videoType

dynamic-media

videoDmUrl

keyFrameImage

videoDescription

Uruguay has secured a historic $350 million performance-linked loan from the World Bank Group, marking a major milestone in global sustainable finance. This first-of-its-kind financial instrument directly links the country's cost of borrowing to its environmental success, offering an interest rate reduction of up to 100 basis points if targets to reduce livestock methane emissions are met. Developed through a collaborative effort between the World Bank Group and Uruguay's Ministries of Finance, Environment, and Livestock, this innovative strategy demonstrates how nations can balance agricultural economic growth with aggressive climate action.

timestamp

• 00:00 - 00:06: In the heart of South America, Uruguay is writing a new chapter in sustainable development (0:00).
• 00:00 - 00:16: As one of the world's top beef exporters, Uruguay faces a unique challenge balancing economic growth with climate action (0:06).
• 00:00 - 00:27: The government of Uruguay took a very strategic decision in mainstreaming climate and nature considerations into our economic policy (0:16).
• 00:00 - 00:35: So, aligned with this vision, we introduced in our funding strategy the idea that the cost of borrowing should be linked with the environmental performance that we had (0:27).
• 00:00 - 00:42: The bank and Uruguay came together and saw that there were ways of incentivizing greater targets to reduce methane in the production of cattle, which is a major issue under the climate change convention (0:35).
• 00:00 - 00:50: In 2024, Uruguay secured a $350 million loan from the World Bank—a performance-linked loan (0:42).
• 00:01 - 01:09: This is the first-ever World Bank loan that provides direct financial incentives to a country that is willing and committed to meet its environmental goals (0:51).
• 00:01 - 01:17: Under this pioneering loan, the interest rate paid on this credit will be reduced by up to 100 basis points if Uruguay is able to reduce the intensity of its methane emissions in livestock production (1:09).
• 00:01 - 01:27: The country could save up to $12.5 million (1:17).
• 00:01 - 01:40: The interest rate buy-down will be assessed continually on a yearly frequency to incentivize the country to attain its environmental goals on sustainable livestock production throughout the maturity of the World Bank loan (1:27).
• 00:01 - 01:51: In the design of this loan, the Ministry of Economy and Finance, the Ministry of Environment, and the Ministry of Livestock worked hand in hand (1:40).
• 00:01 - 01:57: And it was also crucial the work that we did with the World Bank's technical teams in order to put forward this idea (1:57).
• 00:02 - 02:13: If Uruguay meets its ambitious goals, it will receive interest rate reductions, and this came about through a transformative collaboration with the World Bank (2:05).
• 00:02 - 02:23: In which I chose a new approach to using concessional funding in well-designed financial instruments to incentivize countries to provide global public goods (2:13).
• 00:02 - 02:35: For over 15 years, Uruguay and the World Bank have partnered closely to develop new financial instruments (2:23).
• 00:02 - 02:44: We value this legacy of financial innovation (2:35).
• 00:02 - 02:49: Under this administration, we will continue pioneering new solutions in sustainable finance (2:35).

showAllTimestamps

yes

expandTimestamps

00:00 - 00:06: In the heart of South America, Uruguay is writing a new chapter in sustainable development (0:00).00:00 - 00:16: As one of the world's top beef exporters, Uruguay faces a unique challenge balancing economic growth with climate action (0:06).00:00 - 00:27: The government of Uruguay took a very strategic decision in mainstreaming climate and nature considerations into our economic policy (0:16).00:00 - 00:35: So, aligned with this vision, we introduced in our funding strategy the idea that the cost of borrowing should be linked with the environmental performance that we had (0:27).00:00 - 00:42: The bank and Uruguay came together and saw that there were ways of incentivizing greater targets to reduce methane in the production of cattle, which is a major issue under the climate change convention (0:35).00:00 - 00:50: In 2024, Uruguay secured a $350 million loan from the World Bank—a performance-linked loan (0:42).00:01 - 01:09: This is the first-ever World Bank loan that provides direct financial incentives to a country that is willing and committed to meet its environmental goals (0:51).00:01 - 01:17: Under this pioneering loan, the interest rate paid on this credit will be reduced by up to 100 basis points if Uruguay is able to reduce the intensity of its methane emissions in livestock production (1:09).00:01 - 01:27: The country could save up to $12.5 million (1:17).00:01 - 01:40: The interest rate buy-down will be assessed continually on a yearly frequency to incentivize the country to attain its environmental goals on sustainable livestock production throughout the maturity of the World Bank loan (1:27).00:01 - 01:51: In the design of this loan, the Ministry of Economy and Finance, the Ministry of Environment, and the Ministry of Livestock worked hand in hand (1:40).00:01 - 01:57: And it was also crucial the work that we did with the World Bank's technical teams in order to put forward this idea (1:57).00:02 - 02:13: If Uruguay meets its ambitious goals, it will receive interest rate reductions, and this came about through a transformative collaboration with the World Bank (2:05).00:02 - 02:23: In which I chose a new approach to using concessional funding in well-designed financial instruments to incentivize countries to provide global public goods (2:13).00:02 - 02:35: For over 15 years, Uruguay and the World Bank have partnered closely to develop new financial instruments (2:23).00:02 - 02:44: We value this legacy of financial innovation (2:35).00:02 - 02:49: Under this administration, we will continue pioneering new solutions in sustainable finance (2:35).

showAllTranscripts

no

duration

PT3M6S

scene7File

worldbank/Uruguay Performance-Linked Loan.Final.ENG

scene7Domain

scene7FileAvs

worldbank/Uruguay Performance-Linked Loan.Final.ENG-AVS

title

Uruguay Performance-Linked Loan

description

Explore Uruguay’s historic $350M World Bank performance-linked loan. Find out how this sustainable finance model cuts borrowing costs by up to 100 basis points to lower cattle methane emissions and balance economic growth with climate action.

showTimestampAndTranscript

yes