The world’s first wildlife conservation bond has been issued by the World Bank , raising $150 million that will be used partly to protect South Africa’s black rhinos.
main point
- The Wildlife Conservation Bond is the world’s first financial instrument of its kind that is outcome-based and will channel investments for the conservation of the black rhino population.
- The World Bank’s International Bank for Reconstruction and Development has announced that the returns paid by the five-year bond will be determined by the rate of animal population growth in two South African reserves, the Great Fish River Nature Reserve and Addo Elephant National Park .
- If this program is successful, it could be expanded to protect other wildlife species such as tigers, lions and gorillas in Kenya.
- Similar bonds have been issued in the past to finance various outcomes ranging from maritime projects in the Seychelles to girls’ education in rural India.
rhinoceros population
There are five species of rhinoceros globally. Most of the rhinos are concentrated in South Africa, the majority of which are white rhinos. The number of black rhinos has dropped from 65,000 in 1970 to about 2,600. These animals are found in three other countries of Africa. They weigh as much as 1.4 tons and are much smaller than white rhinos.
bond
The issuer, instead of paying the coupon, will contribute to the conservation of the animals. Buyers will receive payment from the Global Environment Facility based on goals that are predetermined for the growth of animal populations.
The bond is structured by Credit Suisse Group AG and also acts as a joint bookrunner with Citigroup. The bond was sold for 94.8 percent of its nominal total amount, with a maximum success payout of US$13.8 million. The success of this program, as well as its payouts, will be determined by Conservation Alpha. The Zoological Society of London is the verification agent.
