The Dominican government successfully concludes its first green bonds issuance

The funds will be associated to various projects and programs with a direct impact on the environment, social protection, and the development of the country.

Santo Domingo. - The Dominican Government, through the Ministry of Finance, issued green bonds for the first time in its history, an issue that amounted US$750.0 million, achieving a rate of 6.70%, approximately 15 basis points lower than what would have been achieved with other non-thematic instrument with a similar term.

The head of the Ministry of Finance, Jochi Vicente, explained that the resources obtained with this issuance, in addition to implying savings for public finances due to the difference in the cost, will be used for green expenses, eligible under the first Green, Social, and Sustainability Bonds Framework of the country, published last week.

Vicente expressed that the Dominican Republic is one of the most vulnerable countries to the effects of climate change, which is why government investments in projects and programs that contribute to mitigating the phenomenon and its impact on the population and public infrastructures are necessary.

The country's first green bonds received demand from foreign investors in global capital markets, six times higher than the issued amount. This milestone demonstrates confidence in the Government's commitment to environmental protection, social needs, and sustainable development, as well as the solid performance of the Dominican economy.

“Every time we have gone out to the international capital markets, we receive notable support which, among other factors, is a result of the good management we have given to the public debt,” the Minister highlighted.

The Vice Minister of Public Credit, María José Martínez, highlighted that these operations are part of a sustainable issuance program included in the 2024-2028 medium-term debt management strategy that is being executed by the Government. Additionally, they are aligned with the country's goals established in the National Development Strategy 2030.

“The inclusion of thematic bonds in our financing plan, in addition to the environmental and social benefits, is an example of the commitment to transparency in the management of public debt and also diversifies the investor base,” Martínez emphasized.

Likewise, this operation was complemented with a repurchase of US$1,009.0 million of external bonds with maturity in 2025. For this repurchase and to cover part of the financing needs of the General Government Budget for 2024, RD$105,000.0 million of external bonds were issued in local currency amortizing in 2036 and US$500.0 million of a reopening with maturity in 2031.

This has an important effect on the debt portfolio of the non-financial public sector, because it represents a decrease in the percentage of debt in foreign currency and an increase in the average maturity time of the global bond portfolio.

Nonfinancial public sector debt represents the 44.9% of GDP

As of May 31, 2024, the nonfinancial public sector (NFPS) external and domestic debt totaled US$55,755.0 million. This amount represents 44.9% of the estimated GDP.

The 69.6% of the NFPS total debt corresponds to external debt, which presented a balance of US$38,813.1 million, while the remaining 30.4% corresponds to domestic debt, which totaled RD$999,204.6 million, equivalent to US$16,941.9 million, at the exchange rate of RD$/US$=58.9784. These amounts represent 31.2% and 13.6% of the estimated GDP, respectively. Of the total domestic debt, US$2,244.2 million (1.8% of GDP) corresponds to intergovernmental bonds debt issued by the Central Government for the recapitalization of the Central Bank of the Dominican Republic. The intergovernmental debt is that contracted by one government institution with another.

For more details, see the

Public Debt Statistics as of May 31, 2024.

1/ Nominal GDP base 2007, consensus between BCRD, MH and MEPyD according to the latest framework revised in Jun-2024, RD$7,447,461.00 million, (US$124,232.9 million).

Dominican Republic publishes its first Green, Social and Sustainability Bond Framework

Santo Domingo.- The Dominican Government, through the Ministry of Finance, published this Monday the first Green, Social, and Sustainability Bond Framework of the Dominican Republic, aligned with international standards, which will govern the issuance of financial instruments of this type by the public sector.

This milestone underlines the Government's firm commitment to environmental protection, social needs and sustainable development, as well as strict transparency in the use and management of funds.

The document considers among its eligible expenses, the financing of government projects aimed at transforming public transportation, to make it more sustainable and dignified; renewable energies; energy efficiency programs; the development of infrastructure and technologies for solid waste management, and supporting initiatives that ensure the sustainable management and conservation of the country's water resources.

In addition, the framework includes projects and programs on education, health, gender equality, among others, which target households classified in extreme and moderate poverty, as well as children and young people between 14 and 24 years old, farmers and the rural population.

The Minister of Finance, Jochi Vicente, explained that with the design and publication of the framework the Dominican government takes an important step towards a greater and better social and economic development, while diversifying the investor base of the debt portfolio.

“Today we are taking a great step in attracting capital that will allow us to promote areas that are so vital for the development of people such as health, drinking water and sanitation, transportation, among others,” Vicente explained.

Meanwhile, the Vice Minister of Public Credit, María José Martínez, after highlighting the importance of the publication of the document for the country, added that “we are determined to build a greener and more prosperous future for all Dominicans; An example of this is that as an integral part of the Debt Management Strategy we have considered the issuance of thematic bonds, through which we seek to establish a sustainable issuance program.”

This framework has been verified by Standard and Poor's, an independent entity with international reputation, whose technicians have validated that the categories within it are aligned with international standards. This verification reflects the strength of each of the categories considered.

The development of this framework is the result of a joint effort that included the active participation of different public sector institutions, mainly those that make up the Thematic Bond Commission, created by presidential decree and made up of the ministries of Finance; Environment and Natural Resources; Economy, Planning and Development; Energy and Mines; Public Health and Social Assistance; the Social Policies Coordination Cabinet, and the National Institute of Transit and Land Transportation.

After publication, the Government will carry out the first green bonds issuance, which funds will be associated to various eligible expenses considered in the categories reflected in the framework.

See the Green, Social, Sustainability Bond Framework