The government of the United Kingdom and the Lima Stock Exchange (BVL) have announced the publication of the Green Bonds Guide, a document aimed at promoting the creation of a green bond market in Peru.

According to a statement from the U.K. government, the guide provides international best practice for this kind of business, as well as the basic principles that must be met, in order to issue green bonds to finance clean energy technology projects. “The guide was developed by MEXICO2, of the Bolsa Mexicana de Valores Group, which successfully developed a similar project in Mexico with funding from the British Government,” reads a statement.

According to the guide, in order to guarantee transparency of all investments, the statements of the bond issuers should be reviewed by an independent entity, while the information of the projects related to bond issuances should be detailed. Net proceeds from this kind of transaction can be used to finance new projects, or to refinance a portfolio of existing assets.

“The conducting of external reviews is suggested to reinforce the credibility of the green bonus label. It is one of the best global practices to provide transparency and certainty to the investor,” continues the document.

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External reviews may ensure that the financed projects have an environmental impact that is compatible with a green investment, the bond issuer is protected against potential allegations of greenwashing, and that the independent entity providing the project’s review help the bond issuer in improving its projects.

Peru is expected to hold a new renewable energy auction this year. As revealed in mid-March by the president of the Peruvian Society of Renewable Energies, Juan Coronado, around between 500 MW and 1 GW of new generation power may be contracted through this auction.