The World Bank (International Bank for Reconstruction and Development, IBRD) has mandated HSBC to structure a new outcome bond aimed at supporting reforestation efforts in the Brazilian Amazon region. This principal-protected outcome bond, with an expected nominal amount of approximately $200 million, will support the World Bank’s sustainable development activities while mobilizing private capital from foregone coupon payments to finance reforestation projects in Brazil.
“The World Bank continues to pursue innovative ways to finance sustainable development, and outcome bonds are a perfect illustration of this commitment. We are excited to unveil plans to expand our suite of outcome bonds, aligning investors’ financial returns with measurable and impactful outcomes in the fight against climate change,” said Jorge Familiar, Vice President and Treasurer of the World Bank.
The World Bank Amazon Reforestation Outcome Bond is designed to provide up-front financing for reforestation initiatives selected by Mombak, a company based in Brazil specializing in large-scale reforestation projects in the Amazon. A portion of the bond’s targeted return will be linked to the value of carbon credits generated by these projects. An amount equal to a portion of the coupons that normally would be paid by the World Bank will instead finance the restoration of deforested and degraded lands.
Investment returns on the bond are linked to the value of carbon credits generated by these projects. The successful implementation of this outcome bond would represent another innovative method introduced by the World Bank for its mission to eradicate extreme poverty and boost shared prosperity on a livable planet.
About the World Bank
The World Bank (International Bank for Reconstruction and Development, IBRD), rated Aaa/AAA (Moody’s/S&P), is an international organization created in 1944. It operates as a global development cooperative owned by 189 nations. The World Bank provides loans, guarantees, risk management products, and advisory services to middle-income and other creditworthy countries to support Sustainable Development Goals and end extreme poverty while promoting shared prosperity. It also coordinates regional and global responses to development challenges. The World Bank has been issuing sustainable development bonds in international capital markets for over 70 years.
About Mombak
Mombak’s mission is to rebuild forests in the Amazon by developing high-integrity carbon removal projects, reforesting degraded Brazilian pastureland using native tree species. These projects generate high-quality carbon removal credits sold via spot market sales and offtake agreements. The deal aims to support Mombak's ability to reestablish around 25 forests containing at least 30 million trees across more than 100 native Brazilian species on roughly 70,000 acres.
Disclaimers
This press release is not an offer for sale of securities of the International Bank for Reconstruction and Development ("IBRD"), also known as "World Bank," nor does it reflect any obligation of the World Bank to proceed with a future offering. Information set forth herein is based on currently available information and is subject to change and completion. Any offering of World Bank securities will take place solely based on relevant offering documentation prepared by or on behalf of the World Bank.
Contact
Investor Relations and Sustainable Finance
World Bank Treasury
debtsecurities@worldbank.org