First certified climate bond for hydropower goes to Costa Rica

Reventazón Hydropower Plant (ICE)

The Costa Rican Electricity Institute (ICE) has become the world’s first hydropower operator to obtain green bond certification using newly released criteria.

The bond will be used to refinance debt acquired for the construction of the Reventazón Hydropower Plant.

The Reventazón plant was built between 2010 and 2016, financed by the Inter-American Development Bank, the International Finance Corporation, the Central American Bank for Economic Integration (CABEI), and the European Investment Bank. 

Screening tool for investments

The Climate Bonds Standard's Hydropower Criteria, developed by the Climate Bonds Initiative (CBI), provide a screening tool for investments in sustainable hydropower projects.

Certification for hydropower has been formally available for issuers of green debt products across all markets since March 2021. 

Eddie Rich, Chief Executive at IHA said: “Well done to ICE on the Reventazón Hydropower Plant receiving the first CBI certificated hydropower climate bond awarded to sustainable hydropower. These challenging hydropower criteria for environmental, social and governance (ESG) performance and carbon emissions are aligned with the newly launched Hydropower Sustainability Standard. 

“The recent San José Declaration on Sustainable Hydropower adopted by hundreds of hydropower stakeholders states that ‘Going forward the only acceptable hydropower is sustainable hydropower’. Projects like Reventazón show the way.”  

The Hydropower Criteria were developed through a CBI Technical Working Group that included representation from the International Hydropower Association (IHA), WWF, among other organisations, which were reviewed by an Industry Working Group and underwent a public consultation process in 2019-2020. 

Adopting best practice

In a statement, Sean Kidney, CEO of the CBI said: “Sustainable Hydropower will be a crucial component in the energy transition. It is part of the suite of clean energy options that will replace coal, oil and gas in global global energy systems. ICE adopting best practice guidance for their issuance under the Climate Bonds Standard marks a world first Certification under these criteria that support the objectives of Paris Agreement and mitigate environmental and social risks upfront.”  

Reventazón supplies clean energy to more than half a million homes, which represents about 12 per cent of Costa Rica’s population. It has an average annual generation of 1,465 gigawatt hours per year (GWh/year). 

In 2019, the project received the IHA Blue Planet Prize, awarded by the International Hydropower Association (IHA), after being independently assessed using the Hydropower Sustainability Assessment Protocol during its construction phase.

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