfeiffer/Shutterstock

Sustainable finance continues to expand in Latin America, as governments and companies take advantage of growing interest among investors in instruments that protect biodiversity and respond to the climate crisis. In 2020, more than USD 16 billion of green, social, and sustainable bonds were issued in the region.

Though their purpose may vary, these bonds share similar characteristics. A company or government takes on debt, and these funds must be used exclusively to meet a specific environmental or social goal, such as developing clean transport infrastructure, expanding renewable energy, or meeting the Sustainable Development Goals.

However, with the growth of...

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