Bond Awards 2020

Sustainability bond of the year - bank - Bancolombia

Gema Sacristan Grupo Bancolombia issued a 657 billion Colombian pesos ($185 million) sustainability bond, which was bought in its entirety by IDB Invest.
It was the first time a private bank in Colombia has issued a sustainability bond.

Bancolombia has previously issued green bonds.

The sustainability bond issuance will help finance projects within Bancolombia's portfolio that have a measurable environmental and social benefit. Bancolombia claims the projects financed will contribute to 10 of UN Sustainable Development Goals.

"For IDB Invest, supporting Bancolombia with the first issuance of a sustainable bond by a private bank in Colombia represents another step in the creation of a new type of asset in capital markets. With it, IDB Invest seeks to obtain social and environmental returns, as well as financial ones, while contributing to the consolidation of responsible and impact investment in the region," says Gema Sacristán, chief investment officer at IDB Invest, part of the multilateral development bank, the Inter-American Development Bank (IDB) Group.

Deal highlights:

Issuer: Bancolombia
Date of issue: July 2019
Size: 657 billion Colombian pesos ($185 million)
Maturity: Five years and 10 years (two tranches, both with a single payment at maturity).
Use of proceeds: Eight social projects in Colombia, and 18 green projects.
External review: Vigeo Eiris
Other highlights/notable features: The first time a private bank has issued a sustainable bond in Colombia

The proceeds of this issuance will be distributed among 26 projects located in the states of Magdalena, Antioquia, Valle del Cauca, Nariño, Bolívar, Santander, Cundinamarca and Tolima.

Of these projects, eight are categorised as social, and focus on basic infrastructure and social housing. The proceeds of the bond will benefit 5,448 families with respect to housing, and more than 10,500 people who will have access to potable water, via a sanitation project.

The remaining 18 projects are classified as green projects, and focus on sustainable construction, energy efficiency and cleaner production. The financing of 15 sustainable construction projects will generate an estimated water and energy savings of 30% in a year. In the case of the two energy efficiency projects, the average energy savings will be 30% per year, while a cleaner production project will have an annual saving of 20% in energy and water.