The arrangers of Banco Internacional's pioneering Ecuadorian blue bond won Environmental Finance's Award for innovation – bond structure (green bond). The International Finance Corporation's Maria Irene Gutierrez and Symbiotics Investments' Daniel Schriber explain their approach

Environmental Finance: This is the third year in a row Symbiotics Investments has won an award for innovation. To what do you attribute your success?

Daniel Schriber, Symbiotics: We attribute this to the flexibility of our unique Luxembourg-based Micro, Small & Medium Enterprises (MSME) Bonds platform, which connects international sustainable bond market investors to financial institutions, including microfinance banks, leasing and factoring providers, as well as companies embracing clean energy solutions.

We consistently keep looking into new and interesting opportunities for our investors and our partners that we can help structure in an innovative, flexible way and in line with their environmental and social objectives. Winning the award for the third time shows that we have established a leading positioning in green, social and sustainable bond issuance for emerging and frontier markets, varying between $5 million and $30 million in size, in a broad range of currencies.

EF: What is your approach to innovation? How do you identify new opportunities and structures and then originate those deals?

DS: Innovation has always been part of Symbiotics' DNA. We launched our bond issuance platform over 12 years ago, when there were very few bond issuances in our markets. As of today, the MSME platform has issued over 200 impact bonds. Our platform is now among the leading issuers of bonds at the Luxembourg Green Exchange, with 50 sustainable bonds issued in three years.

Innovation is also made possible thanks to our close cooperation with partners such as the International Finance Corporation (IFC), where each party brings their specific skills. In the case of this bond, we brought our structuring skills and the benefits of our Luxembourg bond issuance platform. IFC brought the blue bond deal flow.

Maria Irene Gutierrez, IFC: IFC is by nature a standard setter. By creating our Guidelines for Blue Finance, which underpin this bond, we were able to identify new business areas for the mitigation of and adaptation to climate change, giving us the opportunity to offer this financing opportunity to our clients ahead of the market. Last year, we also issued our Biodiversity Finance Guide, which complements the blue finance guidelines and opens up new financing opportunities for our clients.

EF: Do you consult with investors or other market participants first?

DS: We have a wide variety of investors, such as private asset impact funds, development finance institutions and other types of professional investor, which allows us to find an investment solution for each demand. Conversely, we also have supply-driven approaches, where we originate bonds that are interesting to our investors.

MIG: At IFC, we attract partners to invest alongside us as we provide capital to companies in developing countries – a process we call 'mobilisation'. IFC's loan syndications programme is the oldest and largest mobilisation platform for debt investing among multilateral development banks. In the capital markets space, we also play a lead investor role, introducing other co-investors into bond issuances made by our clients, as was the case with Banco Internacional's Blue Bond, in addition to the anchor investor role we have been playing for several years.

EF: What is the secret to working across different local markets and regions?

MIG: IFC is a leader on market creation globally. Being a global institution, there is a natural trend to share success stories as well as lessons learned, and we have a wide network of financial market players. This allows us to be efficient in replicating instruments, reach international markets, involve institutional investors from around the globe, etc. In the case of this Blue Bond, we have created a blue finance market in Ecuador by implementing the Blue Finance Guidelines for the first time. We have already seen a demonstration effect with financial institutions across the region willing to further support the blue economy.

DS: This is where our presence in emerging and frontier markets comes in very handy: we are present, including through local offices and teams, in all markets and regions and are in constant contact with our partners, such as IFC, locally as well.

EF: What is your outlook for green bonds in emerging and frontier markets?

MIG: We are seeing a shift in the use of proceeds of green financing to specific areas such as blue assets, biodiversity and nature-based solutions. For example, based on findings from our recent Blue Finance Market Research, there are huge blue finance opportunities in Ecuador as well as in Brazil, Chile, Colombia, Mexico and Peru, in areas such as aquaculture, water infrastructure, plastics, etc. IFC is working with financial institution clients, partners, other development finance institutions and corporates to develop a global blue economy finance market. Since 2020, IFC has provided more than $1 billion in blue loans and bonds to private sector financial institutions and corporates.

DS: There is the overall tailwind from European investors that seek exposure to impact and sustainable investing, such as green bonds in emerging and frontier markets, especially in Latin and Central American markets, where we have a good offering and a strong footprint. We are perfectly suited to provide these investors with opportunities that they cannot access directly.

Maria Irene Gutierrez is senior investment officer, Financial Institutions Group, Latin America and the Caribbean at the IFC, and Daniel Schriber is head of investments at Symbiotics Investments.

 For more information, see: www.ifc.org