The Financial System Supervision Authority (ASFI) approved Amendments to the Securities Market Registry Regulations and Related Rules (Circular 749/2022), published in the Financial Regulation Electronic Gazette (GERF). The changes reflect guidelines for issuance of Green Bonds, Social Bonds and Sustainability Bonds implemented by the International Capital Market Association (ICMA) and recommended for promoting integrity in bond market development, as well as transparency and disclosure of information.

Based on ICMA Green Bond Principles, Social Bond Principles and Sustainability Bond Guidelines, Circular 749/2022 establishes and incorporates the definitions and concepts of “Social Bonds,” “Sustainability Bonds,” “Green Bonds,” “Social Projects,” “Sustainability Projects,” and “Green Projects,” including:

  1. Social Bonds: fixed income securities representing a long-term debt obligation contracted by an issuing entity, whose resources will be exclusively applied to finance or refinance new or existing eligible Social Projects;
  2. Sustainability Bonds: fixed income securities representing a long-term debt obligation contracted by an issuing entity, where the proceeds will be exclusively applied to finance or refinance a combination of Green Projects and Social Projects;
  3. Green Bonds: fixed income securities representing a long-term debt obligation contracted by an issuing entity, whose resources will be exclusively applied to finance or refinance new or existing eligible Green Projects.
  4. Social Projects: projects that aim to address or mitigate a specific social issue and/or seek to achieve positive social outcomes especially but not exclusively for a target population;
  5. Sustainability Projects: projects that aim to provide a positive impact on the wellbeing of a particular target population;
  6. Green Projects: projects that aim to provide clear environmental benefits, subject to assessment and quantification.

In line with the current trend in international capital markets and diverse jurisdictions where specific purpose debt instruments are issued, the changes included in Circular 749/2022 aim to make registration, authorization and trading of Green Bonds, Sustainability Bonds and Social Bonds possible in the Bolivian Securities Market. As part of that goal, Circular 749/2022 amends the Securities Market Registry Regulations, the Issue Prospectus Manual, the Rules for Performing External Auditing and the Regulations for Performing External Reviews, to enhance security and confidence of local and foreign investors, under ASFI supervision and oversight.
Noteworthy among the principles for issuing Green Bonds, Sustainability Bonds and Social

Bonds is the obligation to indicate the application of the funds, which must be used in projects providing clear and specific environmental and/or social benefits, which must be described in detail and quantified by the issuer, as follows:

  • the categories of eligible green, social and/or sustainability projects to which funds will be applied;
  • the refinancing of specific projects to which the resources will be allocated;
  • the projects’ environmental and/or social benefits and impacts.

Green, Social and/or Sustainability Bonds can be used exclusively to finance the following types of projects:

  • renewable energies;
  • energy efficiency;
  • pollution prevention and control;
  • sustainable management of natural resources and land use;
  • conservation of biodiversity;
  • clean transport;
  • sustainable management of water and waste water;
  • adaptation to climate change;
  • products adapted to the ecological and circular economy;
  • technologies and production processes.

The following social activities will also be considered:

  • basic services infrastructure;
  • access to basic services;
  • accessible housing;
  • job creation;
  • food security;
  • socioeconomic advances and empowerment.

The total funds deriving from issuance of Green Bonds, Social Bonds and/or Sustainability Bonds must be applied exclusively to financing or refinancing new or existing green projects or social projects, and financing may be partial or total with respect to the resource requirements of each project.