FIRA Places First Green Resilience Bond in Latin America
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FIRA Places First Green Resilience Bond in Latin America

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Eliza Galeana By Eliza Galeana | Junior Journalist & Industry Analyst - Thu, 04/27/2023 - 12:24

The Trust Fund for Rural Development (FIRA) placed Latin America’s first green resilience bond (FEFA 23V) on the Mexican Stock Exchange (BMV). The resources obtained will promote investment in productive projects to improve the resilience of producers and value chains in the agricultural sector.

On April 25, 2023, FIRA announced it had placed Latin America’s first green resilience bond on the stock market for MX$2.8 billion (US$154.89 million ) for a period of 3.1 years. In addition to the green resilience bond, FIRA placed another 1.5-year bond (FEFA 23) for MX$5.5 billion (US$304.32 million). Both bonds raised MX$8.5 billion (US$ 470.31 million) with a global demand of MX$9.7 billion (US$536.71 million), 1.14 times the issued amount.

FIRA pointed out that the resources obtained will be destined to promote the investment of productive projects that can improve the resilience of producers and value chains in the agricultural sector. Through this, FIRA aims to reduce risk and vulnerability in rural areas so that farmer communities can endure the effects of climate change.

FIRA, along with the French Development Agency (AFD), the Global Green Growth Institute and UKPact Mexico, identified 88 different types of investment projects focused on increasing resilience to climate change risks in the food sector and rural areas. FIRA stressed the importance of defining a taxonomy for eligible projects. “It is a methodological mechanism that provides clarity and security to investors about the use of resources,” the statement reads. In this regard, the projects were divided into absorption and adaptation dimensions.

The Green Resilience Bond is an innovative investment mechanism, aligned with the Federal Government’s efforts to follow the Sustainable Financing Mobilization Strategy of the Ministry of Finance. Additionally, it is compatible with Mexico's new Sustainable Taxonomy regarding investment projects in the food sector. FIRA’s bond encourages resource mobilization toward activities that contribute to social welfare and environmental care.

Photo by:   Envato Elements

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