Ecuador has issued the world’s first sovereign social bond where proceeds will be used to provide access to housing.
The $400m issuance is backed by a guarantee from the Inter-American Development Bank for $300m in a bid to make it attractive to international investors and reduce financial costs for Ecuador.
Ecuador, rocked by public protests last year over proposed austerity measures, is under an International Monetary Fund lending programme.
Fernando Quevedo, representative of the IDB in Ecuador, said: “ It is a great satisfaction to support Ecuador in becoming the first sovereign to issue a social bond, especially because these will be aimed at expanding access to homes for those in need of affordable and sustainable housing.
“At the same time, the bonds will help activate the economy, as the resources will be channelled to the construction sector, which has a highly dynamic impact on the economy.”
Bond proceeds will be used to provid…