Latin American Bank Pioneers Sustainability Bond
Banco Continental, one of Paraguay's leading banks, made significant progress in green finance by winning the Sustainability Bond of the Year Award at the Environmental Finance Bond Awards in 2021.
Banco Continental, looking to support Paraguay's green and social development goals, faced the challenge of creating innovative financial instruments to finance environmental and social projects. The bank aimed to bridge the gap in sustainable financing for key sectors in the Paraguayan economy. As part of its lending process, the bank integrated satellite-based monitoring technology to the environmental and social risks analysis system, utilizing the internal tool named ContiMap, among other tools available for satellite imagery visualization. These tools, combined with geographic data from official sources of information, ensure adherence to sustainability standards in agriculture, ranching, and industry.
In 2020, Banco Continental launched its Sustainability Bond Framework, marking a strategic boost from the Social and Environmental Management System (SEMS) it had implemented in 2009. This framework enabled the issuance of a US$300 million bond to fund eligible projects in seven green categories and three social categories, aligned with those recognized by Green Bond Principles and Social Bond Principles.
The US$300 million bond funded a range of initiatives that complied with green and social eligible categories, including green buildings, clean transportation, sustainable management of natural resources and land use, sustainable water and wastewater management, prevention and contamination control, renewable energy projects, affordable basic infrastructure, access to essential services and employment generation. Banco Continental's leadership in sustainable finance has not only expanded green and social investments in Paraguay but has also set a benchmark for other financial institutions in the region. The bank’s innovative use of technology for monitoring and mitigating environmental and social risks represents a forward-thinking approach in the sector.
Banco Continental’s experience highlights the importance of integrating environmental and social considerations into the credit process. The development of the Sustainability Bond Framework, coupled with tools like ContiMap, showcases how innovative technologies can enhance sustainable finance efforts.
The bank’s pioneering sustainability bond marks a key contribution to financing the transition to a greener economy in Paraguay, positioning the bank as a leader in sustainable finance in Latin America.
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