NEW YORK — IDB Invest issued an AUD50 million, 10-year fixed rate bond, the first so-called “blue bond” in Latin America and the Caribbean, the Interamerican Development Bank announced today in Glasgow, during the United Nations COP26 summit.

Proceeds from the transaction will support projects that contribute to the UN Sustainable Development Goal 6, expanding clean water and sanitation to people in the region, the multilateral lender said in the statement.

“Accelerating the blue economy will be a key driver in transitioning to an inclusive, low-carbon and resilient future,” said IDB President Mauricio Claver-Carone. “With this first blue bond, IDB Group is promoting a groundbreaking approach to financing climate action and attracting new investors to Latin America and the Caribbean.” The inaugural bond lays the groundwork for future blue bonds that finance projects in other industries, such as low-carbon and resilient ports, the circular economy and sustainable tourism.

Blue bonds are uniquely relevant to Latin America, with 25% of its population living on the coast. The Caribbean is home to 23 small and island countries surrounded by coastlines and is more susceptible to the effects of climate change, according to the statement.

The transaction represents the sixth bond issued under IDB Invest’s Sustainable Debt Framework launched this year. To date, IDB Invest has issued USD1.6 billion under the framework, including one sustainability benchmark bond, two social bonds, two green bonds and its first blue bond.