Innovative Forests Bond Issued to Unlock Private Financing for Forest Protection

10/31/2016

London/Sydney/Arlington, Va. USA– A first-of-its-kind Forests Bond, developed in conjunction with Conservation International (CI) and BHP Billiton, was issued today by the International Finance Corporation (IFC), a member of the World Bank Group. The Bond offers investors the choice of a cash coupon or a coupon in the form of forest carbon credits from an iconic REDD+ project.

The IFC Forests Bond supports the Kasigau Corridor REDD Project in Kenya, implemented by Wildlife Works Carbon LLC, which works to prevent deforestation and creates alternative income opportunities. CI is providing input to BHP Billiton with respect to conservation and REDD+ matters and will facilitate the exchange of lessons learned and best practices on REDD+ projects. 

“CI helps build the global system that makes forests more valuable when they’re standing than when they’re cut,” said Agustin Silvani, Vice President, CI’s Conservation Finance Division. “We are pleased to see the successful issuance of this innovative instrument and will continue to work with business and community leaders to develop more sustainable forest protection models.” 

Each year, the world loses around 5.5 million hectares of tropical forest—an area approximately the size of Costa Rica—and deforestation accounts for nearly 20% of global greenhouse gas emissions caused by humans, comparable to the emissions from all of the cars and trucks on Earth combined. Protecting forests is critical to achieving the global climate commitment of keeping the global warming under 2 degrees Celsius. 

“To do that, we need to mobilize $75 billion to $300 billion in the next decade and much of this needs to come from the private sector,” said Jingdong Hua, IFC Vice President and Treasurer. “The IFC Forests Bond demonstrates that innovative capital market mechanisms can be a powerful way to channel private sector funds into forest protection in emerging markets.” 

Developed with the support of BHP Billiton—who provides a price support mechanism that ensures the Kasigau Corridor REDD+ Project can sell the necessary amount of carbon credits until the Bond matures—the Bond is listed on the London Stock Exchange. 

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About Conservation International
 
Conservation International (CI) uses an innovative blend of science, policy and partnerships to protect the nature people rely on for food, fresh water, and livelihoods. Founded in 1987, CI works in more than 30 countries on six continents to ensure a healthy, prosperous planet that supports us all. Learn more ​about CI and follow our work on Facebook, Twitter​, Instagram and YouTube.

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