Skip to Main Navigation
PRESS RELEASEFebruary 14, 2023

Emission Reduction-Linked Bond Helps Provide Clean Drinking Water to Two Million Children in Vietnam

WASHINGTON, February 14, 2023—The World Bank (International Bank for Reconstruction and Development, IBRD) today priced a five-year $50 million, principal protected Emission Reduction-Linked Bond that provides investors a return linked to the issuance of Verified Carbon Units (VCUs) expected to be produced by a project in Vietnam. The project aims to manufacture 300,000 water purifiers and distribute them to approximately 8,000 schools and institutions in Vietnam. It is expected to make clean water available to around two million children and to reduce greenhouse gas emissions by almost 3 million tons of carbon dioxide over 5 years. 

The bond is an outcome-based financial instrument that mobilizes private capital to support the financing of a project with positive climate and development impacts – with outcomes measured by the generation of VCUs. Through the transaction, investors are supporting the up-front financing required to manufacture and distribute water purifiers for use in schools and other community service institutions across Vietnam that will reduce the burning of biomass traditionally used in boiling water for safe consumption.  In addition to reducing greenhouse gas emissions, the purifiers help improve air quality, reduce associated health impacts, lower fuel costs and effort previously required to purify water, and help reduce deforestation.

“The Emission Reduction-Linked Bond comes at an important time in the global efforts to scale-up low-carbon solutions in developing countries. With this pilot transaction we can demonstrate another path for capital market investors to support the financing and implementation of climate action,” said World Bank Group President David Malpass. “Investors will directly benefit from the project’s success, as will the children in Vietnam who will get access to clean drinking water as a result. This structure can be replicated and scaled to channel more private capital to development and climate activities.”

The bond is 100% principal protected with the $50 million proceeds used to support the World Bank’s sustainable development activities globally. The Vietnam water purifier project is not a World Bank project.  Investors in the bond will forego ordinary coupon payments, with the equivalent amounts instead being provided, through a hedge transaction with Citi, to support the financing of the water purifier project managed by a private project developer. Instead of ordinary coupons, the investors will receive semi-annual coupon payments linked to the issuance of VCUs by the water purifier project on the Verra Registry.

"Financing innovative, outcome-based solutions is part of Citi’s commitment to help create a fair and inclusive transition to a low-carbon economy,” said Paco Ybarra, CEO of Citi’s Institutional Clients Group.“This transaction demonstrates the important role we can play in supporting connectivity between the capital markets and institutions like the World Bank that can help reduce emissions, expand the availability of clean drinking water, and bring scale to voluntary carbon markets.”

"We are honored to partner with World Bank for this inaugural Emission Reduction-Linked Bond. While offering investors an attractive coupon, it will help deliver new, sustainable methods of water purification to schools across Vietnam,” said Tony Trzcinka, Senior Portfolio Manager, Impax Asset Management.

“Velliv is very pleased to facilitate such an important impact investment as a lead investor. The strong social profile, helping to secure safe drinking water for more than 8,000 schools and nurseries in Vietnam, while at the same time providing a significant green carbon credit makes this investment truly exceptional. At the same time the pioneer investment will provide an attractive return profile for our pension savers,” said Thor Schultz Christensen, Deputy Chief Investment Officer, Velliv Pension.

“We are excited to participate in this unique transaction given its attractive relative valuation, targeted additionality and template-like structure. The ongoing verification of the carbon credits by an independent third party aligns with our focus on providing capital that has a direct and measurable social and/or environmental impact,“ said Stephen M. Liberatore, CFA, Managing Director/Head of ESG/Impact – Global Fixed Income, Nuveen.

The Vietnamese Ministry of Education and Training will distribute the water purifiers to beneficiary schools and institutions throughout the country. The water purifiers are provided for free to the beneficiary kindergartens, nurseries, primary schools, secondary schools, high schools as well as community homes, that were selected due to a prior lack of access to safe drinking water.

Transaction Summary 



Size (Aggregate Nominal Amount)

USD 50,000,000

Trade Date

February 14, 2023

Settlement Date

February 22, 2023

Maturity Date

March 31, 2028

Issue Price

97.38 per cent of the Aggregate Nominal Amount

VCU Linked Interest

Linked to the number of Verified Carbon Units (VCUs) issued by Verra for the water purifier project, paid semi-annually subject to a cap

Redemption Amount

Redemption at Par

Lead Manager





Luxembourg Stock Exchange

About 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

World Bank bonds support the financing of programs that further the Sustainable Development Goals (SDGs). World Bank bonds are aligned with the Sustainability Bond Guidelines published by the International Capital Market Association and as such support the financing of a combination of green and social, i.e., “sustainable development” projects, programs and activities in IBRD member countries as described in the World Bank Sustainable Development Bond Framework.


Net proceeds of the bonds described herein are not committed or earmarked for lending to, or financing of, any particular World Bank projects or programs.  Payments on the bonds are not funded by any particular World Bank project or program.

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". 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. The World Bank Sustainable Development Bond Framework, the World Bank’s Sustainable Development Bond Impact Report, and the information set forth therein are not a part of, or incorporated by reference into, the offering documentation.


Investor Relations and Sustainable Finance
World Bank Treasury


    loader image


    loader image