World Bank USD 500 Million Green Bonds Support Global Climate Action

The World Bank (International Bank for Reconstruction and Development – IBRD) announced that it has raised USD 500 million with World Bank green bonds to support the financing of global climate action. This comes at a time when global leaders are preparing for COP22, and implementing the December 2015 Paris Climate Agreement that will enter into force on November 4, 2016.

The lead order of USD 250 million for this transaction was from the Maryland State Treasurer’s Office. The remainder of the bonds were placed with US institutional investors, including Blackrock and PIMCO.

“This is the State’s first investment in green bonds, and builds on the State’s efforts to increase awareness for climate finance and carbon disclosure,” said Maryland State Treasurer Nancy Kopp. “By buying World Bank green bonds, the State is investing in a high-quality product that meets the objectives of maximum security and highest investment returns, while at the same time supporting global climate action. It is also a message to our citizens, that the State of Maryland supports climate policies in all areas of government.

“PIMCO views the World Bank’s green bonds as an opportunity to help our clients achieve their investment objectives while also supporting the World Bank’s important global sustainability efforts,” said PIMCO’s Scott Mather, Chief Investment Officer U.S. Core Strategies.

“We welcome the efforts of the international community to tackle our generation’s most pressing challenge of climate change through the 2015 Paris Climate Agreement that enters into force tomorrow. Mobilizing financing through the capital markets is a key part of the solution that the World Bank Treasury has been leading since 2008, with its green bond transactions and other capital market activities. We’re very pleased that the State of Maryland and other institutional investors are supporting these climate finance efforts with their investments in high-quality, liquid World Bank bonds,” said World Bank Vice President and Treasurer, Arunma Oteh.

Since the World Bank’s first green bond launched in 2008, the World Bank has issued 127 green bonds in 18 currencies, totaling approximately USD 9.6 billion equivalent. World Bank green bonds offer investors an opportunity to support environmental solutions while benefiting from the triple-A credit strength of the World Bank. World Bank green bonds support the financing of projects in member countries that meet specific criteria for low carbon and climate resilient growth, seeking to mitigate climate change or help affected people adapt to it. The types of eligible projects include renewable energy installations, energy efficiency projects, and new technologies in waste management and agriculture that reduce greenhouse gas emissions and help finance the transition to a low carbon economy. They also include financing for forest and watershed management and infrastructure to prevent climate-related flood damage and build climate resilience.

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