World Bank Issues USD 225 million Amazon Reforestation-Linked Outcome Bond

The bond is designed to link investors’ financial returns to measurable and impactful reforestation outcomes in the Amazon, making it the largest outcome bond to date.

The World Bank (International Bank for Reconstruction and Development, IBRD) has announced the issuance of the Amazon Reforestation-Linked Outcome Bond, marking a significant step in sustainable finance. This 9-year, USD 225 million bond was priced on August 13, 2024, and is set to mature on July 31, 2033. The bond is designed to link investors’ financial returns to measurable and impactful reforestation outcomes in the Amazon, making it the largest outcome bond to date.

This innovative bond mobilizes approximately USD 36 million in additional capital from investors to support the reforestation efforts of Mombak, a Brazilian company dedicated to large-scale native reforestation in the Amazon. The bond attracted interest from both repeat and new investors, highlighting the growing appetite for financial products that combine positive development impact with financial returns.

Outcome bonds, pioneered by the World Bank, provide investors with a guaranteed return that is lower than the ordinary return on similar World Bank issuances. The difference in the return is used to fund specific projects—in this case, the reforestation of the Amazon. The bond is fully principal protected, with the proceeds supporting the World Bank’s broader sustainable development initiatives globally.

The World Bank’s leadership in the sustainable capital markets has been applauded by the lead investors in this bond, which include prominent institutions such as Nuveen, T Rowe Price, Mackenzie Investments, Rathbone, and Velliv. Additional investors, including AP2, Azimut, IMPAX, Muzinich, and RBC BlueBay Asset Management, also participated in the transaction, reflecting a diverse and committed investor base.

Investor statements underscored the significance of the bond in aligning financial goals with environmental stewardship. Lasse Melgaard, World Bank Resident Representative for Bulgaria, Czechia, and Slovakia, highlighted the bond as a testament to the growing demand for investment products that offer both strong returns and measurable positive impact, particularly in the fight against climate change.

This outcome bond aligns with the global push towards nature-positive investments and supports the preservation of the Amazon, a critical region for global biodiversity and climate stability. With over 79 percent of recent global nuclear capacity growth occurring in Asia, the World Bank continues to explore a pipeline of outcome bonds across various sectors, aiming to replicate and expand on successful structures like this one.

As part of its ongoing commitment to sustainable development, the World Bank plans to continue leveraging its expertise in structuring innovative financial instruments that meet the growing demand for investments that deliver both economic and environmental returns.