Dominican Republic Issues $750 Million Green Bond

• The Dominican Government, through the Ministry of Finance, has issued green bonds for the first time in its history, totalling US$750Mn.
• These bonds achieved a rate of 6.70%, approximately 15 basis points lower than what would have been achieved with other non-thematic financing instruments of a similar term. Jochi Vicente, the head of the Treasury, explained that the funds obtained from this issuance will be used for green expenditures, as outlined in the country’s first Reference Framework for Green, Social, and Sustainable Bonds.
• This initiative implies savings for public finances due to the lower financing cost and supports projects aimed at mitigating the effects of climate change, to which the Dominican Republic is highly vulnerable. These projects will help protect public infrastructure and the population from climate-related impacts.
• The green bonds received demand from foreign investors in global capital markets that was six times higher than the amount issued. This significant interest demonstrates confidence in the Dominican Government’s commitment to environmental protection, social needs, and sustainable development, as well as the robust performance of the Dominican economy.
• Additionally, this operation was complemented by the repurchase of US$1,009Mn of an external bond maturing in 2025. To facilitate this repurchase and to cover part of the 2024 General State Budget financing needs, RD$105Bn of an external bond in local currency maturing in 2036 and US$500Mn of a reopening maturing in 2031 were issued.
• These operations have significantly impacted the debt portfolio of the non-financial public sector by decreasing the percentage of foreign currency financing and increasing the average maturity time of the global bond portfolio.

 (Source: Dominican Today)