The Ministry of Finance, through the Public Debt Office, announced the update of its 2026 Sustainable Bond Framework. This update incorporates, for the first time within its green categories, sustainable timber construction projects for both housing and public infrastructure.
The Sustainable Bond Framework is a document that establishes the guidelines the Republic commits to follow for the issuance of green, social, and sustainable bonds, as well as the criteria and categories of projects that can be financed through this avenue. Through this type of bond, the country commits to allocating an amount equivalent to that obtained from the issuance to finance eligible green, social, or sustainable projects.
The first framework was published in 2019, enabling Chile's first sovereign green bond issuance, positioning it as the first country in the Americas to use this instrument. Subsequently, in 2020, the framework was updated to incorporate social and sustainable categories, expanding the universe of eligible projects and consolidating Chile's leadership in the development of the thematic bond market. The update presented today continues to strengthen this instrument and deepens Chile's trajectory as a sustainable issuer.
This update is the result of collaborative work with the Ministry of Housing and Urban Planning and had the technical support of the Inter-American Development Bank (IDB), institutions that conducted the necessary analyses to assess the potential environmental impacts associated with these projects.
The Ministry of Housing and Urban Planning indicated that "the inclusion of Sustainable Timber Housing in the Framework is a decisive step to promote the construction of social housing with high environmental standards in Chile. This instrument will allow for the promotion of timber use in housing, the industrialization of the sector, and the modernization of our MSMEs over the next 10 years. Thanks to the joint work with the Ministry of Finance, Corfo, and the IDB, this mechanism not only strengthens energy efficiency and thermal comfort in homes but also accelerates decarbonization and innovation in the construction industry."
The 2026 Framework was reviewed by the Second Party Opinion (SPO) provider S&P, an entity that concluded the document is aligned with the ICMA Green Bond Principles and Social Bond Principles (both 2025), as well as with the same entity's Sustainable Bond Guidelines (2021). Furthermore, regarding the new sustainable timber construction category, the entity assessed this pillar as "Medium Green," indicating that eligible projects would contribute significantly to the transition towards a low-carbon economy.
This published document provides the necessary technical and institutional foundation for the Ministry of Finance to evaluate the execution of future sustainable bond issuances, based on market conditions and the Treasury's financing needs.
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