World Bank links investor returns to Rhino population with new bond

$150m deal adopts payment-for-success structure to help conservation efforts.

The World Bank has come to market with a long-awaited impact bond, which will pay investors based on the effectiveness of efforts to conserve critically endangered animals. 

The majority of the $150 million deal, which has been under development for more than five years, will fund projects under the World Bank’s sustainable development bond programme. 152 million Rand (€9.53 million) will be allocated to two conservation areas in South Africa with large populations of Black Rhinoceros’, to finance conservation efforts for the critically endangered species.  

Based on the social impact bond model developed to tackle issues such as homelessness and ex- convict rehabilitation, the bond will not pay a coupon. Instead, the UN-based Global Environmental Facility will pay investors at the end of the bond’s lifespan. The amount will be determined by how effective the debt has been at helping to conserve the rhino population across the two conservation areas. The outcome will be verified by the Zoological Society of London.  

A rhino growth rate between 0 and 2 percent will see investors paid $36.69 per $1000, rising to $73.38 if the growth rate is between 2 and 4 percent and $91.73 if it is above 4 percent, for a maximum payment of $13.76 million. At the highest rate, this represents a 1.83 percent annual return. 

“We are hopeful that this structure can be replicated across various geographies and for the conservation of various species,” said Oliver Withers, biodiversity lead within global sustainability at Credit Suisse, which structured the deal. The Swiss bank also led recently on a blue bond debt restructuring in Belize, which saw the country commit to protect 30 percent of its ocean area as part of the deal.