On July 11, 2018, Faro Energy announced the issuing of the first Certified Green Bond for solar energy in Brazil. Climate Bonds Certified Green Bonds have been issued in the past for projects including wind energy, but this is the first time a Green Bond will be used to finance solar projects across Brazil. The terms of private placement are confidential. Green Bonds involve the use of debt capital markets to fund projects intended to have positive environmental or climate solutions.
Faro Energy, based in London, is a company that develops and finances distributed solar energy products in emerging markets. The company has offices in Sao Paulo, Barranquilla, and London, and seeks to focus on developing solar activities in these markets. Faro Energy released a press release stating that they believe providing green financing solutions will be critical in fostering the growth of the Brazilian solar market. Sarah Chapman, CEO of Faro Energy, stated that the, “innovative green finance mechanisms [will be] transformational for the the distributed solar sector in Brazil over the coming years.”
In 2018, solar capacity is set to double. Brazil has historically been behind other countries in terms of solar energy production. In the early 2000s, the rapid cost reduction of PV panels allowed for countries to invest in building large solar plants; however, the Brazilian government allotted most of its resources to investing in wind, hydro, and biomass energy solutions. In the beginning of this year, the installed capacity of solar PV reached 1 GW, and is expected to hit 2GW by the end of 2018. This is due to a BRL 4.45 Billion investment and the government’s effort to position Brazil as a leading country in solar energy.
Sean Kidney, CEO of Climate Bonds Initiative, has stated that there is “enormous potential for offshore investment in solar as part of the low carbon energy mix” and praised Faro Energy for taking initiative in this sector.The bond is verified by Bureau Veritas, an international verification agency.
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