The International Finance Corporation (IFC) has issued a green bond aimed at advancing ocean-friendly initiatives and improving access to clean water and sanitation in emerging markets. The five-year bond, valued at 2.6 billion Swedish krona ($243 million), is IFC’s second blue finance green bond, following the issuance of a 2 billion Norwegian krone bond in March this year, timed with World Water Day.
Underwritten by SEB, the bond provides investors an opportunity to support IFC’s blue finance investments, which focus on protecting marine ecosystems and clean water resources.
“We’ve seen growing interest in blue finance since IFC published guidelines for blue finance that provide investors with guidance on project eligibility criteria. Funds raised through our Green Bond Program support investments into blue projects that improve the health of marine ecosystems, provide access to clean water, and strengthen climate resilience,” said Tom Ceusters, IFC Director for Treasury Capital Markets and Investments.
“This transaction is a further successful demonstration of funding that gives IFC and its investors a way to engage and raise awareness around the topic of blue finance and highlight IFC projects and initiatives that are creating positive development impact,” said Ben Powell, Head of Sustainability, Fixed Income at SEB.
In 2022, IFC introduced its Guidelines for Blue Finance, which leveraged financial markets to support water-related projects, including ocean and coastal resource management. Since then, IFC has expanded its Green Bond Framework to cover areas such as biodiversity, ocean conservation, and more stringent climate adaptation and mitigation processes.
Proceeds from this bond will fund blue projects, including a green and blue bond issued by Thailand’s fifth-largest commercial bank to finance clean water, fisheries, and aquaculture efforts.
The bond attracted interest from numerous Swedish and international investors, including AP2, AP3, AP7, The Folksam Group, Länsförsäkringar Liv, National Pension Service, SEB AM, Swedbank Robur, and Skandia.
“LF Life is committed to broadening the scope of sustainable investments, and this bond issue represents yet another positive step towards fostering a truly responsible finance sector,” said Alexander Gusterman, Portfolio Manager at Länsförsäkringar Liv.
“Water is one of the key focus areas of AP7’s green investments. To work with core institutions like IFC to highlight actions and create more focus around water is therefore consequently of high importance. Through this investment, where IFC provides a healthy financial proposition combined with a water focus, we feel we can move forward in raising awareness and engage in the essential topic,” said Ulrika Linden, Senior Portfolio Manager at AP7.