The Municipality of Luján de Cuyo, in Mendoza, authorized the issuance of a green bond for up to $1.6 billion to finance a solar park that will supply energy to the Municipal Civic Park.
Mayor Esteban Allasino signed the decree that will allow the construction of this renewable infrastructure over the complex’s parking lot.
The project aims to achieve energy self-sustainability in the municipal dependency with the highest electricity consumption.
According to technical studies, the investment will be recovered in just four years thanks to the savings on electricity bills.
Green bond in solar energy: an investment that pays for itself
The Urban Hygiene Secretariat and the Electromechanical Directorate of the municipality conducted exhaustive analyses justifying the operation.
The data revealed that the solar panel system will have a useful life of 25 years.
The work will consist of roofing the parking lot through the installation of photoelectric cell plates.
This infrastructure will generate clean energy and significantly reduce the municipality’s operating costs.
The decree states that “the Electromechanical Directorate conducted studies on electrical consumption in the various Municipal dependencies due to high billing costs”.
The energy simulation analysis demonstrated the economic viability of the photovoltaic park.
The details of green financing
Luján de Cuyo will use the local capital market with the support of Banco Supervielle as a financial agent.
The debt titles will align with the standards of Green, Social, and Sustainable Bonds (SVS).
The main characteristics of the issuance include:
- Total amount: up to $1,600,000,000
- Maturity term: up to 24 months
- Guarantee: resources from Municipal Revenue Sharing
- Certification: compliance with BYMA (Bolsas y Mercados Argentinos) guidelines
The interest rate will be determined according to the rate for fixed-term deposits of more than $1,000,000.
The placement mechanism will be through public offering via authorized markets.
The official document indicates that “the selection of instruments that best meet the Province’s needs will allow for a quick response to market opportunities”.
Legislative endorsement and complementary services
The Honorable Deliberative Council previously authorized this operation through Ordinance No. 14,830-2024, enacted by Municipal Decree No. 3190/2024.
The regulation specifically allows the issuance of Green Bonds for this work.
Article 25 of the ordinance states: “Authorize the Executive Department to issue Green Bonds for an amount of up to ONE BILLION SIX HUNDRED MILLION PESOS ($1,600,000,000)”.
The contract includes specialized legal advice for $12,000 plus VAT. It also includes credit rating services and a “second opinion” for $25,000 plus VAT.
These services will ensure that the issuance strictly qualifies as a project of positive environmental impact.
Banco Supervielle will charge a commission of 0.15% on the amount effectively placed.
Luján de Cuyo, a provincial leader in clean energies
The Civic Park currently represents the dependency with the highest electricity consumption in the municipality.
Therefore, this initiative positions Luján de Cuyo as a leader in renewable energies within Mendoza.
The municipality not only seeks to relieve public coffers in the face of tariff increases. It also aims to demonstrate that the energy transition is possible at the municipal level with innovative financial instruments.
The project sets a precedent in the use of green bonds for solar energy infrastructure in Argentine local governments.
Now, the experience could be replicated in other municipalities in the country seeking sustainable solutions.
