BANKs OF THE YEAR awards
BNP Paribas expands sustainable financing
BNP Paribas broadened its already impressive record in Latin America and the Caribbean in 2020 as it responded to the COVID-19 pandemic.
The bank quickly realized that it could be a key ally in the crisis by providing liquidity to help stabilize the markets. It moved just as quickly to work with clients by offering innovative solutions as the pandemic took hold and countries in the region locked down.
This response, as well as its continued role in working on sustainably-linked loans (SLLs), earned it the Sustainable Finance Bank of the Year title for 2020.
“This has really been a milestone year in the sustainability-linked loan space in Latin America and globally. We have been sustainability coordinator on several landmark transactions in the region in 2020,” said Florence Pourchet, head of CIB Latin America.
A marquee was the banks role in the first COVID-19 bond in the region. It was the lead bookrunner for the €700 million, five-year social bond for pandemic response issued by CAF, or the Development Bank of Latin America.
Thanks to the bond, “CAF was able to rapidly deliver much-needed funding support to the health and economic recovery efforts across all of its member countries. The support covered some really critical items, from medical supplies to vaccine research and a number of forms of financial assistance,” said Pourchet.
Pourchet said the CAF bond and other developments in the region has stressed the “S” in environmental, social and corporate governance (ESG).
“The pandemic has highlighted some of the social and economic inequalities in our society, which has driven supranationals and agencies to explore how they can use social bonds to raise capital to fund projects that support the UN Sustainable Development Goals,” she said.
BNP Paribas continued to strengthen its reach in the region’s green financing sector. It worked with Chilean authorities to organize the first green bonds issued by a sovereign, first in May 2019 and again in January 2020. It did the same with CAF’s inaugural green bond transaction in November 2019.
In July 2019 it structured the first sustainable transition bond for Brazil’s Marfrig Global Foods. That same month it participated in the financing of a 190MW solar farm in northern Chile and in January 2020 worked with YPF Luz, a division on Argentina’s state-owned oil company, to finance a 120MW wind farm in the Santa Cruz province.
Pourchet said a change in the financial world would be the pandemic’s silver lining.
“As the crisis began, there was the critical need for banks to provide liquidity and help stabilize the global economy. Now, we are seeing the bigger picture: BNP Paribas and other banks should be using the power of finance to help society and be a lever of change toward a better future for everyone. The capital is there, investor interest is there, and it is a powerful mission,” she said.