For the first time, the World Bank has issued a “green" bond. Through it, the Bank is loaning out money that will be used to finance climate-adapted projects around the world.
The World Bank and Skandinaviska Enskilda Banken (SEB) have presented a collaborative effort to finance projects that aim to limit climate change or help people to adapt to it. Together with several other important Scandinavian institutional investors, they are introducing a World Bank “green bond." Mistra is one of those investors. Through its asset manager Carlson, Mistra has purchased 50 million Swedish Crowns in bonds.
Combating climate change
Green bonds are one example of the type of innovation that the World Bank is attempting to encourage through its “strategic framework for development and climate change," which was presented earlier this year for the purpose of stimulating and coordinating activities in the public and private sectors. “Combating climate change will take enormous resources that can only come from a well-staged flow of public and private sources of finance. This transaction is an important first effort aimed at showing one way how this can be done," says Robert B. Zoellick, President of the World Bank.
The first green bonds from the World Banks have been issued in Swedish Crowns (SEK): a total of 2,325 billion SEK in bonds that mature in six years. The interest rate is 0.25 percent above the rate for Swedish government bonds. SEB is the intermediary and will offer the bonds to investors through its distribution network.
