The bonds have been established to help fund projects designed to mitigate climate change or help affected people to adapt to its effects.
The new securities are cited as an example of innovation with the World Bank’s initiative – “Strategic Framework for Development and Climate Change”, which is aimed to help increase both public and private activities.
The bond initiative comes from the World Bank in co-operation with Skandinaviska Enskilda Banken (SEB). Additional investor support has quickly come for the green bonds – from the UN Joint Staff Pension Fund, Lansforsakringar, Skandia and two Swedish national pension funds.
In a statement, President of the World Bank Group, Robert Zoellick, said: “We hope it demonstrates that private citizens can safely and profitably invest their savings today while also helping provide a better world for their children.” He added that it can help investors secure higher returns than government securities.
Denominated in Swedish kronor, the initial amount of green bonds being SKr2.325B (US$297M) with a maturity of six year and interest rate 25 basis points over the Swedish Government’s own bond rates. The additional investor support has added a further SKr 375M (US$48M).
SEB is sole lead manager for the green bonds. Senior co-manager is Credit Suisse International, and Landesbank Baden-Wurttemberg is a co-manager.
