Uruguay to issue US$1 billion sustainability-linked bonds

RIO DE JANEIRO, BRAZIL – Environment Minister Adrián Peña announced that Uruguay would soon issue sustainability-linked bonds of about US$1 billion, the interest rate of which would depend on the country’s compliance with its environmental goals by 2025.

In statements to the program Quién es Quién on Channel 5 and Diamante FM, Peña said that Uruguay “is trying to position itself as a leader in environmental issues” and in this sense, the bond “will be issued with an interest rate linked to the fulfillment of the environmental or climate targets that Uruguay has adopted.”

He added that “if the country meets this target, it will be able to benefit from an improvement in the interest rate.” The Ministry of Economy and Finance (MEF) has already announced that it plans to issue a sustainable bond this year.

If Uruguay is not the first country to issue a sustainable bond, it will be one of the first,” he said.

In addition, he pointed out that the improvement in the interest rate will be beneficial for investors. “There are investments that want this, and they will pressure the government to comply,” he said.

SOLVING GARBAGE PROBLEMS IN MONTEVIDEO AND CANELONES

Peña informed that the Ministry of Environment (MA) is close to finding a solution for “at least half of the garbage in Montevideo and Canelones.” He added that the same applies to the conversion of this garbage into methanol.

“Ships and airplanes are big CO2 emitters because they use oil, which is a fossil fuel, and they should stop doing that, but hydrogen is not yet available, so there is a transition fuel, which is methanol, which can be produced in many ways, and one of them is with garbage,” he explained.

The minister pointed out that investors are emerging for “unbound Latin American” waste. In this sense, together with the municipalities of Montevideo and Canelones, they are in negotiations with an investor that would sell methanol to an international shipping company.

“This shipping company would buy the methanol produced in the plant. The municipalities supply the waste at a lower price than what they pay for disposal, the company processes it, produces methanol, sells it, and does its business with the shipping company,” Peña explained, pointing out that 50% of the waste produced in Montevideo and Canelones would reach.

Peña said that the authority was “close to a feasibility study” and that the plant would be built at the Felipe Cardoso landfill.

With information from El Obeservador