A Brazilian company has obtained the first green bond in Latin America to be fully dedicated toward water infrastructure.
Iguá, one of the largest sanitation companies in Brazil, obtained the Climate Bonds Standard Certification for Water Infrastructure, in an operation that will finance its concessions in the states of Mato Grosso and Paraná.
The funds of approximately BRL 880 million ($171 million USD) will be used to capture, treat and distribute water and collect sewage in the cities of Cuiabá and Paranaguá. Bureau Veritas, a global leader in testing, inspection and certification, acted as a verifier for the assets.
Iguá operates in the management and operation of water supply and sewage systems through concessions and public-private partnerships. It is present in 39 municipalities in six Brazilian states, with 18 operations that serve approximately 7.1 million people.
"Receiving this recognition is another great achievement and is in line with our trajectory,” said João Luiz Guillaumon Lopes, Corporate Finance and IR Director for Iguá. “In 2020, Iguá was the first company in the sector to issue green bonds in the country. These are important steps towards being a reference in green finance, with the commitment to act as the best sanitation company for Brazil."
The Climate Bonds Standard Water Infrastructure Criteria serves as a screening for investments in sustainable water projects. Water infrastructure certification has been formally available to issuers of green debt products in all markets since May 2018 and was updated in 2021.
The criteria were developed through a Technical Working Group process, which included representation from the Alliance for Global Water Adaptation and others. They were reviewed by an Industry Working Group and underwent a public consultation process in 2017.
"Brazil has an investment potential of over $1 trillion USD for infrastructure,” said Leisa Souza, head of the Latin America sector of the Climate Bonds Initiative. “The Iguá operation is an excellent example of how green bonds can contribute to financing sustainable infrastructure in the Latin American and Caribbean region."
In 2021, Iguá joined the Green Bond Transparency Platform, being the first sanitation company to disclose its data on the platform. Launched in April by the Inter-American Development Bank, the online tool allows investors to follow the main data and performance indicators of projects financed by green bonds in Latin America and the Carribbean.
Also last year, Iguá made a public commitment to reduce its CO2 emissions, advancing in the construction of the “Carbon Neutral” plan, which will guide actions for the total decarbonization of the business by 2030. The company is also adopting measures to reduce its footprint environment, such as abolishing the use of fossil fuels for light fleets, seeking energy efficiency consumption in equipment, and the use of 53.4 percent of renewable energy in its concessionaires.
