GLOBAL - Investment in World Bank green bonds have now surpassed the $1bn (€736m) mark, reflecting a growing interest by investors in climate change adaptation and mitigation projects.
The latest issue, a World Bank green bond denominated in Swedish Kronor (SEK), attracted investors including WWF-Sweden, Church of Sweden, European private banks and life insurance companies, as well as the Swedish National Pension Fund AP3.
The first - also SEK-denominated - World Bank green bond was launched in November 2008. Since then, additional bonds have been issued in US dollar and other currencies for investors in the US, Europe and Japan.
The bonds support projects in the World Bank's member countries, which are designed to tackle the causes and consequences of climate change in the developing world and allow institutional investors to support climate change solutions within their high-grade fixed income investment mandates.
The projects include alternative energy installations, funding for new technologies that reduce greenhouse gas emissions, reforestation, watershed management and flood protection.
"Climate action in developing countries - specifically mitigation and adaptation initiatives - requires important financing by the international community, from both public and private sources," said Warren Evans, director of the Environment Department at the World Bank.
"We are pleased to see continued investor support to what the World Bank is carrying out in conjunction with our country partners; it is an indication that investors fully understand the inextricable link between development and climate change. Helping one clearly helps the other," added Evans.
On a similar note, Nikko Asset Management has just announced it is set launch a World Bank Green Fund, which can invest up to 100% of its portfolio in green bonds issued by the World Bank. The fund will specifically target a range of international institutional investors, including pension funds.
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