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The finance ministry said Chile issued the world's first Sovereign sustainability linked bond that boosts climate targets. The $ 2 billion sustainability-linked bond was issued at the start of March, carrying a 4.34% rate or 200 basis points above the 20-year U.S. Treasury notes.

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The bond has been issued in line with the Paris Agreement on climate change, which helps the country tackle carbon emissions and emit no more than 95 metric tons of carbon dioxide by 2030 and 60% of electricity production from renewable energy sources by 2032.

Chile, in the Americas, is the first country to issue a green bond in 2019. According to Leisa Souza, head of Latin American at non-profit organization Climate Bonds initiative, Chile is the only country in the world to have green, social and sustainability-linked bonds.

Bonds are financial instruments designed to provide incentives to achieve climate change objectives by the issuer, which are then measured through several performance indicators. "Sustainability-linked bonds are the fastest-growing type of environmental bonds.", said Anne Van Riel, head of sustainable finance for the Americas at BNP Paribas SA told S&P Global Market Intelligence.

In 2019, Latin American green bond issuances totalled 46, with Chile accounting for the majority of them. In 2020 and 2021, sovereigns issued fewer green bonds and more social and sustainability bonds as governments concentrated on concerns related to the COVID-19 pandemic, according to Souza.