- Strategic investment: IFC raises AUD 700M through a 10-year green Kangaroo bond to support biodiversity projects in emerging markets.
- Investor demand: Strong global interest led to nearly AUD 800M in orders, highlighting appetite for biodiversity finance.
- Framework expansion: Proceeds will fund biodiversity, climate adaptation, and conservation projects under IFC’s expanded Green Bond Framework.
IFC champions biodiversity with landmark green bond
The International Finance Corporation (IFC), part of the World Bank Group, issued a green Kangaroo bond worth AUD 700M to close the biodiversity finance gap and bolster sustainable economic growth in emerging markets.
“This issuance will finance projects that conserve, restore, and protect biodiversity in emerging markets,” said Tom Ceusters, IFC Director of Capital Markets and Investments.
“I’m delighted to see strong interest from high-quality investors in our green Kangaroo bond to support biodiversity finance, which has emerged as a fast-growing area in green finance.”
Key transaction details
- The 10-year fixed-rate bond carries a 4.90% coupon and a spread of 56.48 basis points over December 2034 ACGB.
- Strong investor interest, especially from central banks and official institutions, resulted in orders near AUD 800M.
- The issuance was arranged by ANZ, Daiwa Capital Markets Europe, and Nomura International.
Related Article: IFC and Axis Bank Launch $500 Million Initiative for Sustainable Projects in India
Investor appeal
The transaction’s timing capitalized on favorable market conditions, including higher yields and global demand for green bonds.
“The new bond’s approximately 5% yield proved highly attractive to offshore real-money accounts,” said Brenton Smith, Director of Debt Syndicate at ANZ.
Oliver Holt, MD at Nomura International, highlighted IFC’s agility:
“IFC’s strategy was rewarded with the largest 10-year Supranational trade since 2010, aided by the enhanced green use of proceeds.”
Broader impact
Proceeds from the bond will support biodiversity initiatives like:
- Latin American reforestation via BTG Pactual Timberland Investment Group’s strategy.
- Forest regeneration through BBVA Colombia’s biodiversity bond, the world’s first of its kind.
IFC’s efforts reflect its expanded Green Bond Framework, which now includes biodiversity, ocean and water protection, and detailed criteria for climate adaptation projects.
“The Kangaroo market remains a strategic focus for IFC,” said Manshun Chan of Daiwa Capital Markets Europe. “This issuance raises awareness on biodiversity and nature finance projects under IFC’s green framework.”
With Australian dollar issuances comprising 19% of IFC’s funding in FY2024, this green bond underscores its commitment to diversifying funding while driving global environmental progress.
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