The World Bank has launched a groundbreaking $225 million bond to support reforestation in Brazil's Amazon rainforest. This nine-year bond, set to mature in 2033, represents the largest outcome bond ever priced by the global lender. Investors are offered returns based on the success of carbon removal initiatives in the Amazon, specifically through the creation of carbon removal units from reforestation efforts.
A landscape view of Brazilian Amazon rainforest. AI generated picture.
In a notable shift from traditional carbon credit bonds, this bond directly links financial returns to carbon removal rather than simply avoiding emissions. The World Bank has earmarked nearly $36 million from the proceeds to fund Mombak, a Brazilian company that collaborates with local landowners to restore native tree species in the Amazon.
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Additionally, Microsoft has committed to purchasing the carbon removal units generated from these efforts. The bond guarantees principal protection, with annual returns ranging from 1.745% to 4.362%, depending on project outcomes.
Jorge Familiar, the Vice President and Treasurer of the World Bank, highlighted the strong interest from private investors, emphasising the growing appeal of bonds that connect financial gains with positive environmental impacts. The bond will settle on 29 August 2024, as part of the World Bank's broader commitment to sustainable development.
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DGB Group's large-scale carbon projects focus on nature conservation, offering nature-based solutions that help companies manage their carbon footprint while making a positive impact on the environment and fostering socio-economic growth. Collaborating with DGB goes beyond carbon mitigation, contributing to biodiversity enhancement, ecosystem restoration, and the betterment of local communities. We offer green bonds with an 8% annual return on investment that funds our impactful projects, offering investors the ideal opportunity to earn robust returns while supporting nature.
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