The people of Fiji are on the front lines when it comes to combatting climate change. That’s because the nation’s more than 300 volcanic islands—of which 110 are inhabited—include low-lying atolls that are highly susceptible to cyclones and floods.
The damage done by 2016’s Tropical Cyclone Winston, which caused economic losses that amounted to almost one-third of the country’s GDP, hinted at the potential for even greater damage and displacement in the future. As with all Pacific Island states, close to 20 percent of the region’s 10 million people could be displaced due to climate change by 2050.
To protect its 900,000 citizens and their livelihoods, Fiji has developed and launched a sovereign green bond—the first developing nation to do so. IFC and the World Bank supported this effort. The first tranche, which floated 40 million Fijian dollars (about $20 million), drew unprecedented demand from investors and was oversubscribed by more than double that amount. The bond helped Fiji create a new way to mobilize finance for development—and a market for private sector capital seeking investment opportunities that support climate resilience and adaptation.