In a world where sustainable finance are becoming increasingly important, a project aims to structure investments that reduce the environmental impact, in line with the relevance that the Uruguayan government gives to green economy.
Eastern Capital, a corporate finance company, seeks financing for consolidated firms or initiatives and, through different instruments, generates investments with a positive impact on the environmental or social.
Jaime Millerdirector of Capital Oriental, explained in dialogue with Ambit that “many times companies do not have a sophisticated financial department and we present the case to investors and the legal structure of how to make the investment.” “We define whether we make a escrow, if we take private or public debt or if we make a issuance on the stock market, graphic.
Different sustainable finance options
This last tool was the one that the firm uses to launch the company on the market. Zorzal Inversiones Tecnológica SA, that will issue shares via Negotiable Obligations (ON) for a total of 100 million Indexed Units (UI).
However, she was not the only one. “We recently created a fund that lends money to apartment buildings to change their boiler. fuel oil or gas by heat pumps, so that the heating”, Miller noted.
The also former executive director of Uruguay XXI clarified that “the building is not a legal entity and does not have the capacity to go to a bank to request a loan, but it can take private loans like those offered by Capital Oriental.”
“They are going to pay a three-year loan, instead of paying for fuel oil and/or gas. Once completed, they purchased the heat pump and were left with a lower expense. It is an example of sustainable finance, because it gives money to the investor who collects the interest, it serves the building because it saves costs and it serves the environment because it decarbonizes heating,” he said.
A window to improve the carbon footprint in construction
Miller considered the construction as “the worst enemy of the carbon footprint”, arguing that “40% of greenhouse gases They are produced by constructing or heating buildings.” “The best way to build sustainably is not to build. So what we do is re-use an existing, disused building and convert it,” he said.
The director of Capital Oriental highlighted that “the pandemic and the telecommuting did that in Montevideo “Demand per square meter of offices will fall and there are many empty buildings or buildings with very low occupancy that the owners want to get rid of.”
“At this moment, a real estate fund that seeks to reconstruct buildings in the old town of Montevideo and is a business because you buy very cheap and rent with good returns. But it is also environmentally positive because I do not produce new cement and it is socially sustainable because more affordable housing is generated, with which everyone wins,” he highlighted.
On the other hand, Miller highlighted that the country “has a very strong position in terms of sustainability and environmental impact, with a very complete package of investment incentives”, among which he listed the Promoted Housing Law, that “takes away from the investor the income tax generated by rentals for 10 years” and highlighted that “you also have no personal property tax, nor VAT, nor income tax for 10 years.”
Regarding the possibility of investors from other countries betting, he clarified: “The Uruguayan law It does not discriminate whether the investor is foreign or Uruguayan. For example, a Argentinian “You can be the only shareholder or director and you will have the same treatment as if you were Uruguayan.”
Source: Ambito
