WASHINGTON, June 13, 2024 — The World Bank (International Bank for Reconstruction and Development, IBRD) has mandated HSBC to structure a new outcome bond to address reforestation efforts in the Brazilian Amazon region. This principal protected outcome bond, with an expected nominal amount of approximately $200 million, will support World Bank’s sustainable development activities while also mobilizing private capital from the foregone coupon payments to support the financing of reforestation projects in Brazil with positive climate and development co-benefits.
“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 is the original member of the World Bank Group and 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 the Sustainable Development Goals and to end extreme poverty and promote shared prosperity. It also provides leadership to coordinate regional and global responses to development challenges. The World Bank has been issuing sustainable development bonds in the international capital markets for over 70 years to fund programs and activities that achieve a positive impact. More information on World Bank bonds is available at www.worldbank.org/debtsecurities.
About Mombak
Mombak’s mission is to rebuild the forests of the Amazon by developing high-integrity carbon removal projects, reforesting degraded Brazilian pastureland using native and biodiverse tree species. The additional carbon removed from the atmosphere by these projects generates high-quality carbon removal credits sold via spot market sales and offtake agreements. The deal is intended to support Mombak's ability to reestablish around 25 forests in deforested areas of the Brazilian Amazon biome. These forests will contain at least 30 million trees of more than 100 native Brazilian species, including several species threatened with extinction. The forests will cover an area of around 70,000 acres - roughly the size of 5 Manhattan islands - and will generate hundreds of direct and indirect jobs in marginalized Amazon communities.
Disclaimers
This press release is not an offer for sale of securities of the International Bank for Reconstruction and Development ("IBRD"), also known in the capital markets as "World Bank" and does not 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 on the basis of the relevant offering documentation including, but not limited to, the prospectus, term sheet and/or final terms, as applicable, prepared by the World Bank or on behalf of the World Bank, and is subject to restrictions under the laws of several countries. World Bank securities may not be offered or sold except in compliance with all such laws. World Bank securities may not be suitable for all investors.
Contact
Investor Relations and Sustainable Finance
World Bank Treasury
debtsecurities@worldbank.org
