The latest issue of World Bank green bonds has pushed the total amount of such financing to more than $1 billion (approx. 735 mln.), reflecting continuing strong investor interest in this unique investment opportunity. World Bank green bonds support projects in the World Bank's member countries that meet specific criteria for low carbon development. They are a rare opportunity for institutional investors to support climate change solutions within their high-grade fixed income investment mandates.
"Investing in the World Bank's top-rated green bonds is a great way to promote smart and clean economic development in our planet's emerging economies while delivering dependable returns for the New York State Common Retirement Fund and its more than one million members. Investing in these bonds helps New York join the effort to curb harmful climate change while delivering bottom-line returns," commented Thomas P. DiNapoli, New York State Comptroller, an investor in USD-denominated World Bank Green Bonds.
The latest issue, a World Bank green bond denominated in Swedish Kronor (SEK), attracted investors including WWF-Sweden, Church of Sweden, European private banks and life insurance companies, as well as the Swedish National Pension Fund AP3. The first World Bank green bond, also denominated in SEK, was launched in November 2008. Since then, additional bonds have been issued in USD and other currencies, for investors in the US, Europe and Japan.
"The amounts involved in the negotiations on official climate financing are very small compared to the investment needs in emerging markets. Consequently, private financial flows must play the lead role. But for that to happen, investments must be profitable. The World Bank green bond provides a good investment and a safe return, while offering investors the opportunity to actually help combat climate change," said Klas Eklund, Senior Economist, SEB.
"Climate action in developing countries - specifically, mitigation and adaptation initiatives -requires important financing by the international community, from both public and private sources. We're pleased to see continued investor support to what the World Bank is carrying out in conjunction with our country partners; it's an indication that investors fully understand the inextricable link between development and climate change. Helping one clearly helps the other," said Warren Evans, Director of the Environment Department at the World Bank.
World Bank green bonds support World Bank-funded projects that are designed to tackle the causes and consequences of climate change in the developing world. The types of projects that may be supported by World Bank green bonds include alternative energy installations, funding for new technologies that reduce greenhouse gas emissions, reforestation, watershed management and flood protection.