World Bank’s IFC issues first $200m green bond

Move builds on success of World Bank green issuances.

The International Finance Corp., the World Bank’s private-sector lending institution, has issued its first Green Bond to raise funds to support climate-friendly projects in developing countries. The move builds on the success of the World Bank’s Green Bonds which have attracted investment from pension funds including the California State Teachers’ Retirement System (CalSTRS), the United Nations Joint Staff Pension Fund, Sweden’s AP2 and AP3 pensions buffer funds.
Similarly, Sweden’s SEB will be the manager for the new four-year, $200m (€148m) fixed-rate bond. Proceeds from the issue will be set aside in a separate “green account” for investing exclusively in renewable energy, energy efficient, and other climate-friendly projects in developing countries, the IFC said.This is the first time IFC has issued bonds to raise funds to be put into a separate account tied to a specific pool of loans.
“The Green Bond is yet another example of how IFC is creating innovative financial products that offer both development impact and good return for investors,” said IFC Treasurer Nina Shapiro. The procedure was reviewed by Cicero, a research house tied to the University of Oslo. Earlier, Washington-based IFC announced the launch and pricing of a five-year $2bn benchmark issue, part of its regular fund raising. It said the issue was “was oversubscribed by leading investors from around the world”. The IFC made $14.5bn of new investments in fiscal 2009.