IFC Issues $184M Green Bond to Promote Biodiversity and Ecosystem Services in Emerging Markets

New Green Bond to Mobilize Private Capital for Sustainable Projects, Supporting Global Biodiversity Goals.

The International Finance Corporation (IFC), a member of the World Bank Group, has issued a $184 million green bond to fund projects aimed at protecting biodiversity and enhancing ecosystem services in emerging markets. The five-year, 2 billion Swedish krona bond was underwritten by Skandinaviska Enskilda Banken AB (SEB) and represents a significant step toward mobilizing private capital to address pressing environmental and sustainability challenges.

The bond offers investors an opportunity to participate in financing IFC's investments that focus on biodiversity conservation, environmental protection, and sustainable economic and social development. Notably, AP7, Sweden’s state pension fund, was the sole investor in the bond, underscoring the growing interest in biodiversity finance.

A Commitment to Biodiversity Conservation

“This issuance marks IFC’s second green bond dedicated to biodiversity, reinforcing our leadership in developing this critical market,” said Tom Ceusters, IFC’s Director for Treasury Capital Markets and Investments. He highlighted how the bond mobilizes private capital for biodiversity projects, demonstrating the potential of financial innovation to tackle sustainability issues while promoting economic growth.

The bond aligns with the discussions at the UN Conference of the Parties (COP16) on Biodiversity held in Cali, Colombia, which emphasized the urgent need to unlock private sector capital to meet ambitious sustainability goals. As governments and organizations work towards achieving the Global Biodiversity Framework, the IFC's green bond serves as an example of how private investments can contribute to these objectives.

Supporting Concrete Biodiversity Initiatives

The proceeds from this green bond will directly support a range of initiatives focused on biodiversity preservation, including:

• BTG Pactual Timberland Investment Group’s Latin American reforestation strategy, which aims at restoring and conserving key forest regions in Latin America.
• BBVA Colombia’s biodiversity bond, the world’s first biodiversity bond designed to regenerate natural forests in Colombia, further supporting the protection of the country’s rich biodiversity.

In addition to financing these projects, IFC continues to provide guidance and resources for biodiversity finance through its Biodiversity Finance Reference Guide, which helps investors, financiers, and governments identify viable opportunities for biodiversity protection and ecosystem restoration. In October 2024, IFC expanded on this framework by releasing a supplement on Biodiversity Finance Metrics for Impact Reporting, enabling better measurement of the impact of biodiversity projects.

A Pioneering Investment in Sustainability

“We welcome IFC’s increased focus on biodiversity—a longstanding priority for AP7,” said Ulrika Lindén, Senior Portfolio Manager at AP7. “This investment with IFC enables us to make a meaningful contribution by financing actions to preserve biodiversity.”

This bond marks a pioneering move by IFC to attract private capital into a market focused on biodiversity finance, reinforcing the financial sector’s role in addressing global sustainability challenges. By continuing to foster these investments, IFC aims to generate long-term impact that aligns with global efforts to protect the environment and promote sustainable development.

As the world confronts an escalating biodiversity crisis, initiatives like this green bond play a vital role in driving private sector involvement and achieving the goals set forth at COP16 and beyond.