February 10, 2020 / 6:29 PM / 13 days ago

Solar power developer Faro Energy issues Brazil's first sustainable bond

SAO PAULO (Reuters) - London-based solar power developer Faro Energy has issued Brazil’s first so-called sustainable bond through its unit in Brazil, aiming to finance solar energy and an education project for public school students.

The company last week raised 15 million reais ($3.48 million) to finance solar power projects. A small amount of the proceeds, 100,000 reais, 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 inflation plus 5.45% annually.

Moody’s expects green, social and sustainable bond issuance to jump 24% 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.

Reporting by Carolina Mandl; editing by Grant McCool

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