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Fukoku Mutual signs up for IDB sustainable development bond
Japanese insurer is sole investor in US$50 million offering for PPP projects in Latin America
17 Feb 2021 | Michael Marray

The Inter-American Development Bank (IDB) has priced a US$50 million sustainable development bond, with Fukoku Mutual Life Insurance Company as the sole investor. The February 8 deal with Tokyo-based Fukoko Mutual is the IDB’s first SDB private placement in 2021.

Barclays was the lead manager. The 15-year fixed-rate SDBs are rated Triple A by Moody’s and S&P.

The proceeds will support IDB’s strategic priorities to reduce poverty and inequalities in Latin America and the Caribbean. IDB said the offering also raises awareness for the Sustainable Development Goals, including projects promoting climate resilience of forests in areas critical to water supply.

The IDB is helping promote public-private partnerships (PPP) across the region, and in January signed a US$20 million loan for project preparation services in Brazil. The loan has a 25-year term, with a 5.5-year grace period. The Banco Nacional de Desenvolvimento Econômico e Social (BNDES) will provide an additional US$10 million in local counterpart funding.

The programme’s resources will be used to hire consultants, including technical, legal, and financial advisory firms, to help public agencies prepare PPP projects.

Specifically, external consultants’ services will focus on preliminary analyses, complete-cycle PPP project preparation, technical studies, legal advice, financial and operational consultancy, communication counseling, and knowledge dissemination.

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