World Bank Announces New Outcome Bond To Fund Amazon Reforestation In Brazil

World Bank Announces New Outcome Bond To Fund Amazon Reforestation In Brazil - Carbon Herald

The World Bank has mandated London-based financial services group HSBC (LSE: HSBA; NYSE: HSBC) to structure a new outcome bond aimed at reforestation efforts in the Brazilian Amazon.

This principal-protected outcome bond, expected to be worth around $200 million, will support the World Bank’s sustainable development initiatives while mobilizing private capital from foregone coupon payments to finance reforestation projects in Brazil.

These projects aim to deliver both positive climate and development co-benefits, the World Bank said in a statement Thursday.

Jorge Familiar, Vice President and Treasurer of the World Bank, emphasized the institution’s commitment to innovative financing for sustainable development, highlighting that outcome bonds align investors’ financial returns with measurable environmental outcomes.

This new bond will expand the World Bank’s suite of outcome bonds — special instruments that provide investors with the opportunity to support specific development projects and outcomes, furthering their mission to combat climate change.

Relevant: Vietnam Wraps Up $51.5M Carbon Credits Sale To World Bank

The World Bank Amazon Reforestation Outcome Bond will secure upfront financing for reforestation initiatives managed by Mombak, a Brazilian company specializing in large-scale Amazon reforestation projects.

A portion of the returns from the bond will be linked to the value of carbon credits generated by these initiatives.

Instead of the usual coupon payments, an equivalent amount will fund the restoration of deforested and degraded lands.

The investment returns are directly tied to the success of these carbon credit-generating projects.

If implemented successfully, this innovative financial instrument will become another example of the World Bank’s commitment to eradicating extreme poverty and promoting shared prosperity on a sustainable planet.

Read more: World Bank: Global Carbon Pricing Revenue Tops $100 Billion But Falls Short On Impact

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Posts
Translate »