The Minister of Economy and Finance, Azucena Arbeleche, He assured that the government seeks to meet “the challenge of uniting environmental policy with economic and financial policy,” highlighting initiatives such as the Bond Indexed to Climate Indicators(BIIC), which is added to the sustainable loan of the World Bank.
Arbeleche expressed himself this way when presenting the strategy of Uruguay during the panel “Driving financial innovation to confront climate change”, which was held during the Annual Meetings of the IDB.
In her participation, the head of the MEF highlighted the intention of the Executive to advance in sustainability since 2020 and highlighted that the first milestone occurred with the green bonus, thanks to joint work between its portfolio, the Environment, Industry, Energy and Mining; and that of Livestock, Agriculture and Fishing.
“In October 2022 we issued a bond that not only has a penalty in the interest rate, “But we have a symmetrical rate of step up and step down,” Arbeleche recalled and highlighted that “it was the first time a positive incentive in case of fulfillment of certain goals.”
The minister highlighted that the choice of tying the bonus to the reduction of greenhouse gases and the conservation of native forests “It was taken because it was the way to show the government’s commitment to environmental care.”
“These two indicators are taken from Paris Agreement, but until now they had no consequence. With the internalization of these indicators, they are made financially binding, because Uruguay “You will pay more or less interest rates according to that environmental behavior,” he added.
The importance of sustainable lending from the World Bank
Arbeleche maintained that “Uruguay seeks to be part of this path of ‘walk the talk’, to implement as well as speak” and pointed out the importance of “having loans of multilateral organizations such as the IDB, with incentives for the country that behaves better environmentally.”
“It is not through interest rate, but there is a reduction of capital according to certain goals. It is on the path of differentiating the countries and we believe that it is a very good path,” said the leader about the instrument, whose operational guidelines were recently approved by the organization’s board of directors.
“I believe that these issues of uniting the environmental with the economic not only show the responsibility we have as policy makers with our populations. If the person responsible for economic policy wants more growth and employment For his country, he has no other option than to incorporate the environmental into the economic,” stated Arbeleche.
Source: Ambito
