09.04.2018

World Bank Prices First Water Bond

The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) has priced a SEK 1 billion 7-year bond, the first in a series of Sustainable Development Bonds issued to raise awareness for the critical role that water and ocean resources play in development around the world. This follows an announcement made by the World Bank yesterday, launching the initiative during World Water Week2018. The focus for the new series is to highlight Sustainable Development Goal (SDG) 6 (clean water and sanitation) and SDG 14 (life below water).

Swedish investors AP1, SEB Företagsobligationsfond, SPP Storebrand and Swedbank Robur Fonder AB were among the key European institutional investors investing in the transaction. SEB is the sole lead manager for this transaction.

“We are very pleased to price this SEK-denominated Sustainable Development Bond, so soon after we announced our new initiative. The demand for this bond shows that investors are aware of the critical need to protect water, our most precious resource, and to ensure a sustainable future. This demonstrates SEB’s continued leadership on sustainability, and is reminiscent of our partnership with SEB and Swedish investors 10 years ago, in issuing the first labeled green bond. We appreciate the increased interest in the Sustainable Development Goals and the World Bank’s work,” says Arunma Oteh, World Bank Vice President and Treasurer.

“Water is the driver of nature. We at SPP Storebrand welcome IBRD’s effort to issue a bond which highlights the critical water topic. In the coming years, we need to scale up investments in infrastructure related to water tremendously. Raising awareness is a welcomed first step,” says Helena Lindahl, Senior Portfolio Manager at Storebrand.

“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,” says Christopher Flensborg, Head of Climate & Sustainable Finance at SEB.

With annual issuances between US$50-US$60 billion annually, all World Bank bonds support the financing of Sustainable Development Goal projects. World Bank bonds are aligned with the sustainability bond guidelines published by the International Capital Markets Association (ICMA). The World Bank is also a member of the Executive Committee of the Green Bond Principles. A key priority for the World Bank’s engagement in the capital markets is to build strategic partnerships with investors to raise awareness for the role of private sector financing in development. Similar awareness-raising initiatives launched earlier this year included gender as well as maternity health and nutrition. The focus on water and new oceans has attracted first-time investors to World Bank bonds.

Source: World Bank

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