COLOMBIASUSTAINABLE
FINANCESTATE OF THE
MARKET 2022

Prepared by the Climate Bonds Initiative and Metrix Finanzas

Supported by the Technical Assistance Facility of LAGreen Fund

Table of contents
Introduction 2
Sustainable finance to support
resilient growth 3
Sustainable market overview 5
Green bonds 6
Social bonds 9
Sustainability bonds 10
Sustainability-Linked bonds (SLB) 11
Evolution of Green Financein Colombia 12
Public and private sectors
collaborate to drive sustainablefinance in Colombia 13
Adaptation and Resiliencein Colombia 15
State of the economic sectors
addressed in the Colombian
Green Taxonomy 17
Outlook 20
Annexes 21

Introduction
About this report
This report identifies sustainable investment
opportunities in Colombia in accordance with theColombian Green Taxonomy and the potential forgreen and other thematic instruments to attract
investment to Colombia. The report describes
the shape and size of the Colombian green,social, sustainability and sustainability-linked(GSS+) debt market and provides an overview ofsupporting policy developments and milestones
over the last decade. By highlighting tangible
green opportunities for Colombia’s critical
economic sectors, their alignment with leadinginternational standards, and guidelines forinvestors and issuers, this report aims to promote
continued growth in Colombia’s sustainablefinance market.
The LAGreen Fund supported the Colombia’s
Sustainable Finance State of the Market 2022.
The Climate Bonds Initiative (Climate Bonds)
together with Metrix Finanzas analysed thedata, conducted research, and consulted key
stakeholders in Colombia to develop its content.

About Metrix Finanzas
Metrix Finanzas is an investment banklocated in Bogotá, Colombia, with 25 yearsof experience in the market and more than
330 projects executed. The firm specialises
in providing financial and strategic
advisory, structuring alternative investment
opportunities for investors, and advising
companies and institutions on the financial
evaluation of projects. In the past eight years,
Metrix has dedicated its efforts to promoting
green finance in Colombia by being part ofthe construction and implementation of
the Green Bonds Road Map for the country.
Metrix has participated in the issuance ofgreen and social bonds (Banco de Bogotá
and Corficolombiana, respectively), andcontributed to the Colombian Green
Taxonomy pilots for financial institutions
and the insurance sector. Metrix has been apioneer in sustainability in the Colombian
investment banking sector.

Endnotes 26

List of Abbreviations and Acronyms
A&R: Adaptation and Resilience
ABS: Asset-backed Securities
AFOLU: Agriculture, forestry,and land use
BVC: Colombian Stock
Exchange
DNP: National Planning
Department
DANE: National Administrative
Department of Statistics
ENEC: National Circular
Economy Strategy
ENFC: National Climate Finance
Strategy
FDI: Foreign Direct Investment
FINAGRO: Agricultural Sector
Financing Fund
FMCG: Fast-moving consumer
goods
FONSUREC: Fund for
Sustainability and Climate
Resilience
GBDB: Green Bond Data Base
GDP: Gross Domestic Product
GHG: Greenhouse Gas
GSS+: green, social,sustainability and sustainabilitylinked
ICMA: International CapitalMarkets Association
ICT: Information andcommunication technology
IDB: Inter-American
Development Bank
IFC: International FinanceCorporation
IPCC: Intergovernmental Panel on
Climate Change
LAC: Latin America and the
Caribbean
MADS: Ministry of Environment
and Sustainable Development
MDB: Multilateral Development
Bank
MHCP: Ministry of Finance andPublic Credit
MPA: Marine Protected Area
NAMA: Nationally Appropriate
Mitigation Action
NDB: National Development
Bank
NDC: Nationally Determined
Contributions

NGFS: Network for Greening the
Financial System
NbS: Nature-based Solutions
OECD: Organization for
Economic Co-operation andDevelopment
PIGCCT: Formulation
and Implementation ofComprehensive Territorial
Climate Change Management
Plans
PIGCCme: Integrated Climate
Change Management Plan for
Mining and Energy Sector
PNACC: National Plan for
Adaptation to Climate Change
PNCC: National Climate Change
PolicyPND: National Development
Plan
PPP: Public and private
partnerships
SARAS: Environmental andSocial Risk Analysis System
SDGs: Sustainable
Development Goals
SMEs: Small and Medium
Enterprises
SFC: Financial Superintendenceof Colombia
SISCLIMA: National Climate
Change System
SPO: Second Party Opinion
SPT: Sustainability Performance
Targets
SLB: Sustainability-linked bonds
SSBDB: Social andSustainability Bond Database
S&S: Social and sustainability
TAF: Technical AssistanceFacility
UoP: Use of Proceeds
VAT: Value Added Tax

About the Climate
Bonds Initiative
Climate Bonds is an internationalorganisation working to mobilise global
capital for climate action. Climate Bonds
promotes investment in projects andassets needed for a rapid transition toa low-carbon and climate-resilience
economy. Its mission is to help drive
down the cost of capital for large-scale
climate and infrastructure projects andsupport governments seeking increased
access to capital markets to meet climate
and greenhouse gas (GHG) emission
reduction goals. Climate Bonds has astrong presence in Latin America and the
Caribbean (LAC), including an office basedin Bogotá, Colombia.

Acknowledgements
This report was possible thanks to thecooperation from the Ministry of Environment
and Sustainable Development, the Ministry of
Finance and Public Credit, the Ministry of Minesand Energy, the National Planning Department,
the Financial Superintendence, the Colombian
Stock Exchange, the International FinanceCorporation, the Inter-American Development
Bank, Asobancaria, BBVA, Posse Herrera Ruiz,
DLA Piper Martinez Beltran, Brigard-Urrutia,
Optima Consultores, EQA and LAGreen
consultant, César Arias. Thank you for your time,knowledge and effort on promoting sustainablefinance in Colombia.

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative

About LAGreen Fund
The LAGreen Fund is the first impact
investment fund dedicated to promoting
the issuance of green bonds in Latin
America. The fund aims to support positive
climate, environmental and societal benefits
through the promotion of Latin America’s
green bond market. With the purpose of
consolidating green bonds as instruments
for mobilising resources towards moresustainable and green economic models
in the region, the LAGreen Fund provides
technical assistance and invests in green
bonds issued in the region.
The German Development Bank (KFW)
established the LAGreen Fund, with seedcapital provided by the European Union and
the German Federal Ministry for Economic
Cooperation and Development (BMZ)
and Finance in Motion as an investment
advisor. The fund seeks to support theissuance of high-impact thematic bondsin the region, attract a greater volume oflong-term funding for sustainable projects,
as well as support issuers through technicalassistance during the different phases ofbond preparation, issuance, and postissuance, and through commitments topurchase a significant portion of the issue.

2

Sustainable finance to support resilient growth
Colombia overview
Colombia is the third mostpopulous country in Latin
America (after Brazil and
Mexico) with approximately
51.5 million people, andthe second largest in termsof biodiversity.1 Colombia is characterised not
only by its natural resources and variety of
ecosystems, but also by its human capital andethnic and cultural heritage.2 The country hosts
forests, two oceans (Pacific and Atlantic), jungles,
deserts, wetlands, mountains, moors, among
other ecosystems. Colombia has high potential
for production of renewable energy (e.g., solar,
wind, hydropower, etc.), reason why it could
become one of the main sources of economic
and social growth. The country is committed tosustainable growth and development.3
Due to the importance of natural resourcesand ecosystems for the country’s economy,
climate change has a direct and negative effect.
According to Stockholm International Peace
Research Institute (SIPRI), to avoid increasingclimate change vulnerability, the Colombian
Government and its local and international
partners must collaborate on climate mitigation
and adaptation initiatives.4
Colombia is among the 11 countries withthe greatest vulnerability to the impacts ofclimate change.5 The country’s top climatechange disaster risks are severe floods andmelting glaciers due to rising temperatures. It isestimated that river floods could increase from
25% to 65% between 1980 and 2080.6,7
National mitigation and adaptation policies
have been designed to support the country’s
transition to a low-carbon economy. The
Colombian Government signed and ratified
the Paris Agreement (2015) and submitted its
Nationally Determined Contribution (NDCs)
in 2020, committing to a reduction of 51% of
greenhouse gas (GHG) emissions by 2030.8
Colombia’s long-term goal, stated in the Climate
Action Strategy for 2050 (E2050), is to achievecarbon neutrality.9 The National Climate Change
System (SISCLIMA) was created to support
climate change mitigation and adaptation
strategies.10 The institutional framework
indicates Colombia’s high potential to develop
its sustainable financial market as an effective
tool to support the mobilisation of resources
towards a low-carbon and resilient economy.

Colombia:
Country facts25
Population: 51.5 million (2022)
Total area: 1.1 million Km2 (2020)
Population projection by 2030: 54 million
Urban population: 82% (2020)
GDP: USD314bn (2021)
Trade balance: -USD13.4bn(last update 19 January 2023)
Total debt: USD184bn26 (March 2022)
Fitch rating:
BB+, Stable (December 2022)
S&P rating:
BB+, Stable (January 2023)
Moody’s rating:
BAA2, Stable (October 2021)

Macroeconomic overview
Historically, Colombia has
been characterised byadequate and stable economic
and fiscal management.
Like most countries, the
COVID-19 pandemic has
introduced new socio-economic challenges for
Colombia.11 Sovereign debt increased by 20%
from USD149.2bn in 2021 to USD179.7bn in 2022,
equal to 64.1% of estimated GDP.12

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative

Colombia’s GDP growth and fiscal deficit for2022 are estimated to be 8.2% and 5.5% (of GDP)
respectively. For 2023, GDP growth is expected
between 0.5% and 2%. Low growth is one of themain threats to employment generation, which
will have a negative socio-economic effect on
the country’s finances.13 In Colombia, small andmedium enterprises (SMEs) provide 35% of thecountry’s GDP and 65% of employment but thescale of the borrowing requirement does notmake it economically viable for them to do sothrough the capital markets.14

3

Inflation reached a 21st century record of
13.2% in 2022. In 2023, inflation is expected
to reach between 7% and 7.6%.15 The Central
Bank maintains a long-term inflation target of
3%. Globally, inflation management is a key
challenge, and this extends to Colombia.16
The Colombian peso (COP) depreciated by
20.9% during 2022, one of the highest rates ofdevaluation against the US dollar (USD).17
By the third quarter of 2022, foreign direct
investment (FDI) in Colombia was around
USD13.5bn, mainly in financial services,transport, manufacture, mining, and quarrying
industries.18 According to the World Energy
Council (WEC), Colombia was a leader in theenergy sector transition in LAC by 2020, raising its
position in the Energetic Transition Index from 34
to 29.19 In 2020, the country was ranked second in
LAC (after Uruguay) in terms of capacity to supply
low-carbon energy.20
The Tax Reform approved in November 2022
created the Fund for Sustainability and Climate
Resilience (FONSUREC). The purpose of thisfund is to economically support productive
transformation initiatives, bioeconomy, andtourism. The FONSUREC will be financed partiallywith revenues from the National Carbon Tax
and may receive resources from national orinternational cooperation, donations, or public
and private entities.21
One of the main sources of capital in Colombia
are fossil fuels, which account for approximately
40% of the country’s exports, 20% of FDI and
10%-20% of government revenues. The price of
the Brent barrel increased 10% in 2022, closing
the year at USD85.9.22 The current government’s
position of not renewing new oil and gas
exploration contracts and its plan to halt thesigning of new contracts are very positive from anenvironmental perspective but may present an
economic challenge for the country.

On 20 January 2023, S&P Global Ratings
maintained and confirmed both its risk rating andoutlook (BB+, stable) following the approval of
the tax reform passed by the government. Both
Fitch and S&P Global Ratings granted Colombia
the same rating and outlook. Moody’s rated thelong-term sovereign debt in Colombian foreign
currency as investment grade (Baa2, stable).

Current government(2022-2026)
On 7 August 2022, Gustavo
Petro, founder of theColombia Humana party
and representing thefirst leftist governmentin Colombia’s history,
assumed the presidency.
Petro’s government is focused on social justice,
the Total Peace programme seeks dialogue with
marginalised groups to defuse national conflict.23
The social justice agreement led by thegovernment is part of the National Development
Plan 2023-2026 (PND). It seeks a series ofstructural reforms: social justice reform (taxreform bill approved in November 2022); political
reform and health reform; and a labour andpension reform. As expected, most of this iscreating uncertainty for investors.
By the second half of 2023, reforms shouldhave gone through Congress for discussion.
At that stage, the results should provide aclearer landscape for investors regarding
market conditions. In addition, the government
has an energy transition plan which seeks todecarbonise the economy and diversify thecountry’s energy matrix.

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative

National Development
Plan (PND)
The PND is the country’s development strategy
designed by each new government. The new PND
bill, termed ‘Colombia Global Potential for Life’,
was presented to Congress on 7 February 2023
for approval in May 2023. The objective of thisnational law is to create ‘a new social contractthat promotes the overcoming of historicalinjustices and exclusions, the non-repetition of
conflict, the change of our relationship with theenvironment and a productive transformation
based on knowledge and harmony with nature’.
The construction of the PND was agreed withdiverse national communities including different
ethnic groups. It is based on five transformations:land use planning around water; human security
and social justice; human right to food; productive
transformation; climate action, internationalisation,and regional convergence. The achievementof these objectives is proposed through threetransversal scopes: multiple actors for change,
macroeconomic stability, and total peace.
Within the investment plan proposed in the PND,
there is an alignment with the medium-term fiscal
framework of 2022 which estimates that this plan
will cost an annual COP1.6tn (USD329.5m) during
the four years of the presidency term.24 Additionally,
investments of around COP50.4bn (USD10.4m)
for peace-related programmes are included.
The PND considers 28 lines of investment forthe development projects in specific regions,for which 12 lines have green components e.g.,
biodiversity conservation, adaption projects,
energy transition, construction, transport,
among others. Additionally, the government hasclassified 111 strategic projects with regional
impact, from which 34 have some componentof green finance. This PND may be a source ofpotential projects to feed the sustainable projectpipeline for the country. Nevertheless, Colombia
must try to develop structured and bankableclimate projects.

4Sustainable market overview
Methodology and scopeThis section describes green, social, sustainability
and sustainability-linked (GSS+) debt issued in
Colombia up to December 2022. Each of thethemes included in the report are described in
the following table.
Methodology overview:
This report draws on three Climate Bonds databases:
1. Green Bond Database (GBDB)
2. Social and Sustainability Bond Database (SSBDB)
3. SLB and Transition Bond Database
To qualify for inclusion, debt instruments musthave a label. Green, social, sustainability, andtransition bonds must finance sustainableprojects, activities, or expenditures. SLBs must
annunciate credible and ambitious transition
SPTs. Debt labels describe the types of projects,
activities, or expenditures financed, and/or
their benefits. Green, social, sustainability, andtransition are the most common labels, but abroad range of labels is used (see Appendix 1).

Green bonds
All deals in the green theme havebeen screened to verify the integrityof their green credentials. Screening
is based on a set of process rules
stipulated in the Climate Bonds
GBDB Methodology, including all net proceeds
verifiably (i.e., through public disclosure) meeting
Climate Bonds’ green
definitions stated in Climate Bonds Taxonomy.27,28

Social and sustainability bonds
Social and sustainability (S&S) deals areclassified according to the S&S Bond Database
Methodology, and based on the UoP (which istypically related to the deal’s label) as follows:29
Sustainability: UoP includes a
combination of green and social
projects, activities, or expenditures,e.g., renewable energy, low-carbon
transport, employment generationand gender equality.

Green

SocialSustainability

SLB

UoP instrumentwith dedicatedenvironmental
benefits(captured since 2012)

UoP instrumentwith dedicatedsocial benefits(captured since 2020)

UoP instrument
combining green
and social benefits(captured since 2020)

General purpose
instrument withcoupon step-up/stepdown linked to entitylevel sustainability
performancetargets (SPTs)(captured since 2021)

Sustainability-linked bonds
SLBs raise general purpose financeand involve coupon step-ups or,occasionally, step-downs linked tothe achievement of pre-defined,
time-bound SPTs. Climate Bonds
has developed a screening methodology for SLBs
as transition instruments. This methodology, as
well as the SLB database, are expected to launchin Q2 2023.

Colombia’s sustainablefinance market
Colombia is the seventh largest sustainable debt
market in Latin America and the Caribbean (LAC)
with USD2.4bn issued across the GSS+ spectrum
as of the end of 2022.
The green theme is the most popular by volume
with 16 deals from nine issuers and cumulative
volumes of USD1.3bn, or 53.7% of the country’s
GSS+ market. Cumulative issuance of social andsustainability bonds stands at USD620m (26.3%)
and USD343.2m (14.5%) respectively.

In 2018, the country saw the advent of thesocial label through Bancoldex (USD139m)
to finance SMEs, rural businesses, womenowned enterprises, and armed conflictvictims. The following year, Findeter issued a
COP400m(USD138m) sustainability bond, thecountry’s first (see page 10).
The Colombian GSS+ market is mainly domestic.
Colombia was the first country in LAC to pricea sovereign green bond in its own currency, astrategy known to support local green market
creation (see page 8).

Green dominates Colombian thematic debt
Green bond

SLB

SocialSustainability

600

Social: UoP is exclusively related
to social projects, e.g., health,employment, gender equality,
affordable housing, etc.

500
400
300

USD Millions

Any instrument financing only green projects is
included in the GBDB should it meet eligibility
requirements, irrespective of its label (e.g., an
SDG bond that only finances solar energy). A
sustainability-labelled bond that only finances
social projects will fall under a social theme,
whereas one that finances a combination ofgreen and social would be considered to fallunder the sustainability theme.

The Colombian thematic debt market kicked
off in 2016 with a COP350bn (USD115m) green
bond from Bancolombia. A year later, Davivienda,
another commercial bank, priced a COP433bn(USD149m) green bond to support sustainableprojects among its borrowers. Davivienda
also issued the only USD-denominated deal, a
USD100m social private placement with the IDB
with a seven-year tenor.

200
100
0
2016

2017

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative

2018

2019

2020

2021

2022

Source: Climate Bonds Initiative

5

Green bonds

Green Use of Proceeds by issuer type
EnergyColombia Green Scorecard
LAC Ranking

5th

Cumulative
amount issued

USD1.3bn

Number of entities

8

Number of deals

16

Average size

USD74.6m

Biggest issuer

Republicof Colombia

The Colombian green labelled market is thefifth largest in LAC by issuance volume. The
characteristics of each deal are presented in thetable in the following page.
The Colombian Government is the largest
source of green bonds with 43%, followed byfinancial (35.2%) and non-financial corporates(12.9%). Development banks account for theremaining 8.5%.
Renewable energy (34.7%), Buildings (21.7%),
and Transport (14.5%) are the most funded UoP
categories. Non-financial corporates have issued
green bonds solely related to the energy sector,
while adaptation projects account for 14.3% ofsovereign green bonds.
In the local market, following the region’s
trend, the green bond market has the smallest
average ticket size (USD74.6m) compared toother labels – social (USD351m), sustainability(USD398m) and SLBs (USD850m) – due to thepredominance of social and sustainability debt
from sovereigns and MDBs, and large issuancesamong SLBs.

Buildings

Transport

Water

Waste

Land Use

Adaptation

60%

80%

100%

Sovereign
Non-Financial
Corporate
Financial
Corporate
Development
Bank
0%

20%

40%

Source: Climate Bonds Initiative

Colombian issuers commonly use external
reviews with 58% of issued amounts receiving
SPOs from Vigeo Eiris, including the SPO on thesovereign bonds in 2021 and 2022. Sustainalytics,
or NINT, also follow market best-practices andtheir own methodologies to analyse projects andassets and UoP management. Bancolombia’s
COP350bn (USD115m) private placement from2016, accounting for 9% of the local green
market, received assurance from Deloitte. EPSA´sdeal, representing 2% of the local green market,

Types of external reviewsreceived Climate Bonds Certification under
the Solar Criteria, with pre- and post-issuance
verification by EY. Seven financial and nonfinancial corporate deals (31% of the local green
market) did not obtain external reviews. All green
bonds were issued prior to the launch of theColombian Green Taxonomy.
All green issuances have been placed in
Colombian Pesos with 71% of the issued amounthaving a 5–10-year tenor.

Green bond tenors

Certification 2%

Assurance
9%

SPO
58%

Up to 5Y
22%

10-20Y
7%

No review
31%
5-10Y
71%

Source: Climate Bonds Initiative

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative

Source: Climate Bonds Initiative

6

Green bonds from Colombia
Issuer nameInstrument

AmountissuedIssue date& maturity

Issuer typeUse of proceeds

External
review

Republicof Colombia

Bond

COP645bn(USD156.2m)

29/06/2022
10 years

SovereignNon-conventional energy sources, efficiency, andconnectivity; ecosystem services and biodiversity;
sustainable land use; clean and sustainabletransport; water management, use and sanitation;
low-carbon buildings; waste and circular
economy, management of natural disaster risk.

SPO
Vigeo Eiris

CelsiaColombia

Bond

COP140bn(USD34.8m)

30/11/2021
5 years

Non-financial
corporate

Solar energy projects.

None/undisclosed

Republicof Colombia

Bond

COP661bn(USD175.2m)

27/10/2021
10 years

SovereignNon-conventional energy sources, efficiency, andconnectivity; ecosystem services and biodiversity;
sustainable land use; clean and sustainabletransport; water management, use and sanitation;
low-carbon buildings; waste and circular
economy, management of natural disaster risk.

SPO
Vigeo Eiris

Republicof Colombia

Bond

COP85.5bn(USD22.6m)

10/08/2021
10 years

SovereignNon-conventional energy sources, efficiency, andconnectivity; ecosystem services and biodiversity;
sustainable land use; clean and sustainabletransport; water management, use and sanitation;
low-carbon buildings; waste and circular
economy, management of natural disaster risk.

SPO
Vigeo Eiris

Republicof Colombia

Bond

COP751bn(USD195.5m)

29/09/2021
10 years

SovereignNon-conventional energy sources, efficiency, andconnectivity; ecosystem services and biodiversity;
sustainable land use; clean and sustainabletransport; water management, use and sanitation;
low-carbon buildings; waste and circular
economy, management of natural disaster risk.

SPO
Vigeo Eiris

Banco deBogotá

Bond

COP114bn(USD29.6m)

24/09/2020
9 years

Financialcorporate

Renewable energy; electric transport;
infrastructure; low-carbon buildings; water andwaste; sustainable land use; biodiversity.

Assurance

Banco deBogotá

Bond

COP186bn(USD48.4m)

24/09/2020
9 years

Financialcorporate

Renewable energy; electric transport;
infrastructure; low-carbon buildings; water andwaste; sustainable land use; biodiversity.

Assurance

Interconexión
Eléctrica

Bond

COP160bn(USD43.2m)

13/08/2020
9 years

Non-financial
corporate

Solar and wind energy.

SPO
SITAWI

Interconexión
Eléctrica

Bond

COP140bn(USD37.8m)

13/08/2020
9 years

Non-financial
corporate

Solar and wind energy.

SPO
SITAWI

Patrimonio
Autónomo
Titularización
TMAS-1 (FDN)

Bond

COP132bn(USD41.3m)

02/07/2019
9 years

DevelopmentbankSustainable transport.

SPO
Sustainalytics

Empresa deEnergía delPacífico (EPSA)

Bond

COP140bn(USD48.2m)

23/07/2018
12 yearsNon-financial
corporate

Solar energy.

Certification(EY as Verifier)Bancolombia
S.A.

Bond

COP153bn(USD53.2m)

18/07/2018
5 years

Financialcorporate

Renewable energy and energy efficiency,
low-carbon buildings; clean production andsustainable transport.

None/undisclosed

Bancolombia
S.A.

Bond

COP147bn(USD50.9m)

18/07/2018
5 years

Financialcorporate

Renewable energy and energy efficiency,
low-carbon buildings; clean production andsustainable transport.

None/undisclosed

Bancoldex

Bond

COP200bn(USD66.5m)

09/08/2017
5 years

Developmentbank

Renewable energy and energy efficiency,transport and low-carbon buildings.

SPO
Sustainalytics

Davivienda

Bond

COP433bn(USD149.2m)

25/04/2017
10 yearsFinancialcorporate

Renewable energy andenergy efficiency.

None/undisclosed

Bancolombia
S.A.

Bond

COP350bn(USD115.2m)

05/12/2016
7 years

Financialcorporate

Renewable energy and low-carbon buildings.

Assurance
Deloitte

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative7

Colombia’s first green sovereign bonds

Colombia modelled Germany’s twin bondstructure, whereby a vanilla bond is issued
along with a green bond sharing similar
characteristics. This makes it possible todirectly measure the impact of the greenlabel, with both deals trading inside theirrespective vanilla bonds in the secondary
market (seven to 15 bps). This suggests highinvestor appetite for a large, liquid, COP
instrument bearing the green label.31 65% of
the deal was placed with offshore funds.32
Proceeds from the sale of the bond will be
used to fund a portfolio of 27 expenditures insix categories:
i. Water management, sustainable use,and sanitation – 40%
ii. Clean and sustainable transportation – 27%
iii. Ecosystem services and biodiversity – 16%

20
Greenium (pbs)
15
10
5
0

29
/0
9/
01 21
/1
0/
03 21
/1
0/
05 21
/1
0/
07 21
/1
0/
09 21
/1
0/
11 21
/1
0/
13 21
/1
0/
15 21
/1
0/
17 21
/1
0/
19 21
/1
0/
21 21
/1
0/
23 21
/1
0/
25 21
/1
0/
27 21
/1
0/
21

The COP2.1tn (USD549m) 2031 maturity wasplaced via three auctions. The first clip was
originally COP500bn but upsized to COP750bn
when it received interest of 4.6 times thesize. The two subsequent auctions wereoversubscribed by 1.5 times apiece.

Colombian sovereign green bonds trade inside vanilla twinsin the secondary market

Greenium (pbs)

In September 2021, Colombia became
the first country in the LAC region to pricesovereign green bonds with its debut COPdenominated deal. The deal supported thecountry’s strategic sustainability priorities
to meet environmental impact and risk
management objectives.30

Source: Ministry of Finance and Public Credit

iv. Non-conventional energy sources, energy
efficiency and connectivity – 14%v. Waste and circular economy – 2%
vi. Sustainable, low-emission agricultural
production adapted to climate change – 1%
The six categories reference the United Nations
Sustainable Development Goals (SDGs).33
In August 2022, Colombia’s green financing
framework was updated to reflect the
Colombian Green Taxonomy. Both the
Framework and the taxonomy are consistent
with European practices and the government’s
strategic sustainability priorities.

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative

In 2020, Climate Bonds published theSovereign Green, Social, and Sustainability
Bond Survey based on interviews with 22
issuers of sovereign GSS bonds.34 Issuers
repeatedly remarked that local green market
creation was both a motivation for andoutcome of sovereign GSS bond issuance.
The activity of issuing a thematic deal sends
a signal to the market that the government
is committed to transition, which attracts
crowding in from the private sector.

8

Social bonds

Social Use of Proceeds by issuer type
Employment Training

Education

Affordable infrastructure

Colombia Social Scorecard

Microfinance

Equality

Food security

Social Adaption and Resilence

Local
Government

LAC Ranking

5th

Cumulative
amount issued

USD620.4m

GovernmentBacked Entity

Number of entities

7

Financial
Corporate

Number of deals

13

Average size

USD88.6m

Biggest issuer

Bancoldex

Development
Bank
0%

20%

40%

60%

80%

100%

Source: Climate Bonds Initiative

Considering all the bonds issued in Colombia
until December 2022, the year with the largest
volume of social bonds was 2021, accumulatinga total of USD190.3m. The deals considered arelisted in the table below:

Social bonds in the country have been mainly
issued in COP (13 deals), with only one in USD.
All deals described obtained SPOs. Deals from Banco
W S.A and Bancamía were reviewed by Vigeo Eiris,
while those from the City of Bogotá were reviewed
by Deloitte and from ICETEX by BDO Colombia.

The average ticket size of social bonds in thelocal market is USD88.6m, below the averageof USD351m found in the broader LAC market.
Additionally, social bonds in Colombia are
predominantly shorter tenors with 73% of theamount issued maturing within five years.

Social Bonds
Issuer nameInstrument

Bancoldex

Bond

Bancoldex

AmountissuedIssue date& maturity

Issuer typeUse of proceeds

External review

COP209bn(USD51m)

11/05/2022
3 years

Developmentbank

Employment, microfinance,and equality.

SPO
Sustainalytics

Bond

COP291bn(USD71.1m)

11/05/2022
2 years

Developmentbank

Employment, microfinance,and equality.

SPO
Sustainalytics

MibancoBond

COP112.5bn(USD28.5m)

27/01/2022
3 years

Financialcorporate

Employment, microfinance,and equality.

SPO
Deloitte

ICETEXBond

COP157.4bn(USD40.2m)

15/12/2021
15 years

Governmentbacked entity

Education and equality.

SPO
BDO, Colombia

ICETEXBond

COP38bn(USD9.7m)

15/12/2021
5 years

Governmentbacked entity

Education and equality.

SPO
BDO, Colombia

ICETEXBond

COP97.4bn(USD24.9m)

15/12/2021
5 years

Governmentbacked entity

Education and equality.

SPO
BDO, Colombia

City of Bogotá

Bond

COP103bn(USD25.8m)

02/12/2021
20 years

Local
government

Education and equality.

SPO
Deloitte

City of Bogotá

Bond

COP59.3bn(USD14.9m)

02/12/2021
12 years

Local
government

Education and equality.

SPO
Deloitte

Bancamía S.A.

Bond

COP120.5bn(USD32m)

22/06/2021
2 years

Financialcorporate

Microfinance, food security
and equality.

SPO
Vigeo Eiris

Banco W S.A.

Bond

COP160bn(USD42.8m)

11/02/2021
3 years

Financialcorporate

Employment, microfinance,and equality.

SPO
Vigeo Eiris

Banco W S.A.

Bond

COP150bn(USD40.2m)

09/11/2020
4 years

Financialcorporate

Employment, microfinance,and equality.

SPO
Vigeo Eiris

Davivienda

Bond

USD100m

26/08/2020
7 years

Financialcorporate

Employment, microfinance, affordable
infrastructure, and equality.

SPO
Vigeo Eiris

Bancoldex

Bond

COP400bn(USD139.3m)

24/05/2018
5 years

Developmentbank

Employment, microfinance,and equality.

SPO
Sustainalytics

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative

9

City of Bogotá social bonds
In December 2021, Colombia’s capital city,
Bogotá, became the first city in the LAC region
to issue municipal social bonds. The framework
was prepared under the Social Bonds Principles
of ICMA and received an SPO from Deloitte.
The COP162bn (USD40.6m) deal was placed
through the Colombian Stock Exchange (BVC).
The deal attracted oversubscription of 2.4
times its size and was split between a 12-year(COP103bn/USD25.8m) and 20-year maturity(COP59bn/USD14.8m). It was the first of a fourpart programme from the City of Bogotá.

Sustainability bonds

Colombia Sustainability
Scorecard
LAC Ranking

5th

Cumulative amountissued

USD343.2m

Number of entities

2

Number of deals

2

Average size

USD171.6m

Biggest issuer

Bancolombia
S.A.

The proceeds were earmarked for the
Jóvenes a la U programme, which provides
higher education until 2024 to 20,000 young
Bogotá residents from low and medium-lowincome backgrounds, contributing to SDG 4:
Quality Education.
This programme seeks to increase the number ofhigh school graduates pursuing higher education.
The beneficiaries will receive economic supportof one minimum wage to support their living
during their higher education stage andencourage students to complete their education.

The Colombian market has only two
sustainability bonds and both were issued
in 2019. The first was placed by the national
development bank Findeter for COP400bn(USD138m) and the second by the financial
corporate Bancolombia for COP657bn(USD205.1m) in the modality of private
placement where the IDB Invest subscribed thetotal amount issued. Both deals were placed in
Colombian Pesos and obtained Second Party
Opinions by Vigeo Eiris.
The UoP of both sustainability bonds in the
Colombian market were focused on financing
education, health, affordable infrastructure(social benefits) and energy efficiency, transport,
water and sanitation, and sustainable buildings(environmental benefits).
The Colombian sustainability market has
the potential contribute to a just economictransition. The ability to combine green andsocial UoP into a single instrument could lead tosome larger ticket sizes in a market which has so
far lacked scale.

Bogotá is the capital of Colombia, locatedin the middle of the country, on the easternside of the Andes. The city has 7.7 million
inhabitants (2020) and with a 25.5% shareof the country’s GDP makes a substantial
contribution to commerce, financial andbusiness services in LAC.

Findeter: First sustainability
issuer in Colombia
In mid-2019, Colombian development bankFindeter became the first Colombian issuer
to price sustainability bonds. The COP400bn(USD138m) deal was split between five- andseven-year tenors, and attracted bids over
COP1tn, covering the deal 3.4 times.
Proceeds were earmarked for projects withenvironmental and social impact including
education, health, transport and water, andbasic sanitation, contributing to 10 out of the
17 SDGs.
The IDB provided technical assistancethrough a program from SECO financed by
the Swiss Embassy in Colombia.
The framework was aligned with the ICMA
Green and Social Bond Principles andobtained an SPO from Vigeo Eiris.

Sustainability bonds
Issuer nameInstrument

Bancolombia S.A.

Bond

Amount issued

Issue date& maturity

Issuer typeUse of proceeds

External
review

COP657bn(USD205.1m)

19/07/2019
6 years

Financialcorporate

Green: Energy, buildings, transport, waterand sanitation, waste, and industry.

SPO
Vigeo Eiris

Social: Healthcare, employment,
education, microfinance, food security,
affordable infrastructure, and equality.
Findeter

Bond

COP400bn(USD138.1m)

18/06/2019
10 years

Governmentbacked entity

Green: Energy, buildings, transport, waterand sanitation, waste, and industry.

SPO
Vigeo Eiris

Social: Healthcare, employment,
education, microfinance, affordable
infrastructure, and equality.

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative10

Sustainability-linked
bonds (SLB)

Colombia Sustainabilitylinked Scorecard
LAC Ranking

9th

Cumulative amountissued

USD129.7m

Number of entities

1

Number of deals

1

Average size

USD129.7m

Biggest issuer

Bancolombia
S.A.

SLBs are currently the smallest theme in the
Colombian thematic debt market. As ofthe end of 2022, Bancolombia was the only issuer
to have priced a deal (see below). However,given that Colombia hosts many entities active

SLBs are forward-looking, performance-based
debt instruments issued with progress towards
entity-level key performance indicators (KPIs),e.g., GHG emission reductions, measured bysustainability performance targets (SPTs),e.g., the target reduction by a specific date.
Used credibly and ambitiously, SLBs canbe a powerful transition finance instrument
for issuers to demonstrate to investors theircommitment to their transition plans.
However, issuers and investors should be
mindful of common pitfalls around issuing
credible SLBs: they need to have credible
SPTs, be calibrated in line with 1.5-degree
pathways, and provide meaningful financial
mechanisms and bond structures that holdissuers accountable to their targets.

It should be noted that comparing market
volumes of SLB debt with other thematic debt
is not relevant per se, because SLBs are mostly
general-purpose financing, with unspecified
UoP. At present, issuers without specificprojects, assets, or expenditures can issue
SLBs if they have sustainability targets in place,irrespective of the quality of those targets.
The forthcoming Climate Bonds Standard
v4 will offer non-financial corporate entities
the opportunity to obtain Climate Bonds
Certification for SLBs. The integrity of theStandard and Certification Scheme reassuresinvestors of the ambition and coherence of theperformance targets, together with the delivery
capability of the issuer.

in the hard-to-abate sectors, such as oil and gas,and mining, the SLB market has huge potential
to grow and contribute meaningfully to thecountry’s transition.

SLBs
Issuer nameInstrument

Amount issued

Issue date &maturity

Issuer type

External review

Bancolombia S.A.

Bond

COP640bn(USD129.7m)

25/10/2022
5 years

Financial corporate

SPO
Sustainalytics

SLBs: Bancolombia
Bancolombia is a full-service financial institution
operating in Colombia and Central America
serving more than 25 million customers.
Bancolombia is a seasoned issuer ofsustainability bonds, and in October 2022 priced
its first SLB by a bank in the LAC region. This wasa COP640bn (USD129.4m) deal privately placedwith IDB, IDB Invest, and the LAGreen Fund.
Bancolombia’s sustainability-linked
financing framework is aligned with the ICMA
Sustainability-Linked Bond Principles 2020and obtained an SPO from Sustainalytics.35
The LAGreen Fund Technical AssistanceFacility is providing post-issuance support

to enhance the circular economy agenda andcircularity measuring practices within the bankfor its clients. IDB Invest and LAGreen supported
on the deal structure to identify KPIs and assisted
in the definition of associated SPTs.
Bancolombia’s SLB framework is basedon two KPIs:
KPI 1: Number of unbanked or underserved
individuals given access to credit(contributing to SDG1, and SDG8)

KPI 2: Reduction of financed emissions
intensity (tCO2e/COPm)
The SPT for this KPI is to target the reductionof CO2 financed emissions intensity to 0.0238t
CO2e/COPm with an observation date of 31
December 2025.
Failure to meet either SPT by its observation
date will result in a 25bps coupon step-up forthe remainder of the life of the bond. The bondmatures in 2027.

The SPT for this KPI is to give 1.506.580
unbanked or underserved low-income
individuals access to credit by the observation
date of 31 December 2025.

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative11

Evolution of green finance in Colombia
Key milestones
Since 1994 the Colombian Government andother strategic players, such as regulators,
financial institutions, and the private sector,
have developed climate-related and sustainablefinance initiatives (see below for a summary of

key milestones). Colombia’s public and private
sectors have collaborated to support green andsustainable finance development across thecountry. Integrating sustainable principles into
policy frameworks can help attract a wider poolof investors, especially at an international level.

1994

1996

2012

Law 164 of 1994 approved the United
Nations Framework Convention on
Climate Change (Government of Colombia).

National Climate Change Adaptation Plan
(PNACC) (Government of Colombia).

Creation of the Green Protocol to support
sustainable finance in the banking sector.
Ratified in 2017 and 2022 (Asobancaria).

2018

2017

2016

The National Green Growth Policy wasapproved through CONPES 3934 of 2018
(Government of Colombia).

The PNCC establishes the country’s vision
and action framework for climate change
governance (Government of Colombia).

Decree 289 approved the SISCLIMA whose
objective is to coordinate, articulate,formulate, monitor, and evaluate thepolicies, rules, strategies, plans, programmes,
projects, actions and measures regarding
climate change adaptation and mitigation(Government of Colombia).

The Paris Agreement is approved, throughLaw 1844 (Government of Colombia).

2020

2021

2022

The second version of the NDC waslaunched (Government of Colombia).

Law 2169 on Climate Action establishedgoals and minimum measures for carbon
neutrality and climate resilience to promote
the country’s low-carbon development(Government of Colombia).

Guideline 005 publishes the Colombian
Green Taxonomy (SFC).

Guideline 028 on green bonds includes
a good practices’ guide for the issuanceof green bonds (based on International
Capital Markets Association- ICMA). The
objective is to promote and improve thetransparency and integrity of this market
through the establishment of structuring andreporting standards that must be followed
when green bonds are issued (Financial
Superintendence of Colombia (SFC)).
SFC and Colombia’s Central Bank joined the
Network for Greening the Financial System(NGFS) for Central Banks and Supervisors.

Law 2099 on Energy Transition establishes
measures for promoting energy transition,
revitalization of the energy market andthe economic reactivation of the country(Government of Colombia).
E2050: Colombia’s strategy towards a netzero economy.

Guideline 008 establishes regulation for
SLBs following ICMA’s SLB Principles (SFC).
This standardizes the minimum information
requirements for SLBs, including electionof key indicators, sustainable performance
objectives calibration, bond´s characteristics,
external verification, and the issuer’s reports.
National Climate Finance Strategy (ENFC)
adopted by the DNP.

Guideline 008 for the integration ofEnvironmental, Social and Governance (ESG)
matters in voluntary pension funds (SFC).
Guideline 031 addresses the disclosure of
information on social and environmental
issues including climate matters for market
issuers. The frameworks are stated in the Task
Force on Climate-related Financial Disclosures(TCFD) and the Sustainability AccountingStandards Board (SASB) – (SFC).
SLBs are included in the BVC Guidelines.

NB: For a closer view of the regulatory framework, check Appendix 2.

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative12

Public and private sectors collaborate to drive sustainablefinance in Colombia
Both public and private initiatives havecontributed to the development of sustainablefinance in Colombia.
The government has regulated, createdprogrammes, and designed strategies to strengthen
the country’s sustainable finance market. The
private sector has also played an important rolein developing green finance in the country byfollowing national guidelines, incorporating bestpractices, and joining governmental guidelinesetting. Banks, the BVC and the insurance sector
are among the main stakeholders.
Initiatives between public and private players havebeen supported by the SISCLIMA committee, led
by the National Planning Department (DNP).

Top initiatives from the public
sector and development banks
1. The National Climate
Change Policy (PNCC):
Aims to promote climatechange management that
contributes to moving towards
a climate-resilient, low-carbon
development pathway that reduces climatechange risks.36 It is estimated that between
USD1.8bn and USD2.9bn is required annually
to finance mitigation targets, and between
USD1.2bn and USD2.2bn to meet 30 adaptation
targets. Together with the Climate Change
Law and the Climate Action Law (2018), thisregulation will boost sustainable developmentin the country through the implementation ofactions, principles, instruments, institutions, andinformation systems to meet the funding goals.
2. The Colombian Green Taxonomy: The
first green taxonomy officially launched in Latin
America and a global pioneer. The Financial
Superintendence collaborated with the Ministryof Finance and Public Credit (MHCP) to lead thedevelopment of this tool, published in April 2022.
The purpose of the Colombian Green Taxonomy
is to avoid greenwashing by providing guidelines(based on science) on which economic activities
or assets can be considered green, enhancing
the development of green financial markets.
It is structured to contribute to the following
environmental goals:
a. mitigation and adaptation to climate change
b. water managementc. circular economy
d. pollution prevention and control
e. conservation of ecosystems and biodiversity.
These were selected because of their economic
relevance to the country and their potential
contribution to the environmental goals

previously mentioned. The Colombian Green
Taxonomy priority sectors are buildings, energy,transport, water, industry, waste management,
ICT (information and communication
technologies) and AFOLU (agriculture, forestry,and land use).
Implementation pilots to evaluate the alignmentof financial and non-financial corporate
portfolios to the Colombian Green Taxonomy
have been done by Climate Bonds Initiative,
Ambire Global and Metrix Finanzas to determine
green bond issuance capacity and usability
barriers. To encourage widespread adoption of
the taxonomy, it is necessary to (i) build capacity
to enable potential issuers, intermediaries, andinvestors to use this tool, (ii) develop sectorial
proxies to evaluate the Colombian Green
Taxonomy criteria when technical information
is not available, and (iii) provide incentives for
issuers that align their bond issuance to the
Colombian Green Taxonomy.
3. The Comprehensive Territorial Climate
Change Management Plans (PIGCCT): Law
1931 from 2018 defines PIGCCT as tools throughwhich territorial entities and regional environmental
authorities identify, evaluate, prioritise, and define
measures and actions for mitigation and adaptationof GHG emissions to be implemented differentiallyin the Colombian territory.37 Currently the country
has 24 PIGCCT that are tailored to the characteristics
and needs of each territory.
4. Information management and project
development tools: The Monitoring, Reportingand Verification System (MRV) and the Climate
Finance Corridor have been developed by
the DNP to boost climate finance in the
country. The MRV’s objective is to increase
the effectiveness of climate finance throughinformation management processes that
support the understanding of climate financeflows towards mitigation and adaptation. Also,
the MRV identifies investment gaps to address
climate change.38 In 2021, USD90.4m wasregistered on the platform, especially related
to the areas of renewable energy, AFOLU,
and risk management.39 The Climate FinanceCorridor aims to facilitate access to national andinternational funding for climate action projects
and create a pipeline of sustainable bankableprojects for the country.

Key conclusions of the roadmap:
1. ‘Colombia is designing the necessary policies
and strategies for the transition to a green andlow-carbon economy.’
2. ‘Significant investments of resources are
required to achieve the transformation to a green
and low-carbon economy.’
3. ‘To achieve a well-established and growing
green bond market, it is necessary to develop aseries of instruments and promote dynamics thatremove existing barriers to achieve this objective.’
Additionally, the roadmap set out the following
main steps:
1. Work on capacity building among players in
the market and appropriate disclosure to foster
comprehension of the matter.
2. Set guidelines to define green projects andrelated portfolios.
3. Define and include guidelines on how tomanage raised funds and reporting for investors.
4. Permanently support the development ofgreen portfolios.
5. Establish a green bond data platform.
6. Set guidelines on project monitoring andfollow-up. Identify simple quantitative or
qualitative indicators per project typology.
7. Continue with the development ofinnovative financial instruments complementary
to green bonds.
8. Promote the market of currency swaps, jointlywith financial agents.
9. Create alternative funds to promote theissuance of bonds rated below AA+.
10. Promote the demand of bonds fromthe secondary market, through additional
regulations smoothing existing restrictions on the
management of financial entities’ portfolios.

5. The Green Bond Roadmap: In 2017, theGreen Bond Roadmap was developed tosupport the Colombian Government andespecially the Financial Management Committeeof SISCLIMA. The purpose of the roadmap was
to understand the potential of green bonds
as financing instruments for programmes andprojects that could drive green and sustainablegrowth in Colombia.

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative

13

Current advancesof the roadmap

Top initiatives fromthe private sector

From the initial finding and barriers identified
in the roadmap in 2017, Colombia has
adopted a series of important measures thathave positioned the country as an attractive
market for local and foreign investors. One of
the main achievements is that the Colombian
market has made significant progress inclimate finance by providing the market withgreen assets definition (Colombian Green
Taxonomy) as well as having a clear regulationon the bonds market that provides thetransparency required by investors.42

7. Integration of theColombian, Chilean andPeruvian stock exchanges:
In Q2 2023, the joint venture
for a Regional Holding
composed of the Colombian,Chilean and Peruvian stock exchanges is
expected to launch, being fully operative by2024. Projections estimate that the Regional
Holding will generate income of around
USD81m and net revenues of around USD20m,
with 568 potential issuers. The creation of theRegional Holding seeks to simplify access to theregional capital market, reduce issuance costs,
diversify products and services, and provide
greater financial liquidity for investors.40 One
of the challenges for this integration is thehomologation between the different regulations
and processes of each country.

Main advances that have been madeon the roadmap are:
• Capacity-building efforts from the BVC,
SFC and Asobancaria.
• SFC developing guides of good practices
for the issuance of green bonds.
• The Colombian Green Taxonomy led by
the SFC and the MHCP.
• Development of the green portfolio guidefor banking institutions.
• Issuance of External Circular 031 of 2021of the SFC on ESG and climate disclosurefor issuers.
• Technical assistance on labelledbonds for financial and real economy
market participants.
6. Planning, structuring, and financing
support for the GSS+ market from nationaland multilateral development banks: In 2021,
Bancoldex lent over COP1.3tn (USD321.6m) to projects
classified as green. Bancoldex has issued three social
bonds and one green bond. National developmentbank Findeter has also supported the planning,
structuring, financing, and execution processes ofinfrastructure projects contributing to the sustainablegrowth of different regions of the country.
The IDB has provided structured and integral support
to the government and private issuers in Colombia.
The IDB has helped to develop projects and financial
instruments to enhance social inclusion, economic
development, social equality, environmental
sustainability, climate change mitigation andadaptation practices. Additionally, it has supported
the MHCP to structure green and social bondframeworks. The IDB has also worked with the DNP
and the MADS supporting policies and commitments
to deliver the country’s green finance agenda.
The International Finance Corporation (IFC) has
played an active part in the development ofsustainable finance in Colombia, including thetechnical coordination of the Colombian Green
Taxonomy. It has supported different issuers in the
country to structure financial instruments with anenvironmental and social focus (see Appendix 3).

8. Development of the BVC’s sustainable
portfolio: The BVC aims to provide alternative
investment and financing opportunities in the
Colombian capital markets. The stock exchange
has included guidelines for the listing of thematicbonds, including green, social, sustainability,orange (subset of social) and SLBs.41
9. Creation of the Green Protocol: Led by
Asobancaria, Colombia’s national banking andfinancial institutions association, the protocol
was signed in 2012 and renewed in 2022. To
date, 25 banks have subscribed to the initiative.
The main purpose of the Protocol is to generatea more sustainable financial system throughclimate change management, green products
and services, eco-efficiency, an Environmental
and Social Risk Analysis System (SARAS) andreporting and dissemination strategies.

10. Comparison of green insurance productswith the Colombian Green Taxonomy:
In 2022 and in line with the SFC’s sustainability
strategy framework, Fasecolda (the insurance
sector association) compared green insurance
products with the Colombian Green Taxonomy
and found that 22% of the insurance products
were either ‘directly green’ (the insurance object
is green and contributes to the Colombian
Green Taxonomy’s sectors) or ‘indirectly green’(the insurance object is not completely related
to the Colombian Green Taxonomy sectors or
activities). In a second phase, Climate Bonds
Initiative together with Ambire Global and Metrix
Finanzas, compared insurance products bearing agreen label with the Colombian Green Taxonomy
and 23% of them were in, while 60% had apotential alignment and the rest were not aligned.
11. Technical assistance and capacitybuilding activities from investment funds:
There are multiple green impact investment
funds in Colombia, but the LAGreen Fund is
the only one with a mandate to invest in the
country’s capital market. The fund leverages
its great potential of becoming a leader in thedevelopment of the Latin American thematicbond market. In 2022 the LAGreen Technical
Assistance Facility (TAF) partnered with
Asobancaria and Universidad de los Andes’
Centro de Finanzas Sostenibles (Sustainable
Finance Centre) to provide tailor-made capacitybuilding sessions to financial institutions.
In October 2022, the LAGreen Fund invested
USD19m in an SLB issued by Colombian
financial institution Bancolombia. The TAF
helped Bancolombia strengthen its circular
economy strategy, which was one of the named
areas to be supported by funds raised from thesale of the SLB.

Comparison of green insurance products with the Colombian
Green Taxonomy

1134

Insurance products in Colombia

252

Products classified as “green”

23% of the “green” products aligned with theColombian Green Taxonomy

60% of the “green” products potentially alignedwith the Colombian Green Taxonomy

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative

14

Adaptation and resilience in Colombia
The Intergovernmental Panelon Climate Change (IPCC)
defines adaptation as theprocess taken to adjust to theactual or expected climate andits effects.43 Discussions on
adaptation often advocate taking specific urgent
actions before it is no longer reasonably possible
to adapt to, minimise, or avoid harm fromclimate change. Such measures could include
building sea walls to protect communities against
sea level rise, installing new irrigation systems
to combat water scarcity, or planting trees toreduce air pollution and cool urban areas. Morerarely, adaptation may seek to take advantage ofopportunities that climate change could bring,such as making new crop choices suited to thechanged climate.
Resilience to climate change is defined as thecapacity to prepare for, respond to, and recoverfrom the impacts of hazardous climatic events
while incurring minimal damage to societal
wellbeing, the economy, and the environment.
This entails a range of actions across policy,
infrastructure, services, planning, education,and communication. Building climate resilience
requires a holistic and multi-dimensional
approach to enhance communities’ social,human, natural, physical, and financial capacities
to cope with and recover from the impacts ofclimate change.

Nature-based Solutions
Investing in Nature-based
Solutions (NbS) can
provide cost-effective
and sustainable ways toaddress climate change
adaptation and promote
community resilience, with associated socialand environmental benefits.48 As defined by
the United Nations Environment Assembly,
NbS are actions to manage and utilise natural
ecosystems to address social, economic, andenvironmental challenges while also providing
human well-being, ecosystem services, andbiodiversity benefits.
Colombia’s vast biodiversity can greatly benefit
from projects that improve one or more
aspects of ecosystem functioning. Activities
such as agriculture (including livestock), water,and biodiversity are considered vulnerable.
However, the primary beneficiaries of NbS
strategies are transport and fisheries, classified
as highly vulnerable activities.49

Initiatives such as Cartagena’s Marine Protected
Area (MPA) projects with coral reefs conservation
have demonstrated the importance of theinvolvement of local communities in strategic
ecosystems management to improve theeffectiveness of NbS.50
Regardng urban projects, the Green Corridor
in Medellín, which won the 2019 Ashden
Award for Cooling by Nature Award, is agood example of NbS for urban
environments. Medellín’s city transformed
the verges of 18 roads and 12 waterways intogreen corridors to provide shade to cyclists
and pedestrians, cool built-up areas andclean the air along busy roads. The project
has brought the temperatures down by
more than 2°C on these blocks, reducing theimpact of the heat island effect.51

Scaling up financing for climate adaptation
and resilience (A&R) is urgent, particularly inregions most vulnerable to negative impacts.
As Colombia further develops its thematic debt
market, an enormous investment opportunity
is being presented. The country could integrate
resilience across labelled bond guidelines andpolicies as these are formulated and enhanced.

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative

15

A&R public policies in Colombia
The country has incorporated
A&R considerations into public
policies as a key component
for sustainable development.
The first of these were theAdaptation Fund (2011) andthe National Plan for Adaptation to Climate
Change (PNACC) (2022), introduced in responseto the La Niña weather phenomenon.44
A&R also features in the country’s NDCs andthe National Climate Finance Strategy (ENFC),
prepared by the DNP and updated in 2022. This
indicates that 70% of the costs for adaptation
measures shall be allocated to the housing sector
and emphasises the need to balance efforts
between mitigation and adaptation.45
Despite the advanced institutional agenda
supporting A&R in Colombia, there is a severelack of available projects suitable for inclusion inthematic debt instruments.
A World Bank study from 2021 identified
opportunities to address A&R in Colombia
including:46
i. Revising the current legislation on the
management of coastal zones;iii. Providing financing mechanisms forcommunity investments in adaptation;

A&R in the Colombian
GSS+ market

iv. Facilitating community involvement oncoastal erosion issues and problems related toland use;

Colombia’s adaptation
measures still rely primarily on
public investments; however,these are insufficient to tackle
the impacts of climate change
in the territories due to its highcosts – 30 targets estimated between COP5.8tn
and COP10.5tn (USD1.6bn and USD2.9bn).47
Private and institutional capital will also beneeded to support Colombia’s A&R efforts.

v. Moving beyond awareness-raising, capacitybuilding and planning to actual implementationof appropriate adaptation measures at thewatershed level; andvi. Strengthening planning systems to optimisewater uses across watersheds in the context ofclimate change.
Colombia has progressed its plans for A&R with
the inclusion of adaptation as a key component
in the ENFC, working to close the gaps in the
country. While the World Bank study is recent,it will be interesting to see how these plans will
be further developed in the upcoming years,
considering local practices and international
experiences. Furthermore, the Colombian Green
Taxonomy is committed to further developing
the adaptation objective in greater depth in
the coming months, reflecting the country’s
dedication to addressing the A&R challenges ofclimate change.

ii. Promoting climate-resilient production
systems in agriculture, forestry, and livelihood
sectors to improve competitiveness, income andfood security, especially in vulnerable areas;

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds InitiativeGSS+

At the end of 2022, there were no thematicbonds originating from LAC labelled specificallyas resilience bonds. However, there are bonds
bearing GSS labels with some proceeds allocatedto A&R, including a handful of deals originatingfrom Colombia. One example is the Colombia
sovereign green bond. Its framework provides a
non-exhaustive list of categories where eligible
projects can address A&R:
• Ecosystem services and biodiversity• Sustainable agricultural production, with low
emissions and adapted to climate change• Sustainable buildings adapted to climate change• Waste and circular economy• Management of natural disaster risks
associated with climate change

16

State of the economic sectors addressed in the Colombian
Green Taxonomy
Aware of the need to mobilise capital for green
and sustainable projects, the Colombian
Green Taxonomy considers the sectors that areeconomically relevant to the country and where
there is the greatest need of capital flows tofinance projects. To identify green investment
opportunities in the country, it is important tounderstand the context and state of the sectors
included in the taxonomy and in the PND given
its relevance in the next four years.

EnergyColombia has one of thecleanest electricity matrices
in the region, with 73%
renewables and an emission
factor of 0.126 tCO2eq/MWh
in 2021, largely due to its
high dependence on hydroelectric power.52
However, like in almost all countries, theprojection of electricity demand in the National
Interconnected System is set to increase.
According to the NDP, one of the main national
investment lines is the fair energy transition,
the democratisation of energy generationand consumption and the promotion of clean
energies (green hydrogen, wind, solar, etc.),
as well as the design and implementation ofenergy solutions aimed at the improvement of
infrastructure in non-interconnected zones at
the national level.53 Colombia has a significant
potential to generate energy from renewableenergy sources due to their availability.
More than 150 power generation Colombian
projects are registered at the Mining and Energy
Planning Unit (UPME) with non-conventionalenergy sources.

Energy transition plan
The current administration in Colombia
is working on a transition roadmap to
support and direct the energy transition
towards decarbonisation and diversificationof the energy matrix. The roadmap is set
to be presented in May 2023, and the IDB
has announced a USD70m grant to invest
in infrastructure and technology for theenergy transition policy.90,91 However, theestimated cost of the energy transition is
USD8bn in total for the next eight years
and an alliance between the public andprivate sector will be key to achieving andexecuting energy projects.92 Sustainablefinancial instruments will be fundamental
to obtain resources for transition projects
through the capital markets.

Regarding the natural resources available,
Colombia is a privileged country, which facilitates
future production of low-emission hydrogen.
Therefore, the National Government, throughthe Energy Transition Law 2099 of 2021, has set
a beneficial fiscal framework for investment in
non-conventional energy sources, including the
production of green and blue hydrogen, thus
providing greater certainty to investors.54

therefore crucial. The Colombian legal framework
encourages PPP investments and Decree
438 of 2021 promotes private investments ininfrastructure projects, encouraging foreign
investments to strengthen the PPP approach.
However, it is also vital to ensure that developing
road infrastructure projects, including 4G and
5G roads, avoids damages to ecosystems andensures adaptation to climate change impacts.

Some of the measures the government has
implemented to increase the share of renewables
in its energy mix include the tenders of the
Ministry of Energy involving wind and solar
power, which were allocated with energy
purchase agreements of 15 years.55

Construction

Transport
The transport sector
generates 11% of thecountry’s GHG emissions andthe government is promoting
low- emission transport
by offering incentives suchas income deduction for electric vehicles, VAT
exclusion, exemption from customs duties, andaccelerated depreciation.56,57 Similarly, privatebanks provide green loans to purchase hybrid
and electric cars.
The World Bank has supported several projects
to improve urban public transport in different
Colombian cities, including the construction of
the TransMilenio bus rapid transit system and thefuture Bogotá metro network, which will generate
28,000 jobs and prevent more than 37,500 tonnesof CO2 emissions per year.58
The OECD indicates that some initiatives on
improving micro-mobility regulation in LATAM,
including Colombia, are mainly related to the legal
framework, infrastructure, and data availability.
Regulation should be based on indicators thatreflect the objectives of the mobility policy.59
Micro-mobility companies and governments mustalso develop better information-sharing and datacollection systems.
The LAC region has a significant infrastructure
deficit. In Colombia, an infrastructure investment
of 7% of GDP is needed yearly compared to thecurrent level of 3.6%.60 The NDP Plan, one of
the main national investment lines regardingtransportation, is strengthening rail, air, river, sea,
and land transport infrastructure and systems.61
Climate change can have critical impacts ontransportation infrastructure, such as the 20102011 La Niña phenomenon that damaged about
98 mayor roadways and resulted in an economic
loss of USD1.9bn.62 Investing in climate-resilient
infrastructure – both existing and new – isColombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative

Sustainable construction
will have a role to play ifColombia is to achieve a 45%
GHG emissions reduction
by 2030 and reach zero by
2050, and green bonds andother thematic instruments
can be an effective way to achieve this.63, 64 The
Colombia Sustainable Building Council has
developed a green building rating tool called
CASA Colombia, recognised as a proxy forcompliance with international best practices.
Additionally, the council created the ‘2030
Agenda for Sustainable Construction’ which
aimed to define a roadmap with concrete
actions for the construction sector to achieve
Colombia’s environmental commitments basedin four principles: (i) Reduce and optimise energy
demand; (ii) Generate balance with renewableenergies; (iii) Offset residual emissions; (iv) Planfor deep decarbonisation.65
The building sector accounts for one-thirdof global CO2 emissions, but it also offers an
opportunity to mitigate emissions cost-effectively
while stimulating a low-carbon economic
growth. In Colombia, construction generates 3%of GHG emissions but the sector is expected to
grow 9.8% in 2023, offering significant investment
opportunities in green construction. Around 25%of the total proceeds of Colombian green bonds
have been used for low-carbon construction or
retrofit projects, demonstrating the potential forgreen finance to promote sustainable buildings.66

Manufacturing
The manufacturing sector
plays a critical role in thetransition to a low-carbon
economy and is a significant
contributor to CO2 emissions.
To achieve Colombia’s
environmental commitments
and meet the Paris Agreement targets, it will benecessary to mobilise investments to develop
new technologies and products that make thetransition viable. The manufacturing sector
includes high-emitting activities such as cement,
iron, steel, basic chemical products, and mining.67
17

However, only 19% of the total bank credit
in Colombia was given to the sector in 2021,
highlighting the need for increased investment.
To address emissions associated with mining, theColombian Government has updated the Integrated
Climate Change Management Plan for Mining andEnergy Sector (PIGCCme) to establish guidelines
and actions to achieve carbon neutrality by 2050.68
The Ministry of Environment and Sustainable
Development has also implemented initiatives
such as a unique environmental registry for the
manufacturing sector, an information system toobtain standardised information on the use of
exploitation of renewable natural resources invarious manufacturing activities. 69

Waste
Colombia’s generation of solid
waste and waste products per
capita has been increasing since2015, reaching 536 kilograms
per capita in 2019.70 The Ministryof Housing, City and Territory
is responsible for municipal waste policies andprovides technical support to municipalities.71
Municipalities must have an integrated waste
management plan based on a policy defining theobjectives, goals, programmes, project activities,
and resources for solid waste management.72
Regarding wastewater, the most populous urban
centres in the country experience the highest
rates and harm from contamination. The Ministryof Housing estimates that about COP20tn(USD4.5bn) will be required from 2020-2050 toachieve wastewater treatment in the urban areasof 50 priority municipalities.73

Circular economy
Colombia is showing growing interest intransitioning towards a circular economy,
driven by the government’s recognition of thebenefits of sustainable development.93 The
National Circular Economy Strategy (ENEC)
was launched in 2019 to create a roadmap forthe country’s transition to a circular economy,
with six important flows prioritised for action:i) industrial and fast-moving consumer
goods (FMCG) material, ii) packaging
material, iii) biomass, iv) energy sources, v)
water, and vi) construction material.94
In addition to providing funding forsustainable projects and assets, thematic
debt can encourage the private and public
sectors to adopt more sustainable practices.
As the appeal of sustainable investing
globally grows, the market will see anincreasing number of sustainable financeinitiatives and instruments in Colombia,
including GSS and transition bonds
addressing circular economy activities.

The highest possibility for carbon capture andstorage (CCS) potential in Colombia is in wasteto-energy. Low-cost financing and guarantees are
essential to reduce the cost of capital for viable
and beneficial CCS investments.74
The Colombian Government has been making
efforts to promote a more circular economy.
The National Administrative Department (DANE)
monitors variables such as demand pressure,demand for goods and services, conservation,or loss of value of materials in the production
system, and the pressure on ecosystems
from waste disposal.75 Despite these efforts,
Colombian waste management and circular
economy activities are still in dire need offunding to move Colombia towards a moreenvironmentally responsible economy.

Water
Colombia’s water
infrastructure faces
challenges due to theheterogenous distributionof water resources and thethreats posed by climatechange. The country’s Caribbean region is
expected to face extreme climate change
impacts and the Amazon region may see lower
precipitation levels.76 It is therefore crucial
to continue financing projects that promote
efficient water resource management. The
Ministry of Housing has launched initiatives suchas the Alliance for Resilient Aqueducts, among
others, to ensure that various regions havedisaster risk management plans and identify
alternative water supply sources.77
Additionally, the PND prioritises drinking waterand basic sanitation as key investments areas,
given that more than 3.2 million people lackaccess to adequate drinking water, with the
majority being in rural areas.78
Efficient water supply and sewerage systems
not only promote emissions mitigation throughtheir energy efficiency but also enhance cities’and municipalities’ resilience to climate change.
As Colombia’s water resources face challenges,
continued funding for water management is critical.

Information and Communication
Technologies (ICT)ICT is a necessary tool forenvironmental observation,
weather monitoring andclimate change prediction.79
The growing threats of climatechange have contributed
to the rapid spread of ICT worldwide, creating
opportunities to mitigate GHG emissions andbuild more resilient communities.

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative

The demand for data centres is also increasingin Colombia, keeping pace with the country’s
digital transformation.80 The DNP considers
strengthening the ICT industry as a priority
investment line.81 Statistics from theInternational Monetary Fund show that 3%of the total bank credit in Colombia was allocatedto the sector in 2019.82

Agriculture, Forestry andLand Use (AFOLU)
The agricultural sector
generates a significant portionof Colombia’s GDP. However,the use of substances suchas fertilisers and pesticides
contribute to soil pollution,and there is a need for sustainable practices
to conserve healthy soil.83
The Agricultural Sector Financing Fund
(FINAGRO) is a key source of financing forthe agricultural sector and promotes thedevelopment of the rural sector while stimulating
investment in productive projects. It is importantthat such projects promote the conservationof biodiversity, water, and healthy soil.84 The
Nationally Appropriate Mitigation Action(NAMA) for sustainable cattle farming is a public
policy that aims to reduce GHG emissions
from meat and milk supply chains.85 The
successful implementation of NAMA requires theinvolvement of all relevant actors in the supply
chains, including the financial sector, to offer
options for accessing sustainable capital.86
Forestry land management and conservation
are essential for achieving sustainable
development objectives in Colombia.
Deforestation accounted for almost half of thecountry’s emissions in 2014, mainly driven byland use changes toward pastureland, cropland,
and illegal activities.87 Getting capital to flow
to forestry conservation projects is vital. The
PND considers containing deforestation andimplementing forestry development nuclei
in the Amazon as a priority line of investment
to achieve carbon neutrality and maintainbiodiversity-rich sites.

Other opportunities
looking ahead
The sectors addressed in Colombia’s Green
Taxonomy contain many activities that canbe financed through labelled bonds that aim
to mitigate GHGs while ensuring the ‘do no
significant harm’ principle applies to otherenvironmental objectives (such as pollution
prevention and biodiversity conservation).
The range of thematic debt instruments,
including transition bonds and blue bonds –a subcategory of green bonds – could be
used to achieve more sustainable developmentin Colombia.

18

Blue bonds
Colombia is a country
with a vast and diverse
coastline, which stretches
for over 1,600 miles
along the Caribbean
Sea and the Pacific
Ocean.95 Coastal management in Colombia
faces various challenges, such as sea-levelrise, overfishing, and coastal erosion. The
Colombian Government has developed
several integrated coastal management plansthat seek to address these challenges throughan integrated and coordinated approach thatinvolves multiple actors and addresses the
specific challenges of each coastal region.
Some of these specific plans include: (i)Integrated Management and Development
Plans for the Coastal Environmental Unit;(ii) National Plan for Integrated Coastal
Management; (iii) Integrated Coastal Zone
Management Plans; (iv) Action Plans for
Adaptation to Climate Change on the
Caribbean and Pacific Coast; (v) Fisheries
Management Plans.

Goal 14 of the SDGs recognises current marine
ecosystem challenges. In Latin America, there
has been growing interest in blue bonds tosupport sustainable ocean development
and conservation efforts. The Inter-American
Development Bank has also been involvedin promoting blue bonds in the region and in
2021 IDB Invest became the first blue bondissuer in the region.96 Ecuador and Barbados
have also seen blue bond issuance.
Blue bonds are an innovative option
for financing projects and assets with apositive impact on marine biodiversity andconservation. They can also be used forfinancing coastal management restoration andconservation projects, including areas whereland meets the sea or other water bodies.
Blue bonds are particularly relevant in
Colombia, a country between two oceans, oneof the five nations with greatest marine diversity
in the world, and where this type of instrument
has not been issued to date. Investing in
the conservation and sustainable use of thecountry’s marine resources (as well as coastalmanagement) thus offers immense potential.

Transition bonds are financial
instruments designed tosupport the transformation ofentities and industries towards
more sustainable practices byfinancing activities that are notnecessarily low or zero emission (and therefore
not green), but which have a relevant interim rolein the decarbonisation of various industries.
The transition label can enable the inclusion of amore diverse spectrum of sectors and activities
in the field of sustainable finance. At present,
transitional bonds come mainly from hard-to
abate industries and highly polluting ones, forexample extractive industries such as mining andindustrial sectors like steel, cement, and basic
chemicals, as well as activities related to the
AFOLU sector, in particular livestock farming.
As the market grows and evolves, and to avoid‘transition-washing’, in 2020 Climate Bonds
developed a framework for identifying credible
transitions aligned with the Paris Agreement.88
The framework stipulates five principles for anambitious transition: i) alignment with 1.5-degree
trajectory; ii) goals and pathways established byscience; iii) offsets don’t count; iv) technologicalviability trumps economic competitiveness; andv) action not pledges. This work has been built
on since, with Climate Bonds providing moredetailed and prescriptive guidance, including the2022 release of the Five Hallmarks of a credible
company climate mitigation transition:89• Paris-aligned targets• Robust plans• Implementation action• Internal monitoring• External reporting

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative19

Outlook
By the end of 2022, Climate Bonds had recorded
GSS+ debt originating from Colombia witha cumulative total of USD2.4bn. Green is thedominant theme (53.7%) but there is representationin the social, sustainability, and SLB themes. The
GSS+ market remains small but has the potential
to support Colombia’s objectives to protect its
natural resources and ensure economic resilience.
Climate Bonds identifies seven recommendations
within three pillars to strengthen and extend
Colombia’s GSS+ debt market:• Speed: ensure rapid action• Steer: tilt the whole economy to transition• Simplify: clarify and streamline
sustainable investment
Climate Bonds’ 101 Sustainable Finance Policies
for 1.5°C document includes more details.97

1. Establish green
securitisation/
aggregation facilities98
Establishing an asset-backed
securities (ABS) market in
Colombia will help growthe pipeline of investible projects.99 SMEs
provide 35% of Colombia’s GDP and 65% of
employment.100 Financial aggregation canenable private investment in smaller green
projects. Standardisation of green mortgages
and Real Estate investments could also increase
scalability and facilitate aggregation.
Development finance can be invested in green
aggregation facilities (warehouses/conduit
entities) that can package assets and provide
standards around contracts and loans acceptedfor packaging. Such aggregation facilities can drive
the standardisation of contracts and credibility ofgreen loans by setting out minimum requirements
for green securitisation. Aggregation may need tobe combined with other de-risking mechanisms
such as concessional financing, guarantees andsubsidies to enable private investor participation.

Aggregation mechanisms
opportunity in Colombia
While Colombia’s securitisation market ismostly limited to mortgage-backed securities
across the real estate sector, these instruments
also offer potential to fund renewable energy
and energy efficiency projects. Furthermore,
the establishment of new legal frameworks
to introduce securitisation instruments toother economic sectors could help boost
investments in water infrastructure, urban
mobility, waste, land use and other sectors
where the smaller size of projects prevents
access to capital markets.

2. Scale up
sovereign issuance

5. Provide green
guarantees105

Colombia had priced
USD549.4m of sovereign green
bonds by the end of 2022. In
August 2022, the country’s
Green Bond Financing Framework was updated toalign with the Colombian Green Taxonomy to senda clear signal of endorsement to other issuers.

The MHCP can de-risk green
bond issuance by providing
green sovereign guarantees toissuances compliant with the Colombian Green
Taxonomy. Partial risk guarantees, or ‘wrappers’
offer issuers the government’s credit rating while
liquidity guarantees allow the extension of thedebt tenor. This enables access to institutional
investors and lowers the cost of borrowing,
thereby encouraging private sector green bondissuance over vanilla issuance.

Sovereign GSS+ bonds can establish credibility ina country’s climate commitments and increase
the profile of sustainable projects. This in turncan attract private sector crowding in, multiplying
the available investment capital. A commitment
to cap the percentage of total public debt to
be raised by GSS+ instruments can shift theresources needed to address climate change andboost private sector issuance.
As well as expanding green issuance, the Treasury
could also extend its GSS+ liabilities into otherthematic labels to raise their profile, and provide
benchmark deals for local investors.

3. Dedicated green
bond segment on Stock
Exchange101
The regulator can collaborate
with the stock exchange(BVC) to stablish benefits andfacilities for the issuance of thematic instruments.
Establishing a differentiated and fast track
procedure for the issuance of these instrumentson the BVC may encourage issuers to prefer thesetypes of instruments. For example, the Shanghai
Stock Exchange and Shenzhen Stock Exchange
offer fast tracks for green corporate bonds.102
Such actions promote the thematic debt market
and can be effective for the BVC to establish theadvantages of green products and their public
listing..

4. Encourage national
development banks
to increase blended
finance provision103
The Grupo Bicentenario
Initiative, created by the MHCP
to improve the administration of state companies,
oversees the NDB and can ensure climate action,such as increasing blended finance provision
for green projects (i.e., those aligned with theColombian Green Taxonomy). Blended financeinvolves separating the riskiest portion of a project
into a junior capital tranche that can be purchasedby the public sector, while the less risky seniorcapital is offered to private investors.104

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative

6. Green financesubsidies106
As identified in the Green
Bonds Roadmap, regulationand issuance costs are an
entry barrier to the Colombian sustainablefinance market. Although certification andexternal review costs are a small portion of total
issuance expenditure, subsidies for these could
help scale thematic issuance in the country.
Singapore’s Green and Sustainability-Linked Loan
Grant Scheme, for example, covers the cost ofassessment and verification and up to 60% of thecost of framework development.107
The government can also provide interest rate
subsidies or stamp duty exemptions to green
bond issuance. However, there is a risk ofsubsidy allocation being dominated by large
corporates. Reserving such polices for where it ismost needed, e.g., SMEs, ensures the efficacy ofsuch spending.

7. Expand the Green
Taxonomy to increase thepool of potential issuers
Colombia has not seen GSS+
issuances funding biodiversity
conservation, circular
economy, or hard-to-abate sector transition.
Further development of the Colombian
Green Taxonomy to include more sectors,
activities and objectives will increase the poolof potential GSS+ issuers and help scale themarket. Currently, the taxonomy focuses on GHG
mitigation. Adaptation criteria still need to be
developed. This would both increase issuanceand contribute to the achievement of thecountry’s climate objectives.

20

Appendix 1: Examples of labels in each theme

Green

Sustainability

SocialSLB

Transition

Blue

ESG

Affordable housing

Sustainability-linked

Transition

ClimatePositive impact

Education

ESG-linked

Blue transition

Green

Sustainability

Equality

SDG-linked

Green transition

Green (carbon
neutrality)

Sustainability awareness

GenderSocial impact-linked

Low-carbon transition

Renewable energy

SDG

Healthcare

Social- andsustainability-linked

Solar

Socially responsible
investing (SRI)

SDG housing

Environmental

Sustainable
development

Town revitalisation

Water

Green innovation

Youth

PACE

ImpactEmployment

Sustainability

ImpactSDG
Climate resilience
ImpactColombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative21

Appendix 2: Legal Framework of Climate ChangeStandard/Document

Description

Law 164 of 1994 – National Government

Adoption of the “United Nations Framework Convention on Climate Change”.

Law 629 of 2000 – National Government

Adoption of the Kyoto Protocol to the United Nations Framework
Convention on Climate Change.

Resolution 2733 of 2010 – Ministry of Environment, Housing andTerritorial Development

Procedure for national approval of programmes of activities (PoA)
under the Clean Development Mechanism (CDM) and regulates theauthorisation of lead entities.

Resolution 2734 of 2010 – Ministry of Environment, Housing andTerritorial Development

Procedure for national approval of greenhouse gas emission reduction
projects eligible for the Clean Development Mechanism (CDM).

Conpes 3700 of 2011 – National Planning Department (NDP)

Institutional Strategy for the articulation of policies and actions on
climate change in Colombia.

Law 1523 of 2012 – National Government

National disaster risk management policy and National Disaster Risk
Management System established.

Law 1753 of 2015 – National Government

Formulation and implementation of sectoral plans for adaptation
to climate change and sectoral action plans for mitigation of theColombian Low Carbon Development Strategy. Implementation of the
National Strategy for Reducing Emissions from Deforestation and Forest
Degradation, REDD+, in coordination with other ministries and public
entities and the private sector within the framework of the national
climate change policy.

Decree 298 of 2016 – Ministry of Environment
and Sustainable Development

The organization and operation of the National Climate Change Systemis established, and other provisions are issued.

Law 1819 of 2016 – National Government

Establishes the national carbon tax.

National Climate Change Policy 2017 – National Government andMinistry of Environment and Sustainable Development

The objective is to promote climate change management that
contributes to moving towards a climate-resilient, low-carbon
development pathway that reduces the risks associated with climatechange-related disruptions.

Decree 926 of 2017 – Ministry of Finance and Public Credit

Regulates the national carbon tax and the mechanism of non-causationof the tax.

Law 1844 of 2017 – National Government

Approval of the Paris Agreement adopted on 12 December 2015
in Paris, France.

Law 1931 of 2018 – National Government

Guidelines for the management of Climate Change.

Resolution 1447 of 2018 – Ministry of Environment
and Sustainable Development

Regulates the system of monitoring, reporting and verification of
mitigation actions at the national level.

Decree 446 of 2020 - Ministry of Environment and Sustainable Development

Rules applicable to verification bodies for the reduction of GHGs.

Law 2099 of 2021 – Energy Transition Law – National GovernmentStates the Framework for the energy transition, the revitalisation of theenergy market, and the economic reactivation of the country.

Resolution 1687 of 2021 – Ministry of Finance and Public Credit

States the adoption of the Framework of Sovereign Green Bonds of Colombia.

Law 2169 of 2021 – Climate Action Law – National Government

It sets out the minimum short-, medium- and long-term cross-sectoral
targets and measures required to achieve carbon neutrality, climate
resilience and low-carbon development.

Conpes 4075 of 2022 – National Planning Department (NDP)

States the strategies and processes of energy transition towards
sustainable economic development.

Decree 172 of 2022 – Ministry of Environment
and Sustainable Development

States the creation of the Intersectoral Commission of the Presidential
Cabinet for Climate Action.

Resolution 2063 of 2022 – Ministry of Finance and Public Credit

States the creation of the “Framework of green, social and Sustainable
Sovereign Bonds of Colombia” for the issuance of sovereign green,social, or sustainable bonds in the local market and/or in theinternational capital markets

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative22

Appendix 3: MDB participation in Colombia
MDB

Deal

Participation

IDB

First sustainability bond of a private entity issued by Grupo
Bancolombia in 2019 (COP657bn/USD199.3m).

Subscribed 100% of the issuance.

First orange bond issued by Bancoldex in 2019 of
COP400bn (USD123.1m).

Provided technical support.108

First green sovereign bond in local currency in 2021,
worth COP750bn (USD185.6m).

Provided support in the preparation and adoption of thereference framework for Green Bond Issuance.

Sustainability-linked bond by Grupo Bancolombia in 2022,
worth COP640bn (USD131.8m).

Subscribed 86% of the issuance.109

Sustainability loan in 2022 (USD300m) granted to the
Colombian Government.

Granted by the IDB.

Green bond issued by Bancolombia in 2016
(COP350bn/USD116.7m).

Subscribed 100% of the issuance.

Green bond issued by Davivienda in 2017
(COP433bn/USD144.7m).

Subscribed 100% of the issuance.

Green bond issued by EPSA in 2018 (COP420bn/USD129.2m).

Subscribed 50% of the issuance.

USD140m in credits linked to environmental goals
from CELSIA in 2022.

Granted by the IFC.

USD200m loan form BBVA Colombia in 2022 tosupport Colombia’s green finance.

Granted by the IFC.

IFC

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative

23

Appendix 4: GSS+ debt instruments available in Colombia
Colombian debt instruments suitable for thematic debt financing
Debt instrument

Definition

Local instruments / example

Sovereign bonds

These are debt securities issued bygovernment to raise funds for expenditures,such as refinancing or public projects.

Colombia’s sovereign green bond, issued by
the Ministry of Finance in 2021 (case study above).

Sub-sovereign (municipal/state) bond

The proceeds for these bonds are allocatedto nominated projects and assets within thesponsoring region.

The City of Bogota issued social bonds
in 2021 for USD25m and USD14. Targeting
SDG4, the UoP were earmarked for university
education for low and medium-low-income
young people.

Certificate of Deposit

A ‘certificate of deposit’ is a bank deposit thatcannot be withdrawn until maturity. They
are generally issued by commercial bankswith a specified maturity date, coupon rate,
and payment dates. After issue, certificatesof deposit are tradeable in a similar way tobonds and are often quoted on a yield basis.

Known as CDTs (Certificado de depósito atérmino) in Colombia.

Loans

A loan is a bilateral agreement between
a lender and a borrower. The lender andborrower can be individuals or institutions.
Borrowing costs are pre-agreed, and at theend of the term, the borrower repays thelender the principal amount.

In 2022, the IFC granted a US200m loan
to BBVA, Colombia to support green finance.
The loan supported climate-smart projects inall sectors, including agriculture, housing, andrenewable energy.

Project bondDirect exposure to the project(s) risk, withor without recourse project financing. The
backing assets and the financial returns
receive the credit rating.

In 2019, Colombian energy company Celsia
priced a USD24m green bond to financerenewable energy projects in the country.

Investors directly negotiate thesesecurities. Details of the transaction
often remain confidential.

Bancolombia (2016, USD115m) and
Davivienda (2017, USD149m) both issued
private placements bought in full by the IFC.

Private placements

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative

The bond was Climate Bonds Certified,ensuring that the UoP were earmarked forclimate change mitigation and adaptation.

24

Appendix 5: Stakeholders in the Colombian financial sector
The following list shows the main stakeholders in
the Colombian financial sector that are or could
be involved in the sustainable finance market:

Pension fund administration(AFPs):
Colfondos
PorvenirProtección
Skandia Colombia

Commercial banks:
Bancolombia
Davivienda
Banco de Bogotá
Banco Finandina
BBVA Colombia
Scotiabank Colpatria
Banco de Occidente
Banco PopularBanco AV Villas
Banco Caja Social
Tuya

Investment banks:
Corficolombiana

State financial entities:

Associations:

Bancoldex

Asociación Bancaria y de Entidades
Financieras de Colombia (Asobancaria)

FindeterFinagroBanco Agrario

Microfinance banks:
Banco W
Bancamía
Mibanco Colombia

Governmental institutions:Superintendencia Financiera de Colombia(SFC)
Ministerio de Hacienda y Crédito Público(MHCP)
Ministerio de Ambiente y de Desarrollo
Sostenible (MADS)

Asociación Colombiana de
Administradoras de Fondos de Pensiones
y de Cesantías (Asofondos) Federación de
Aseguradores Colombianos (Fasecolda)

Legal advisors:
Brigard Urrutia
Garrigues
Posse Herrera Ruiz
DLA Piper Martínez Beltrán
Gómez-Pinzón
Baker & McKenzie
Philippi Prietocarrizosa Ferrero DU & Uría
Dentons Cárdenas & Cárdenas

Departamento Nacional de Planeación(DNP)

Private sector:
Bolsa de Valores de Colombia (BVC)
ISA
CelsiaColombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative25

Endnotes
1. Colombia.co. Colombia’s Second Greatest Biodiversity in theWorld. https://www.colombia.co/en/colombia-country/environment/
environment-environment/colombia-second-greatest-biodiversityin-the-world/
2. Instituto de Investigación de Recursos Biológicos Alexandervon Humboldt. Biodiversidad colombiana, número a tener encuenta. http://www.humboldt.org.co/es/boletines-y-comunicados/
item/1087-biodiversidad-colombiana-numero-tener-en-cuenta
3. Respira 2030. Nosotros. https://www.respira2030.gov.co/nosotros/
4. Stockholm International Peace Research Institute (SIPRI) andNorwegian Institute of International Affairs (NUPI). 2022. Colombia:
Arms, Conflict and Development. https://sipri.org/sites/default/files/
NUPI%20SIPRI%20Fact%20Sheet%20Colombia%20Oct_2022.pdf
5. The World Bank. 2022. Not So Magical Realism: A Climate
Stress Test of the Colombian Banking System. https://documents.worldbank.org/en/publication/documents-reports/
documentdetail/957831635911537578/not-so-magical-realism-aclimate-stress-test-of-the-colombian-banking-system
6. The World Bank. 2022. Not So Magical Realism: A Climate
Stress Test of the Colombian Banking System. https://documents.worldbank.org/en/publication/documents-reports/
documentdetail/957831635911537578/not-so-magical-realism-aclimate-stress-test-of-the-colombian-banking-system
7. Climate and Development Knowledge Network (CDKN). 2017.
Climate Risk Country Profile: Colombia. https://reliefweb.int/report/
colombia/climate-risk-country-profile-colombia.
8. Secretaría del Senado de la República de Colombia. Ley 1844de 2017. http://www.secretariasenado.gov.co/senado/basedoc/
ley_1844_2017.html
9. Ministerio de Ambiente y Desarrollo Sostenible. Sistema Nacionalde Cambio Climático (SISCLIMA). https://www.minambiente.
gov.co/cambio-climatico-y-gestion-del-riesgo/sistema-nacionalde-cambio-climatico-sisclima/#:~:text=El%20SISCLIMA%20
est%C3%A1%20conformado%20por,nos%20ayudar%C3%A1%20
a%20adaptarnos%20al
10. Presidencia de la República de Colombia. 2022. Estrategia
Climática de Largo Plazo de Colombia - E2050. https://e2050colombia.com/wp-content/uploads/2022/04/EstrategiaClimatica-de-Largo-Plazo-de-Colombia-E2050.pdf
11. World Bank. 2023. Colombia Overview. https://www.
bancomundial.org/es/country/colombia/overview
12. Investor Relations Colombia. 2022. Sovereign Colombian
Government debt profile. https://www.irc.gov.co/webcenter/portal/
IRCEs
13. OECD. 2022. OECD Economic Surveys: Colombia 2022. https://www.oecd.org/economy/colombia-economic-snapshot/
14. Asociación Nacional de Instituciones Financieras (ANIF). 2023.
Retos y oportunidades de las Pymes. https://www.anif.com.
co/comentarios-economicos-del-dia/retos-y-oportunidadesde-las-pymes/#:~:text=Si%20bien%20m%C3%A1s%20del%20
90,empleo%20y%2035%25%20del%20PIB.
15. Estimated range according to reports from ANDI, Corficolombiana,
BBVA, World Bank, MinHacienda.
16. Banco de la República. 2023. Índice de precios al consumidor(IPC): DATA. https://www.banrep.gov.co/es/estadisticas/indiceprecios-consumidor-ipc
17. Reuters. 2022. Colombia central bank expects GDP to grow
2.8-3% in 2022. https://www.reuters.com/article/colombia-economyidUSL1N33J1BT
18. Banco de la República. 2023. Inversión extranjera directa
en Colombia - Actividad económica. https://totoro.banrep.
gov.co/analytics/saw.dll?Go&Path=%2Fshared%2FSeries%20
Estad%C3%ADsticas_T%2F1.%20Inversi%C3%B3n%20
directa%2F1.1%20Historico%2F1.1.3%20Inversion%20extranjera%20
directa%20en%20Colombia%20-%20Actividad%20economica_
Anual&lang=es&Options=rdf&Action=Prompt
19. World Economic Forum. 2021. Fostering Effective Energy
Transition 2021. https://www.weforum.org/reports/fosteringeffective-energy-transition-2021/in-full/regional-profiles
20. Portafolio. 2021. Colombia, segunda en transición energética
de América Latina. https://www.portafolio.co/economia/colombiasegunda-en-transicion-energetica-de-america-latina-546899
21. Presidencia de la República de Colombia. 2022. Law 2277 of
2022: Por medio de la cual se adopta una reforma tributaria parala igualdad y la justicia social y se dictan otras disposiciones.
https://www.funcionpublica.gov.co/eva/gestornormativo/norma.
php?i=199883
22. MarketWatch. 2021. Oil on track for annual gain in volatile
trading year. https://www.marketwatch.com/story/oil-on-track-forannual-gain-in-volatile-trading-year-11672403810#:~:text=Price%20
action&text=That%20left%20the%20U.S.%20benchmark,a%20
10.5%25%20rise%20in%202022
23. The Total Peace programme became law in November 2022
through Law 418. Ministerio de Interior. 2022. Presidente Gustavo
Petro, sancionó la Ley de la Paz Total. https://www.mininterior.
gov.co/presidente-gustavo-petro-sanciono-la-ley-de-la-paztotal/#:~:text=La%20Ley%20418%20de%20Paz,despeje%20de%20
la%20Fuerza%20P%C3%BAblica.
24. COP1.6tn valued as of 2022.
25. The World Bank. 2023. Colombia. https://data.worldbank.org/
country/CO.https://data.worldbank.org/country/CO
26. Banco de la República. Deuda Externa Colombia. https://www.
banrep.gov.co/sites/default/files/paginas/bdeudax_t.pdf
27. Climate Bonds Initiative. 2022. Green Bond Database Methodology.
Green Bond Database Methodology | Climate Bonds Initiative
28. Climate Bonds Initiative. Climate Bonds Taxonomy. Climate Bonds
Taxonomy | Climate Bonds Initiative
29. Climate Bonds Initiative. Social-sustainability bond databasemethodology. https://www.climatebonds.net/market/socialsustainability-bond-database-methodology

30. These securities were issued under the Colombian Sovereign
Green Bonds Reference Framework, which was adopted by theGovernment under resolution 1687 of 2021
31. Ministry of Finance and Public Credit. 2021. El Gobierno
Nacional lanzará un bono soberano en pesos por $1,5 billones parafinanciar proyectos verdes. https://minhacienda.gov.co/webcenter/
portal/SaladePrensa/pages_DetalleNoticia?documentId=WCC_
CLUSTER-214294
32. Colombian Infrastructure Agency. 2021. Anunciamos la emisiónde bonos verdes por $200.000 millones. https://www.irc.gov.co/
webcenter/ShowProperty?nodeId=%2FConexionContent%2FWCC_
CLUSTER-200712
33. Colombian Infrastructure Agency. 2021. Portafolio de proyectos
verdes financiados con Bonos Verdes. https://www.irc.gov.co/
webcenter/portal/IRCEs/pages_Deuda/bonosverdes/portafolio2021
34. Harrison, C., and Muething, L., Sovereign Green, Social, andSustainability Bond Survey, Climate Bonds Initiative, January 2021.
https://www.climatebonds.net/files/reports/cbi-sovereign-greensocial-sustainability-bond-survey-jan2021.pdf
35. Grupo Bancolombia: Sustainable Linked Bond Framework.
https://www.grupobancolombia.com/wcm/connect/www.
grupobancolombia.com15880/9ce29fd5-a988-412d-80b816d2879539c6/SLB+Framework.pdf?MOD=AJPERES&CVID=ofj5xOz
36. Ministerio de Ambiente y Desarrollo Sostenible. 2022. Política
Nacional de Cambio Climático. https://www.minambiente.gov.co/
wp-content/uploads/2022/01/9.-Politica-Nacional-de-CambioClimatico.pdf
37. Ministerio de Ambiente y Desarrollo Sostenible. Planes
Integrales de Gestión del Cambio Climático Territorial. https://www.
minambiente.gov.co/cambio-climatico-y-gestion-del-riesgo/planesintegrales-de-gestion-del-cambio-climatico-territorial/
38. Departamento Nacional de Planeación. 2017. Sistema deMonitoreo, Revisión y Verificación de Financiamiento Climático.
https://colaboracion.dnp.gov.co/CDT/Ambiente/Finanzas%20del%20
Clima/Sistema%20de%20monitoreo%2C%20revisi%C3%B3n%20
y%20verificaci%C3%B3n%20de%20financiamiento%20
clim%C3%A1tico.pdf
39. Departamento Nacional de Planeación. Financiamiento en
cifras. https://mrv.dnp.gov.co/Financiamiento_en_cifras/Paginas/
sectorfinanciero_cifras.aspx
40. BVC. Integración Regional BCS, GBVl, bvc. https://media.
graphassets.com/nniKuIZBS4SRFuAq7tob
41. Orange bonds: securities issued to finance projects or industries
classified as creative and/ or cultural, based on talent, intellectual
property, connections, and cultural heritage.
42. Franco Cuartas, Fernando. 2022. Characterization of theColombian Capital Market: A Comprehensive Perspective. https://www.researchgate.net/publication/366205724_Characterization_of_the_Colombian_capital_market_A_view_from_the_academia_
Reflexiones_contables_Cucuta_48
43. Intergovernmental Panel on Climate Change (2022). Climate
Change 2022: Impacts, Adaptation and Vulnerability (https://www.
ipcc.ch/report/ar6/wg2/).
44. Ministerio de Ambiente y Desarrollo Sostenible. 2022. Plan
Nacional de Adaptación al Cambio Climático. https://www.
minambiente.gov.co/wp-content/uploads/2022/01/1._Plan_
Nacional_de_Adaptacion_al_Cambio_Climatico.pdf
45. This includes measures on 24 watersheds for water supply, climatechange adaptation for sectoral instruments, water and wastewaterreuse, and others.
46. World Bank. 2021. Colombia Country Profile. https://climateknowledgeportal.worldbank.org/sites/default/files/202107/15520-WB_Colombia%20Country%20Profile-WEB%20%283%29.pdf
47. Departamento Nacional de Planeación. 2016. Estrategia nacionalde financiamiento climático. https://colaboracion.dnp.gov.co/CDT/
Ambiente/Finanzas%20del%20Clima/Estrategia%20nacional%20
de%20financiamiento%20clim%C3%A1tico.pdf
48. Monge-González, M., Larrinaga, A. R., Díaz-Sierra, R., & GarcíaLlorente, M. 2020. Mapping ecosystem services in urban green
infrastructure: A review of supporting tools. Ecosystem Services.
https://doi.org/10.1016/j.ecoser.2020.101242
49. Nature-based Solutions Policy Platform. 2021. Colombia NDC
Factsheet. https://www.nbspolicyplatform.org/countries/colombia/pdf/
50. Kattan, G. H., Alvarez-López, H., Giraldo-Perez, P., & UribeArango, H. 2009. Bird communities of forest fragments in the
Colombian Andes: The effects of landscape context. Biodiversity andConservation. https://doi.org/10.1007/s10531-008-9555-5
51. UNEP. 2019. Medellin Shows How Nature-Based Solutions Can
Keep People and Planet Cool. https://www.unep.org/news-andstories/story/medellin-shows-how-nature-based-solutions-can-keeppeople-and-planet-cool
52. Unidad de Planeación Minero Energética - UPME. 2021. Cálculo
del Factor de Emisión de la Red Nacional Interconectada (SIN) de
Colombia. https://www1.upme.gov.co/siame/Documents/Calculo-FEdel-SIN/Documento_calculo_Cartilla_Factor_de_emision_2021.pdf
53. Plan Nacional de Desarrollo. 2018. https://www.dnp.gov.co/
DNPN/Paginas/Plan-Nacional-de-Desarrollo.aspx
54. Hoja de rut adel hidrógeno en Colombia. https://www.minenergia.
gov.co/static/ruta-hidrogeno/src/document/Hoja%20Ruta%20
Hidrogeno%20Colombia_2810.pdf
55. Climate Transparency Report. 2020. https://www.climatetransparency.org/wp-content/uploads/2021/01/Colombia-CT-2020.pdf
56. Tercera Comunicación Nacional sobre Cambio Climático
de Colombia. 2017. http://www.cambioclimatico.gov.co/3racomunicacion-cambio-climatico
57. Portal Movilidad. 2021. UPME detalla cómo solicitar incentivos
tributarios para vehículos eléctricos y a hidrógeno. https://
portalmovilidad.com/upme-detalla-como-solicitar-incentivostributarios-para-vehiculos-electricos-y-a-hidrogeno/

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative

58. World Bank Blogs. 2018. Lo que Colombia puede enseñarnos sobre
el transporte sostenible. https://blogs.worldbank.org/es/voices/lo-quecolombia-puede-ensenarnos-sobre-el-transporte-sostenible
59. Micromobility Policies for Sustainable Transport. 2021. https://www.itf-oecd.org/sites/default/files/docs/micromobility-policiessustainable-transport-bogota-mexico-city.pdf
60. Hablemos de Sostenibilidad y Cambio Climático. 2021. https://
blogs.iadb.org/sostenibilidad/en/colombia-advances-towardssustainable-infrastructure/
61. Plan Nacional de Desarrollo. 2018. https://www.dnp.gov.co/
DNPN/Paginas/Plan-Nacional-de-Desarrollo.aspx
62. Climate and Development Knowledge Network (CDKN). 2016.
Colombia: Oportunidades y desafíos para la acción climática a nivel
nacional y subnacional. https://cdkn.org/sites/default/files/files/
TALA-0028a-Colombia-Issues-Paper-Final.pdf
63. Summary for Policymakers of OPCC Special Reporton Global
Warming of 1.5°C approved by governments. 2018. https://www.ipcc.
ch/2018/10/08/summary-for-policymakers-of-ipcc-special-report-onglobal-warming-of-1-5c-approved-by-governments/
64. Intergovernmental Panel on Climate Change (IPCC). 2018.
Summary for Policymakers of IPCC Special Report on Global Warmingof 1.5°C approved by governments. https://www.ipcc.ch/2018/10/08/
summary-for-policymakers-of-ipcc-special-report-on-globalwarming-of-1-5c-approved-by-governments/
65. Climate Bonds Initiative. 2020. Green bonds in Latin America andthe Caribbean: State of the market 2020. www.climatebonds.net/files/
reports/cbi_lac_2020_04e.pdf.
66. Climate Bonds Initiative. 2020. Green bonds in Latin America andthe Caribbean: State of the market 2020. www.climatebonds.net/files/
reports/cbi_lac_2020_04e.pdf.
67. Climate Transparency. 2020. Climate Transparency Report 2020:
Colombia. https://www.climate-transparency.org/wp-content/
uploads/2021/01/Colombia-CT-2020.pdf
68. Ministry of Mines and Energy of Colombia. 2018. Long-term Low
Greenhouse Gas Emissions Development Strategy: 2050. https://www.
minenergia.gov.co/documents/6393/PIGCCme_2050_vf.pdf
69. Instituto de Hidrología, Meteorología y Estudios Ambientalesde Colombia. 2021. Registro Único Ambiental para el Sector
Manufacturero. http://www.ideam.gov.co/web/contaminaciony-calidad-ambiental/registro-unico-ambiental-para-el-sectormanufacturero
70. Departamento Administrativo Nacional de Estadística deColombia. 2021. Cuentas Ambientales de Residuos. https://www.
dane.gov.co/files/investigaciones/pib/ambientales/cuentas_
ambientales/cuentas-residuos/Bt-Cuenta-residuos-2019p.
71. Holland Circular Hotspot. 2021. Waste Management Colombia.
https://hollandcircularhotspot.nl/wp content/uploads/2021/04/
Report_Waste_Management_Colombia_20210322.pdf
72. Ministry of Housing, City and Territory of Colombia. 2021. Planesde gestión integral de residuos sólidos. https://www.minvivienda.
gov.co/viceministerio-de-agua-y-saneamiento-basico/gestioninstitucional/gestion-de-residuos-solidos/planes-de-gestion-integralde-residuos-solidos
73. Ministry of Housing, City and Territory of Colombia. 2020. Plan
Nacional de Manejo de Aguas Residuales Municipales (PMAR) 20202050. https://www.minvivienda.gov.co/publicacion/plan-nacional-demanejo-de-aguas-residuales-municipales-pmar-2020-2050
74. PwC Colombia. 2020. Estudio y análisis de las opciones paraaumentar las absorciones de gases de efecto invernadero en el sector
agropecuario colombiano. https://e2050colombia.com/wp-content/
uploads/estudios/EstudioEAnalisisDeLasOpcionesParaAumentarLasAbsorcionesDeGasesDeEfectoInvernadero.pdf
75. DANE. 2021. Sistema de indicadores de economía circular en
Colombia https://www.cepal.org/sites/default/files/presentations/sistema-indicadores-ambientales-sostenibilidad-economia-circulardane-colombia.pdf
76. OECD. 2014. Survey of Water and Climate Change Adaptation in
Colombia. https://www.oecd.org/env/resources/OECD%20(2014)%20
Survey%20of%20Water%20and%20Climate%20Change%20
Adaptation%20--%20Colombia.pdf
77. Ministerio de Vivienda, Ciudad y Territorio. 2020. Alianza por
Acueductos Resilientes, Viceministerio de Agua y Saneamiento Básico.
https://www.minvivienda.gov.co/viceministerio-de-agua-y-saneamientobasico/gestion-institucional/alianza-por-acueductos-resilientes
78. Gobierno de Colombia, Departamento Nacional de Planeación.
2022. Bases del Plan Nacional de Desarrollo 2022-2026. https://colaboracion.dnp.gov.co/CDT/portalDNP/PND-2023/2023-02-06Bases-PND-2023.pdf
79. International Telecommunication Union. 2015. Greening the ICT
Sector and Climate Change Actions. https://www.itu.int/dms_pub/
itu-t/oth/0B/11/T0B1100000A3301PDFS.pdf
80. Ministerio de Hacienda y Crçedito Público. 2022. Taxonomía
Verde. https://www.taxonomiaverde.gov.co/webcenter/portal/
TaxonomaVerde/Descarga-Documentos
81. Gobierno de Colombia, Departamento Nacional de Planeación.
2022. Pan Nacional de Desarrollo. https://www.dnp.gov.co/DNPN/
Paginas/Plan-Nacional-de-Desarrollo.aspx
82. International Monetary Fund. 2022. Colombia Financial System
Stability Assessment. https://www.imf.org/en/Publications/
CR/Issues/2022/04/04/Colombia-Financial-System-StabilityAssessment-516087
83. Food and Agriculture Organization of the United Nations. 2019.
Climate-smart agriculture in Colombia: a review of policies, practices
and future directions. https://www.fao.org/3/y3557s/y3557s11.htm
84. Finagro. Colombia. https://www.finagro.com.co/
85. Corporación Colombiana de Investigación Agropecuaria. 2021.
Reporte NAMA Bovina de Colombia. https://cipav.org.co/wp-content/
uploads/2021/10/Reporte-NAMA-Bovina-de-Colombia.pdf

26

86. Corporación Colombiana de Investigación Agropecuaria. 2021.
Reporte NAMA Bovina de Colombia. https://cipav.org.co/wp-content/
uploads/2021/10/Reporte-NAMA-Bovina-de-Colombia.pdf
87. Climate Transparency. 2020. Climate Transparency Report 2020
on Colombia. https://www.climate-transparency.org/wp-content/
uploads/2021/01/Colombia-CT-2020.pdfhttps://www.climatetransparency.org/wp-content/uploads/2021/01/Colombia-CT-2020.
pdf
88. Climate Bonds Initiative. 2021. Transition Finance: Transforming
Companies and Industry Sectors. https://www.climatebonds.net/
files/reports/cbi_fincredtransitions_final.pdf
89. Climate Bonds Initiative. 2021. Mobilising Green Finance for
Climate Action in Emerging Markets: Scaling Green Bonds. https://www.climatebonds.net/transition-finance-transforming-companies
90. Ministerio de Ambiente y Desarrollo Sostenible. 2021. Gobierno
Petro anuncia cuáles serán los primeros pasos para la construcciónde la hoja de ruta para la transición energética justa en Colombia.
https://www.minambiente.gov.co/cop27/gobierno-petro-anunciacuales-seran-los-primeros-pasos-para-la-construccion-de-lahoja-de-ruta-para-la-transicion-energetica-justa-en-colombia/#:~:text=Son%20tres%20los%20programas%20que,y%20Estallido%20
de%20la%20bioenerg%C3%ADa.
91. La República. 2022. BID destinará US$73,5 millones a Colombia
para la transición energética y la Amazonía. https://www.larepublica.
co/especiales/davos-2023/bid-destinara-us-73-5-millones-acolombia-para-la-transicion-energetica-y-la-amazonia-3525050
92. BluRadio. 2021. Transición energética de Petro costará$8.000 millones: los primeros ocho años y así los conseguirán.
https://www.bluradio.com/economia/transicion-energetica-depetro-costara-8-000-millones-los-primeros-ocho-anos-asi-losconseguiran-rg10#:~:text=El%20Gobierno%20nacional%20estima%20que,tambi%C3%A9n%20en%20la%20inversi%C3%B3n%20privada.
93. ANDI. 2019. Estrategia Nacional de Economía Circular Colombia
2019. https://www.andi.com.co/Uploads/Estrategia%20Nacional%20
de%20EconA%CC%83%C2%B3mia%20Circular-2019%20Final.
pdf_637176135049017259.pdf

94. Gobierno de Colombia. 2019. Estrategia Nacional de Economía
Circular, Ministerio de Ambiente y Desarrollo Sostenible. https://www.minambiente.gov.co/asuntos-ambientales-sectorial-y-urbana/
estrategia-nacional-de-economia-circular/
95. Instituto de Investigaciones Marinas y Costeras – INVEMA.
2017. Informe del Estado de los Ambientes Marinos y Costeros en
Colombia 2017. http://www.invemar.org.co/redcostera1/invemar/
docs/37401%20-%20INFORME%20DEL%20ESTADO%20DE%20
LOS%20AMBIENTES.pdf
96. IDB Invest. 2021. IDB Invest issues first blue bond in Latin America
and the Caribbean. https://idbinvest.org/es/medios-y-prensa/bidinvest-emite-el-primer-bono-azul-en-america-latina-y-el-caribe
97. Burge, L., 2023. 101 sustainable finance policies for 1.5°C.
Climate Bonds Initiative. https://www.climatebonds.net/resources/
reports/101-sustainable-finance-policies-15%C2%B0c-0
98. Burge, L., 2023. 101 sustainable finance policies for 1.5°C.
Climate Bonds Initiative. https://www.climatebonds.net/resources/
reports/101-sustainable-finance-policies-15%C2%B0c-0
99. UNDP and Climate Bonds Initiative. 2022. Linking Global
Finance to Small-Scale Clean Energy; Financial Aggregation forDistributed Renewable Energy in Developing Countries. https://www.
climatebonds.net/resources/reports/linking-global-finance-smallscale-clean-energy
100. ANIF (Asociación Nacional de Instituciones Financieras). 2018.
Retos y oportunidades de las pymes, ANIF Comentarios económicosdel día. https://www.anif.com.co/comentarios-economicos-deldia/retos-y-oportunidades-de-las-pymes/#:~:text=Si%20bien%20
m%C3%A1s%20del%2090,empleo%20y%2035%25%20del%20PIB.
101. Burge, L., 2023. 101 sustainable finance policies for 1.5°C.
Climate Bonds Initiative. https://www.climatebonds.net/resources/
reports/101-sustainable-finance-policies-15%C2%B0c-0
102. Syntao Green Finance and Climate Bonds Initiative. 2017. Studyof China’s Local Government Policy Instruments for Green Bonds.
https://www.climatebonds.net/resources/reports/study-chinas-localgovernment-policy-instruments-green-bonds

Prepared by the Climate Bonds Initiative and Metrix Finanzas

103. Burge, L., 2023. 101 sustainable finance policies for 1.5°C.
Climate Bonds Initiative. https://www.climatebonds.net/resources/
reports/101-sustainable-finance-policies-15%C2%B0c-0
104. Climate Bonds Initiative. 2016. 101 Policy Ideas to Scale-Up Green
Bond Markets: A Guide for Governments, Development Banks andRegulators. https://www.climatebonds.net/files/reports/cbi_101_
policyideas_02b.pdf
105. Burge, L., 2023. 101 sustainable finance policies for 1.5°C.
Climate Bonds Initiative. https://www.climatebonds.net/resources/
reports/101-sustainable-finance-policies-15%C2%B0c-0
106. Burge, L., 2023. 101 sustainable finance policies for 1.5°C.
Climate Bonds Initiative. https://www.climatebonds.net/resources/
reports/101-sustainable-finance-policies-15%C2%B0c-0
107. MAS. 2020. MAS Launches World’s First Grant Scheme to Support
Green and Sustainability-Linked Loans. https://www.mas.gov.sg/
news/media-releases/2020/mas-launches-worlds-first-grant-schemeto-support-green-and-sustainability-linked-loans
108. Departamento Nacional de Planeación. Financiamiento en
cifras. https://mrv.dnp.gov.co/Financiamiento_en_cifras/Paginas/
sectorfinanciero_cifras.aspx
109. Franco Cuartas, Fernando. 2022. Characterization of theColombian Capital Market: A Comprehensive Perspective. https://www.researchgate.net/publication/366205724_Characterization_of_the_Colombian_capital_market_A_view_from_the_academia_
Reflexiones_contables_Cucuta_48

Supported by the Technical Assistance Facility of LAGreen Fund

Authors from Climate Bonds: Andrés Felipe Sánchez, Adelaida Peláez,
Alicia Lerner, Diana Isaza, Iraís Vásquez and Julia Ambrossano
Contributors: Valeria Dagnino and Daniel Costa
Authors from Metrix Finanzas: Yolanda Fadul and Sebastián Echeverry
Suggested citation: Colombia Sustainable Finance State of the Market 2023,
Climate Bonds Initiative, May 2023
Editorial support: Caroline Harrison and Miguel Almeida
Design: Godfrey Design, Joel Milsted© Published by Climate Bonds Initiative, May 2023
www.climatebonds.net

This report was possible due to the donations from theEuropean Union and the German Development Bank and theadvisement from Finance in Motion

Disclaimer: The information contained in this communication does not constitute investment advice in any form, and the Climate Bonds Initiative is not an investment adviser. Any reference to a financial organisation
or debt instrument, or investment product is for information purposes only. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for the content on external
websites. The Climate Bonds Initiative is not endorsing, recommending, or advising on the financial merits or otherwise of any debt instrument or investment product, and no information within this communication
should be taken as such, nor should any information in this communication be relied upon in making any investment decision. Certification under the Climate Bond Standard only reflects the climate attributes of the useof proceeds of a designated debt instrument. It does not reflect the credit worthiness of the selected debt instrument nor its compliance with national or international laws. A decision to invest in anything is solely yours.
The Climate Bonds Initiative accepts no liability of any kind for any investment an individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole
or in part on any information contained within this or any other Climate Bonds Initiative public communication.

Colombia Sustainable Finance State of the Market 2022 Report Climate Bonds Initiative

27