Washington, D.C/Nairobi, November 26, 2018—The World Bank (International Bank for Reconstruction and Development; IBRD) has raised more than US$660 million in Sustainable Development Bonds highlighting the critical role of ocean and water resources. Specifically, the World Bank focused on two Sustainable Development Goals (SDGs): SDG 14 (life below water) and SDG 6 (clean water and sanitation).
A range of institutional and retail investors globally have supported the initiative since it was launched in August. Ten bonds in five currencies have been issued under the initiative to date, with tenors ranging from 2 to 43 years. Investors including Capitulum Asset Management, Global Evolution, HSBC INKA / Swiss Life, Storebrand, and Sydbank all voiced strong support for the strategic focus on SDG 14 and SDG 6. The World Bank will continue to issue bonds under the initiative as part of a strategic effort to highlight SDG 14 and SDG 6.
Freshwater and marine ecosystems cover more than three-quarters of the earth’s surface and provide critical services—from habitats and drinking water, to contributing to climate control, while also providing nutrition, jobs and livelihoods. The World Bank, as the biggest multilateral funder for ocean and water projects in developing countries, is committed to working with countries to ensure access to safe and clean water and for the sustainable use of ocean and marine resources. This includes avoiding pollution reaching oceans through better waste management.
“As maintaining precious fresh and salt water resources is complex and challenging, governments must catalyze the private sector to develop innovative solutions. We are therefore delighted with the diverse range of investors that have purchased our bond series and appreciate the commitment of all stakeholders to new approaches to ensuring better stewardship of our fresh water and ocean resources.” said Arunma Oteh, World Bank Vice President and Treasurer.
The World Bank has US$37 billion in water-related investments and an oceans-related portfolio of more than $4 billion—including more than $550 million in projects that contribute to reducing marine pollution in countries such as the Philippines and Indonesia. The World Bank is also supporting countries as they help make their coastal communities more resilient, often in the face of dramatically shrinking coastlines; while also focusing on improving fisheries management in all regions where the Bank works.
“We are pleased that investors are committed to increasing access to clean water and protecting the health of our oceans, both of which are vital to the sustainable growth of economies, livelihoods and the future of our planet. Investors like these are key for mobilizing the kind of innovative financing we need to meet the Sustainable Development Goals," said Laura Tuck, Vice President of Sustainable Development at the World Bank.
In terms of fresh water resources, the World Bank is committed to achieving “A Water-Secure World for All” where water is managed and shared effectively and sustainable to support agriculture, manufacturing, job creation, households, and the environment. In a water-secure world, countries can reduce and adapt to the impacts of a changing climate on water, while consuming it efficiently. In the last two years, the World Bank helped more than 47 million people access safer water and provided more than 24 million people with access to better sanitation.
The thematic focus on SDGs 14 and 6 follows World Bank Sustainable Bonds launched earlier this year while focusing on gender and health and nutrition. With annual issuances between US$50-US$60 billion annually, all World Bank bonds support the financing of programs that support the Sustainable Development Goals. World Bank bonds are aligned with the sustainability bond guidelines published by the International Capital Markets Association (ICMA). The World Bank is also a member of the Executive Committee of the Green Bond Principles. A key priority for the World Bank’s engagement in the capital markets is to build strategic partnerships with investors to raise awareness for the role of private sector financing in development.
Examples of Water and Ocean Projects:*
In India, a World Bank project has mapped the entire coastline to better manage coastal space and minimize vulnerabilities through shoreline protection and land use plans. So far, 1.7 million people have benefitted from the program, with nearly half of them women, and 16,500 hectares of mangroves have been planted. Sewage treatment plants for about 1 million people are helping to prevent the flow of more than 80 million liters of untreated sewage into the ocean per day and to protect over 400 km of coastline.
In Indonesia, where two-thirds of coral reefs are considered threatened by overfishing, a coral reef project has benefited 358 village communities by establishing marine protected areas and reducing illegal and destructive fishing. The project aims to increase communities’ income by 15 percent and improve coral reef health in at least 70 percent of project sites by 2019.
In Romania, a pollution control project is reducing the discharge of nutrients into water bodies leading to the Danube River and Black Sea. Over 100 communes have benefited from support under the first phase of the project, 11 sewerage systems and communal wastewater treatment plants were built, seedlings were planted on 182 hectares in 57 communities, and the first pilot plant was built for biogas production from manure. Over the past decade, water quality and ecosystem improvements been observed in the Danube River/Black Sea basin due to this project.
The Panama Metro Water and Sanitation Improvement Project helped improved the quality of water service for 80,382 beneficiaries in Colón and provided the National Water and Sewer Agency with a replicable model, using performance-based contracts, for effectively piloting and implementing new methods of doing business. The project increased water supply continuity from 13 percent in 2014 to 71 percent in 2017.
(* These examples of water and ocean projects are for illustrative purposes only and no assurance can be provided that disbursements for projects with these specific characteristics will be made by the World Bank during the term of the bonds described herein.)
World Bank Sustainable Development Bonds to Highlight SDG 14 and 6: Quotes
"Water is the driver of nature. We at SPP Storebrand welcome IBRD’s effort to issue a bond which highlights the critical water topic. In the coming years, we need to scale up investments in infrastructure related to water tremendously. Raising awareness is a welcomed first step," said Helena Lindahl, Senior Portfolio Manager at Storebrand.
"The decision of the World Bank to launch an initiative to raise awareness for the health of oceans and urgent need for clean water through their sustainable development bond issues, is very much welcomed by investors. We see increased interest from our investors to understand risks around water management and the need to protect oceans. Engaging with the World Bank and others around this topic is extremely helpful," said Christopher Flensborg, Head of Climate & Sustainable Finance at SEB.
“Sustainability is clearly becoming an ever more important topic, also among the investment community. We welcome and support the World Bank’s clean water initiatives,” said Jens Erik Skak Boesen, Senior PM EM Debt at Sydbank.
“The debut water bond in Kazakhstan tenge by one of our preferred SSA-issuers, the World Bank, enables us to ensure sustainability in local currency investing at highly competitive rates,” said Lutz Roehmeyer, CIO and founder of Capitulum Asset Management.
“We welcome very much this opportunity for a responsible investment into World Bank bonds. It also underlines our commitment to sustainable considerations in our active risk management approach and investment decision making,” said Frank Nieresel, Senior PM Fixed Income at Swiss Life Asset Managers.
“We are seeing an ever-growing demand from our investors on Sustainability Bonds across currencies and tenors and JPM is proud to be working alongside the World Bank in this capacity,” said Amélie Darrort, Co-Head of EMTN Desk at J.P. Morgan.
"DZ BANK is pleased to support the World Bank’s initiative to highlight the role of ocean and water resources by having brought new investors to the growing World Bank Blue Bond franchise. As the Central Bank and international arm of the German Cooperative Financial System, DZ BANK is itself an issuer of sustainable bonds. The German Cooperative Financial Sector is at the helm of SRI development in the fast growing German ESG investor market. Hence, we are delighted to contribute to the World Bank's efforts in achieving the Sustainable Development Goals. We thank the World Bank for their efforts to put clean water and oceans on the map of SRI and ESG investments. Clean water is a key factor in ensuring health and bringing down child mortality in developing nations. Untarnished oceans are a foundation for sustainable economic development in coastal communities across the globe. Sustainable fisheries based on clean Oceans may provide an economic perspective especially for the growing future generations in Africa. DZ BANK is happy to contribute to these causes by placing the World Bank's Blue Bonds with a quickly growing number of investors and SRI Mandates in Germany and Europe. We are committed to growing this franchise further together with the World Bank," said Wolfgang Koehler, CFA, Member of the Board of Directors at DZ BANK AG.
"Natixis and its privileged partners, such as OFI AM acting for Macif Group and Natixis Assurance, are committed to environmental responsibility. With more than USD 200 million raised for ocean protection and clean water resources, they have shown their commitment to the preservation of this common heritage. As we strengthened our Socially Responsible Investment policy this year, in favor of our members, supporting the World Bank's initiative to raise awareness for the access of clean water and the health of our oceans, appears to us as a new opportunity to reinforce our commitment to contribute to biodiversity," says Sabine Castellan-Poquet from Macif Group. "This major initiative is an important step paving the way for the financial industry and its success perfectly kick-starts Natixis' plan to design new products with an SDG-based approach to complement its green offerings and answer investors’ growing appetite for these types of products. Natixis is committed on 8 of the 17 SDGs through both its client activities and its direct corporate action," says Elsa Martin, Global head of MTN Desk at Natixis.
World Bank Sustainable Development Bonds to Highlights SDG 14 and 6: Select Transaction **
1,000.0 m Swedish krona
1,000.0 m Kazakhstani tenge
125.0 m euro
50.0 m euro
30.0 m Australian dollar
1,500,000.0 m Indonesian rupiah
7,500.0 m Kazakhstani tenge
8,000.0 m Kazakhstani tenge
100.0 m euro
500.0 m Mexican peso
14.0 m euro
26.5 m euro
(** The net proceeds from the sale of the bonds are used by the World Bank to finance sustainable development projects and programs in the World Bank’s member countries without being committed or earmarked for lending to, or financing of, any particular projects or programs. This press release does not constitute an offer for sale of the bonds described. The offering and sale of the bonds described in this document are subject to restrictions under the laws of several jurisdictions. Bonds may not be offered or sold except in compliance with all such laws.)
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.
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