Solar Power Developer Faro Energy Issues Brazil’s First “Sustainable” Bond

RIO DE JANEIRO, BRAZIL – The company last week raised R$15 million (US$3.48 million) to finance solar power projects. A small amount of the proceeds, R$100,000, will be used to finance a course aimed at teaching emotional intelligence to 600 students in the city of Pirapora, in the Brazilian state of Minas Gerais.

The 10-year bond will pay investors a return of inflation plus 5.45 percent annually.

Moody’s expects green, social and sustainable bond issuance to jump 24 percent worldwide this year, to $400 billion, as a growing number of investors start to integrate environmental, social and governance metrics to their portfolios.

“Faro could have issued a traditional bond, but we wanted it to bring impact to the region where our solar plants are,” Faro’s Brazilian unit Chief Executive Officer Pedro Mateus said. Projects developed by Faro in Brazil are able to produce 222,000 MWh/year.

Brazilian investment bank Banco BTG Pactual SA sold the bonds to investors, while securitization company GaiaSec has structured the bond.