Week 41, 2024 - Latin America

“I don't think limits.” - Usain Bolt (Jamaican runner)

MARKETS

October 10, End Of Day

• Argentina S&P MERVAL Index = 1,782,989.12 (YTD = 91.78%)
• Brazil BOVESPA Index = 130,352.86 (YTD = -2.86%)
• Chile S&P IPSA Chile = 3,563.48 (YTD = 2.77%)
• Colombia MSCI COLCAP = 1,310.14 (YTD = 9.62%)
• Mexico IPC Mexico BMV = 52,391.29 (YTD = -8.70%)
• Peru S&P/BVL Peru = 30,277.16 (YTD = 16.63%)

BUSINESS

Green Bonds: Catalyzing Sustainable Growth in Latin America

As Latin America grapples with the dual challenges of addressing climate change and fostering sustainable development, green bonds have emerged as a powerful tool to mobilize the necessary capital. However, despite the region's immense potential, its share in the global green bond market remains limited.

1. Untapped Potential in Latin America's Green Bond Market

• LatAm requires significant investments, estimated between $470 billion to $1.3 trillion by 2030, to meet climate goals and promote sustainable development.
• The region represents only 2% of the global green bond market, highlighting a significant opportunity for growth.
• Financial Institutions in LatAm have issued only $3.5 billion in green bonds, which is less than 10% of the regional green bond market, showing untapped potential.

2. Leading Countries and Institutions in Green Bond Issuance

• Brazil leads the region in green bond issuances by financial institutions, followed by Mexico and Colombia.
• Key players include major banks such as Itaú Unibanco, Bancolombia, and Banco de Bogotá.
• The focus areas for green bond proceeds in these countries include renewable energy, energy efficiency, and sustainable land use.

3. Financing Needs

• By 2030, LatAm countries need to invest between 10% to 16% of their annual GDP to build the infrastructure to meet the climate goals of the Paris Agreement and promote just transition.
• Lack of adequate financing is a major barrier to private sector initiatives in energy efficiency in Latin America and the Caribbean.

By capitalizing on these opportunities, Latin American countries can not only contribute to global sustainability efforts but also drive economic growth and social development in the region.

Fundraising picks of the week

VREIX: VREIX is a mobile ERP designed for construction companies, addressing industry challenges such as poor control, inefficiency, and outdated information. The platform enables users to record and report data quickly directly from the construction site. Dive deeper into the case here.

Elytron: Utilizing AI and machine learning, Elytron reduces costs, and fosters a deeper understanding of microorganisms, addressing key global challenges efficiently. This innovative approach has diverse applications, such as pest control, fertilization. Dive deeper into the case here.

Ualabee: Ualabee enhances urban mobility by integrating multiple transport operators into a single platform. Serving over 3 million users across 30 cities, their B2B offerings include trip planning and mobility analytics, utilized by clients such as Google and the World Bank. Get to know the case here.

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Dive deeper into other fundraising firms in LatAm here.

CURRENT AFFAIRS

Brazil: Danish drugmaker Novo Nordisk will invest $158.2 million to upgrade its insulin plant in Montes Claros, Brazil, which produces a quarter of the company's global insulin supply. The investment will revamp the facility and implement sustainable projects. The announcement coincided with a meeting between Brazilian President Luiz Inacio Lula da Silva and Denmark's Queen Mary Donaldson.

Argentina: Argentina's government announced measures to streamline trade operations, aiming to boost the peso's exchange rate against the U.S. dollar. These changes will eliminate certain import pricing requirements and a fiscal stamp, increasing exporters' profitability by 1% and slightly reducing importers' profitability. The regulations, led by Minister Federico Sturzenegger, aim to reduce bureaucracy without weakening customs controls.

Ecuador: An investigation into Ecuador's $1.6 billion debt-for-nature swap hasn't slowed similar deals, says the IDB. The IDB expects to finalize swaps with Barbados and the Bahamas soon, converting debt into cheaper loans for environmental projects. The bank is also working on leveraging IMF "special drawing rights" to boost lending and plans to increase support for Haiti following $150 million in grants approved last year.

FURTHER READING

Check our recently published insights here. Recent post:

🌎 Future Outlook of Supply Chain Tech in Latin America

Supply chain technology is transforming logistics in Latin America, driven by digitalization and the need to navigate regional challenges. The integration of advanced technologies like blockchain, IoT, and AI is enhancing efficiency, transparency, and resilience in supply chains from procurement to delivery.

Emerging Trends:

1. 📊 Digital Transformation: Adoption of AI, cloud computing, and robotic automation is streamlining operations and improving decision-making.
2. 📦 E-commerce Growth: As online shopping booms, tech is evolving to improve last-mile delivery and customer satisfaction.
3. 🔗 Blockchain for Transparency: Increasing use of blockchain to ensure traceability and secure transactions across borders.
4. ♻️ Sustainability Focus: Emphasis on tech solutions that support sustainable and ethical supply chain practices.
5. 🤖 Automation and Innovation: Emerging use of autonomous vehicles and drones to enhance delivery efficiency and reduce reliance on manual labor.

🔍 Read more here.