Washington, DC, March 30, 2016—
IFC, a member of the World Bank Group, today issued a 10-year green bond, raising $700 million for climate-smart investments in emerging markets. The bond was upsized from $500 million in response to significant investor demand.
“Climate change impacts everyone, but the effects will be most acutely felt by people in developing countries,” said IFC Vice President and Treasurer Jingdong Hua. “The response to IFC’s green bond demonstrates the significant potential of capital-market mechanisms to mobilize long-term investment for climate finance and other pressing development challenges.”
Proceeds from IFC green bonds are allocated within IFC to a separate account and will be used for investments in renewable energy, energy efficiency, and other areas that reduce greenhouse emissions. IFC’s inclusion criteria for eligible investments has been independently verified by the Center for International Climate and Environmental Research-Oslo, CICERO.
“In addition to IFC’s strong credit profile, there are two components of IFC’s Green Bond program that distinguish it as especially attractive for investors: impact reporting and environmental second opinion. IFC’s work toward harmonization of environmental impact metrics and its engagement with Cicero for a second party opinion are extremely helpful as investors look to evaluate the impact of projects in a Green Bonds program.” said Ashley Schulten, Portfolio Manager at BlackRock.
“We appreciated the opportunity to invest in IFC once again, particularly with a ten year maturity,” said Chris Wigley, Senior Portfolio Manager at Mirova. “We were also pleased to see included in eligible projects, investments in sustainable forestry which is something of a rarity in Green Bonds currently.”
“IFC’s new Green Bond fits well into AP2 investment strategy. AP2 have made a decision to take the next step to break out Green Bonds as a separate investment strategy. A strategy combining good returns with sustainable consideration.” said Lars Lindblom, Portfolio Manager.
This transaction takes total new issuance raised under IFC’s Global Green Bond Program to around $5 billion. During IFC’s fiscal year 2015, 38 investments received IFC’s green-bond financing. These investments are expected to reduce greenhouse emissions by the equivalent of 2.5 million metric tons of carbon dioxide per year—a result similar to taking 500,000 cars off the road.
IFC has issued green bonds in ten currencies including Chinese yuan, Indian rupees, South African rand and Peruvian soles as part of a strategy to develop the green bond asset class in emerging markets
IFC Green Bonds Terms
Issuer: IFC (International Finance Corporation)
Amount: US$700 million
Settlement date: April 7
th
2016
Maturity date: April 7
th
2026
Issue price: 99.857%
Coupon: 2.125%
Denomination: USD 1,000
Listing: London Stock Exchange
Underwriters: BofA Merrill Lynch, Credit Agricole CIB, JP Morgan, TD Securities
IFC Global Bond Distribution of Orders
Investor Type
Banks: 22%
Central Bank/Official Institution: 29%
Fund Managers: 49%
Geography
Americas: 42%
Asia Pacific: 28%
Europe, Middle East and North Africa: 30%
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence, to create opportunity where it’s needed most. In FY15, our long-term investments in developing countries rose to nearly $18 billion, helping the private sector play an essential role in the global effort to end extreme poverty and boost shared prosperity. For more information, visit
www.ifc.org
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