The bond offers investors the opportunity to join in financing IFC investments that promote biodiversity, protect the environment, and drive economic and social development.
“This issuance marks IFC’s second green bond dedicated to biodiversity, reinforcing our leadership in developing this critical market,” says Tom Ceusters, IFC Director for Treasury Capital Markets and Investments. “By mobilising private capital for biodiversity projects, we are demonstrating how financial innovation can address sustainability challenges while driving economic growth.”
Biodiversity finance was key focus at COP16
At the UN Conference of the Parties (COP16) on Biodiversity that took place earlier this year in Cali, Colombia, a key focus was biodiversity finance. The discussions centred on unlocking private capital to achieve ambitious sustainability goals. This bond responds to the urgent need to mobilise more private sector investments and align them with the long-term goals of the Global Biodiversity Framework.
“COP16 highlighted the need for collaboration with the private sector to raise awareness and create opportunities to deliver on the Global Biodiversity Framework. This transaction is an example of how to put this into practice and deliver positive development impact,” says Ben Powell, Head of Sustainability, Fixed Income at SEB.
The issuance was driven by an investment from the Swedish state pension fund AP7.
“We welcome IFC’s increased focus on biodiversity – a longstanding priority for AP7. This investment with IFC enables us to make a meaningful contribution by financing actions to preserve biodiversity,” says Ulrika Lindén, Senior Portfolio Manager at AP7.
Proceeds will support biodiversity initiatives
The proceeds of this bond will support biodiversity initiatives, such as the BTG Pactual Timberland Investment Group’s Latin American reforestation strategy which focuses on restoration and conservation in key regions, and BBVA Colombia’s biodiversity bond, the world’s first biodiversity bond aimed at regenerating natural forests in Colombia.
This is not the first time IFC and SEB have worked together on a transaction with a goal of nature preservation. In March this year, on World Water Day, IFC issued its first green bond designed to promote ocean-friendly projects and critical clean water resource protection in developing countries. That bond was denominated in Norwegian krone and it was followed by a similar issuance in Swedish krona in September. SEB acted as an underwriter on both transactions.
“We have been able to create a great collaboration around themes that IFC, SEB, and our investor clients are increasingly focused on, namely biodiversity, water and natural capital. This development has been backed by IFC’s knowledge and experience in these areas. We greatly appreciate their trust in exploring these transaction ideas, which have borne fruit in 2024. We are confident there’s more to come in 2025," says Ben Powell.