Santander Chile Issues Green Bond for Green Mortgages

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KnowESG_Santander Chile Issues Green Bond for Green Mortgages
Image courtesy of Santander

Banco Santander Chile has unveiled its inaugural green bond, marking a significant step in its commitment to environmental, social, and governance (ESG) principles.

This groundbreaking green bond, issued under the bank's ESG Framework, is tailored to fund green mortgages, highlighting the institution's dedication to sustainability.

This green bond, privately placed with a Japanese investor and expertly guided by Daiwa Securities Capital Markets, totals JPY 8,000 million, which is equivalent to US$ 53 million, with a two-year maturity and a competitive interest rate of 0.845%.

The primary objective of this issuance is to refinance existing green mortgages and fund new environmentally-friendly mortgage operations. These mortgages are designed for homebuyers who prioritise energy efficiency, offering them preferential rates. Notably, this represents the country's first green bond designed specifically for green mortgages.

The bank's green mortgage portfolio currently stands at approximately Ch$ 86 billion, and it is expected to grow steadily in the coming years as more real estate projects achieve energy efficiency certifications. Presently, 58 real estate developments meet the stringent criteria laid out in Santander Chile's ESG Framework. Many of these projects have received CEV certification, which ranges from A+ to B and is endorsed by the Ministry of Housing and Urban Planning.

Moreover, Banco Santander demonstrates its commitment to environmental conservation by contributing to non-governmental organisations (NGOs) dedicated to preserving Chile's diverse ecosystems. This aligns perfectly with the bank's mission to support its customers in transitioning towards a greener economy while safeguarding the nation's rich biodiversity.

According to Román Blanco, CEO and Country Head of Santander, "Tackling climate change head-on is one of Santander's central goals. This is a global commitment that defines us, and we understand the need to continuously advance towards more responsible business management, in harmony with our planet's protection and the sustainable development of the communities we serve." Blanco also highlighted that "the interest expressed by investors underscores the growing demand for such opportunities, and we hope this instrument will expand both locally and internationally."

Soledad Ramírez, Manager of Santander's Sustainable Finance and Climate Change Office, emphasised that "Pursuing responsible banking means being innovative and exacting in our search for new financing methods that drive the transition towards a greener economy. Having an ESG Framework provides us with the necessary guidelines for conducting operations of this nature."

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