Bolivia Takes Step towards Compliance with Financial Regulations
Approves Guidelines for Green and Sustainable Bonds
In a move aimed at promoting integrity in the development of its bond market, Bolivia’s Financial System Supervisory Authority (ASFI) has approved modifications to the Regulation of the Registry of the Stock Market and Related Regulations. The changes, outlined in Circular 749/2022, introduce guidelines for the issuance of Green Bonds, Social Bonds, and Sustainable Bonds.
Promoting Transparency and Disclosure
According to ASFI, the new regulations aim to promote transparency and disclosure of information, as well as ensure that the funds from these bonds are used exclusively to finance or refinance projects that generate clear and specific environmental and social benefits. The circular establishes definitions and concepts for:
- “Social Bonds”
- “Sustainable Bonds”
- “Green Bonds”
- “Social Projects”
- “Sustainable Projects”
- “Green Projects”
Key Principles
The circular outlines several key principles, including:
- Obligation to Indicate the Destination of Funds: Issuers must describe in detail and quantify how resources will be used.
- Information on Eligible Projects: Issuers must provide information on categories of eligible projects, refinancing of specific projects, and environmental and social benefits.
Eligible Projects
The regulations specify that Green Bonds, Social Bonds, and Sustainable Bonds can only be issued for financing or refinancing projects related to:
- Renewable energy
- Energy efficiency
- Pollution prevention
- Sustainable natural resources management
- Biodiversity conservation
- Other environmentally friendly initiatives
Social activities eligible for funding include:
- Basic services infrastructure
- Access to basic services
- Affordable housing
- Employment generation
- Food safety
- Socioeconomic advances
Exclusive Use of Funds
The funds from these bonds must be used exclusively to finance or refinance new or existing green projects or social projects, with partial or total financing allowed depending on the resource requirement of each project.
For more information, contact: Carla Arellano at carellano@ferrere.com.