Proparco invests in a Sustainable Bond Issuance to expand green and social financing from BAC Guatemala

Proparco is supporting Banco de América Central, S.A. (BAC Guatemala) in issuing its first sustainable bond to foster financial inclusion and environmental sustainability in Guatemala. This groundbreaking initiative will provide long-term financing to expand BAC’s social and green portfolios, creating opportunities for micro, small, and medium enterprises (MSMEs), women-led businesses, and climate change mitigation projects. Through this financing, Proparco reaffirms its commitment to advancing economic growth and climate resilience in the region.

The bond, with a term of up to five years and an issuance value of up to $140 million, will follow the International Capital Markets Association (ICMA) Social, Green, and Sustainable Bond Principles. Proparco will subscribe $50 million. Our partners IDB Invest, with $70 million, and LAGreen, with $20 million, will subscribe the remaining amount. The funds raised will support the growth of green investments in Guatemala while advancing financial inclusion for underserved groups.

Guatemala is highly vulnerable to climate change, with 83.3% of its GDP located in high-risk areas, and faces challenges in accessing financing for green investments due to informational gaps and limited availability of long-term financing. MSMEs, which represent 98.2% of businesses and 80% of employment but contribute only 40% of GDP, also struggle with credit access, particularly women-led businesses and marginalized groups due to structural and cultural barriers. Thematic bonds offer a solution by integrating sustainability into business strategies, enhancing reporting, and improving access to credit for green projects and underserved segments like MSMEs and women-led enterprises, helping to boost productivity and resilience.

Manuel Léon, Head of Proparco’s Regional Office for Mexico, Central America & the Caribbean stated: “We are thrilled to start a partnership with BAC, a leading financial group in Central America. This first dematerialized sustainable issuance contributes to the development of Guatemala’s capital markets and supports BAC’s efforts to reduce social and gender inequalities, and to strengthen climate resilience in Guatemala.”

Eric Campos Morgan, Executive President of BAC Guatemala, commented: “BAC is reimagining banking as a driver of sustainable progress. Our Net Positive strategy reflects our commitment to generate lasting value for people, businesses, and the environment. This sustainable bond issuance is a significant step in expanding access to green and social financing, reinforcing our mission to create a more inclusive and climate-resilient future for Guatemala and the region”.

The Project is expected to mainly contribute to three of the United Nations Sustainable Development Goals (SDGs), specifically: Goals 5 (Gender Equality), 8 (Decent Work and Economic Growth), and 13 (Climate Action).