The World Bank has launched the first in a series of sustainable development bonds linked to United Nations’ 17 Sustainable Development Goals, with the first ever water bond.
European investors AP1, SEB Företagsobligationsfond, SPP Storebrand and Swedbank Robur Fonder AB, were among the initial investors to have invested in this first issuance, the World Bank confirmed in a statement.
The AAA-rated SEK 1 billion 7-year bond has been issued by the International Bank for Reconstruction and Development (IBRD) to raise awareness of the role that water, and ocean resources, play in development around the world.
Helena Lindahl, a senior portfolio manager at Storebrand, said the coming years will see a sharp rise in investments in water.
“We at SPP Storebrand welcome IBRD’s effort to issue a bond which highlights the critical water topic,” she said. “In the coming years, we need to scale up investments in infrastructure related to water tremendously. Raising awareness is a welcomed first step.”
Lindahl’s comments were echoed by Christopher Flensborg, head of Climate & Sustainable Finance at SEB, who said that investors would welcome the World Bank’s issuance which highlights the “urgent need” for clean water.
He said: “The decision of the World Bank to launch an initiative to raise awareness for the health of oceans and urgent need for clean water through their sustainable development bond issues, is very much welcomed by investors.
“We see increased interest from our investors to understand risks around water management and the need to protect oceans. Engaging with the World Bank and others around this topic is extremely helpful.”
In the statement announcing the launch, the World Bank said that it makes annual bond issuances of between US$50-US$60 billion. It added that its bonds are aligned with the sustainability bond guidelines published by the International Capital Markets Association.